Nigeria: Beware of NNPC's Advice, Petroleum Economist Warns Govt

Photo: Vanguard
(file photo).
13 August 2019

The immediate past president of Nigerian Association for Energy Economics, NAEE, Professor Wumi Iledare, has cautioned the Presidency against allowing the Nigerian National Petroleum Corporation, NNPC, play an advisory role to the government on oil and gas matters.

In an interview with Vanguard in Abuja, Iledare reminded the government that the NNPC Act did not make the corporation a substitute for the Ministry of Petroleum Resources, stating that the NNPC playing an advisory role to the Presidency over the years, had not helped the government or the country. Iledare is currently Professor of the Ghana National Petroleum Corporation's Chair of Petroleum Economics at Institute of Oil and Gas Studies, IOGS, in the Ghana University of Cape Coast.

He was also former President of the International Association for Energy Economics, IAEE. He noted that the NNPC has a significant role to play in the growth and development of Nigeria's petroleum industry and the country in general, noting, however, advising the government was not one of such roles. He said, NNPC still has a big role to play, but the emphasis must not be the agency role of advising the government on oil and gas industry. It has not helped the government of the country, instead, it is a divide and rule tactics that must be avoided by the government. NNPC Act does not make the corporation a substitute for the Ministry of Petroleum."

Iledare, who was responding on the state of the Nigerian petroleum industry, also bemoaned the current lull in the industry, warning that the misfortune of the industry might spell doom for Nigeria's unity.

"The collapse of the oil and gas industry in Nigeria worries me more lately because of the Venezuela experience and because we are heterogeneous, such experience in Nigeria may lead us to the path f Yugoslavia. "God forbids. So for now, oil is the glue that we have, so we must manage it through reforms with emphasis on sustainable energy for national development," he cautioned. He lamented that Nigeria kept missing the opportunity to demonstrate to investors that it was back on track, especially as it failed to pass the Petroleum Industry Governance Bill, despite every effort made to pass the bill. He said, "We started 20 years ago when we told the world we will reform and we, for whatever reasons, backed down in the very last minutes of the 7th Assembly. (NNPC)

That is one. "Second we changed key players in the government side as if we are changing suits in the closet. Over the last 10 years, how many changes have we made with respect to the governance of the industry? "These things matter when you ask someone to bring billions that may take 8-10 years to get first oil and perhaps another 5-8 to breakeven. So the little investments we get is to develop existing assets not seek for new ones, hence the low utilisation rate of the dockyards." Iledare added that "It is also unfortunate that the last bid round was 2007 for the new block. No new discovery implies no new fabrications and the assets development efforts are not commanding the type of job creation a new discovery could bring. "What is the way out? First is the reform, and I am glad to hear the tune Dr Ahmed Lawan, the Senate President is singing it. Reinventing the PIB in the National Assembly is not the way to go. Look at what has been done, get the new committee to speed and get the PIGB signed. Next, the oil and gas block round sale is critical.

"Third, we did it before, incentivise investors without compromising revenue. We cannot close our eyes to the emerging new oil and gas dynamics in the coast of Africa, not just West Africa."

Vanguard

See What Everyone is Watching

More From: Vanguard

Don't Miss

AllAfrica publishes around 600 reports a day from more than 150 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.