President Muhammadu Buhari at an oil rig site, recently
For President Muhammad Buhari, his long time plan to reform Nigeria’s oil and gas sector will remain indelible and one that has brought full fulfilment to him in his six-year leadership of the country.
PMB’s long-awaited plan to reform the sector came to final fruition in Abuja where he disclosed that his reforms have saved the oil and gas sector from total collapse due to corruption activities.
The President who presented four books written by a former Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, gave insights into how the reforms initiated by his administration in 2015 saved the oil and gas industry from total collapse. At the event held virtually, President Buhari paid glowing tributes to Kachikwu for “laying the groundwork which culminated in the ongoing reforms of the NNPC”.
In the words of the President, the sector which accounts for a huge source of foreign exchange for Nigeria, was in dire straits when he took over in 2015.
The kind of robust plan PMB had for the country which includes the need for reforms in the oil and gas sectors, among others, was one aimed at attracting more investments and the needed revenue to support the nation’s economic growth.
It was therefore not suprising that shortly after coming into office in 2015, he made it known to Nigerians without any ambiguity that as a new administration, the country needed to act fast to address the declining prospects of the industry and aggressively drive economic recovery and improve the country’s fortunes.
The President, encouraged by the current transparency and accountability drive he instituted and put in place in the NNPC, is a good indication of the success of his administration’s effort in stemming corruption and other sharp practices, commonly referred to as ‘cutting corners’ in the petroleum industry..
In addition to negotiating the value of the $6.3bn debt downward and clearing payment within three years, the challenge of Cash Call accumulated arrears had been finally resolved by the PMB administration. This is the first time in more than 28 years.
PMB has indeed turned the oil and gas sector around. NNPC’s unbundling into four autonomous business units had further strengthened its capacity. PMB administration had also stemmed possible corruption by facilitating crude oil pump measurements at export loading points.
Reports have indicated that the reform has so far saved the country from the reported stealing of an average of 650 000 barrels a day recorded especially during President Jonathan’s years through 2015.
It is very encouraging and heart-warming hearing the President say that the imminent passage of the Petroleum Industry Bill (PIB) will mark a milestone in the country’s reform of the oil and gas sector.
Efforts by PMB must be acknowledged as laying a solid legal framework for the industry, resulting in a revamped PIB aimed at further developing the sector and attracting the much-needed investments in the country
According to PMB, the government is also committed to monetising the country’s huge gas resources through the national gas expansion programme to support national economic diversification and job creation.
It is not in doubt that before the coming of the Buhari administration in 2015, it was a generally held belief that the NNPC was known as the cesspits of corruption in the country, with official backing, remaining opaque and unaccountable in its operations. PMB had changed this ugly narrative when in 2017 NNPC started issuing monthly records of operations and financial standings and annual audited accounts.
In its commitment to standing by its words of accountability and transparency in the oil and gas sector, PMB’s administration voluntarily joined the league of partners to the global extractive industry transparency initiative, NEITI. NEITI is a partnership that compels openness in the operations of the NNPC, including open and transparent processes on bids and contracts
The passage of the PIB by Nigeria’s National Assembly is a huge milestone in the horizon. President Buhari has indeed had sleepless nights in ensuring the take-off of a seamless reform in the country’s oil and gas industry. It is an achievement over what previous governments have been trying to do since.
Prior to the coming of PMB as the country’s President, bad practices have prevented Nigeria’s oil industry from operating competitively. NNPC and its subsidiaries have remained weak and unaccountable.
On the revenue assessment and collection side, there are issues of petroleum profit tax (PPT), under assessment; on remittance by NNPC; absence of a commercial regime for gas profit sharing and framework for commercial gas exploitation; opacity in the oil block licensing after the 2005 and 2007 open bid exercise and lack of effective control in the fuel subsidy regime, among others.
For Nigeria and Nigerians, it is indeed a win-win situation as a result of a comprehensive, real, workable and patriotic reform for the oil and gas sector put in place by the PMB administration in the country which started as far back as 2015.
But for the oil and gas reforms put in place by PMB, the sector would have by now collapsed.