In this exclusive interview with e360, Tengi George-Ikoli, Program Coordinator, Nigeria Natural Resource Charter (NNRC) calls for the quick passage of the oil sector reform laws to enable Nigeria remain competitive in the global market. Excerpts
Why have oil sector reforms been difficult to achieve in Nigeria?
Nigerians tend to focus on the domestic issues without considering the global context. There are a lot of components that we as Nigerians must also consider. For instance, globally, companies and countries are investing in renewable energy sources so the demand for Nigeria’s fossil fuels will naturally depreciate. Also, while Nigeria spent 18 years considering petroleum sector reforms, other neighbouring African countries have discovered oil in commercial quantities and adding value to their petroleum products while also embracing policies that promote benefits of their citizens. With more competitors and a shift away from fossil fuels, revenues and investments are consistently being lost.
What should Nigeria focus on as the world begins to look away from fossil fuels?
We can diversify into gas. Government policies such as the Gas Master Plan and approved National Gas Policy indicate that the government understands this potential. However, there are infrastructure deficits in terms of the network for distribution, storage amongst others. Gas infrastructure and expertise should be strengthened to improve Nigeria’s competitive advantage globally. The success with the NLNG proves that this is a viable option for Nigeria.
Why are the refineries not working optimally?
Insufficient investments and political will are committed to having them work. The Dangote refinery; which is a private commercial venture, is not an appropriate alternative to Nigeria’s refineries. It should not be used as an indication of prospects for Nigeria and its ability to add value to its oil resources. The refineries should either be privatized or policies adopted towards making them operate optimally.
Should the President be holding the petroleum minister portfolio?
The President should not maintain both his office as a President and the office of the Minister for Petroleum Resources. There is a conflict in that role and it introduces unnecessary bureaucratic bottlenecks that should not exist in the most significant driver of the Nigerian economy. That separation has been introduced to the Petroleum Industry Governance Bill (PIGB) which is why the President should pass the bill into law.
What is the overall objective of the NNRC?
The NNRC implements the principles of the Natural Resource Charter (NRC) which was created by industry experts internationally. Looking at the Extractive Industries Transparency Initiative (EITI) and how they operate, the Natural Resource Charter sought to identify the governance decision chain, consider how that works and define ways to address those gaps. This led to the creation of 12 precepts that assesses all decisions made by a country from discovery of the resources to ensuring that it is converted into long term sustainable development. That’s what informed the NRC. In 2012 it was adopted by Nigeria and the NNRC was born to implement the NRC. The NNRC has tried to make sure that right decisions are made in terms of governance framework, and adopted policies are implemented to help the petroleum sector work in an optimum way.
How does the NNRC engage with stakeholders/industry?
The NNRC assesses the governance framework within the petroleum sector in Nigeria. Then, we determine the gaps and the approach required to address those gaps. In some cases, increased awareness on issues are required. In others, we engage with the government to provide solutions or serve as a bridge between the government and citizens or the industry.
What major gaps have been found by NNRC in Nigeria’s oil and gas sector so far?
We found that against two of our indices, Nigeria’s petroleum sector has consistently performed poorly. Against Precept 5 and Precept 6 which assesses the government’s ability to get a good deal for the local communities and economic and social benefits for Nigeria’s, Nigeria performed poorly. Over the past 5 years since these assessments, only minimal changes have been seen even though a lot of interventions have been focused on this. The passage and implementation of the Petroleum Industry Governance Bill and other component parts of the other bills will provide some marked improvements in those areas if substantially achieved by the end of the 2019 NNRC Petroleum Assessment.
What are some of NNRC’s interventions to mitigate observed gaps?
The components of the NNRC petroleum sector assessments are quite varied. Precept five which focused on local impacts, presents an opportunity to address the environmental degradation in the Niger Delta. We have determined that if there’s some additional work done; there can be meaningful improvement on the livelihoods of the people which can open a path to sustainable development as well. We have worked with stakeholders from Ogoniland where the UNEP report was initially conceptualized to resolve the environmental issues. We have also worked with other communities as well to find out what the collective challenges are for them. Feeding into that, we’ve conducted some advocacy work on the Petroleum Host and Impacted Community Development Bill (one of the components of the Petroleum Industry Bill) working with some partners located in the Niger Delta to amplify the voices of the people. We had engagement with some host communities to see what their grievances and issues were with the bills and those were proposed to the National Assembly. Connected to that also, on precept six which is about the NNPC specifically, we have also worked around the PIGB. We participated in retreats that the house of reps had on PIGB to emphasize the importance of passing the bills into law.