PETROLEUM MINISTRY: Tasks Before Sylva, Others

-By Fred Ojeigbe

Following the inauguration of the ministers by President Muhammadu Buhari early in August, the president on August 21 swore in the ministers and assigned portfolios to them.

Just as he did in his first term, President Buhari also named himself as the Minister of Petroleum Resources and appointed Mr. Timipre Sylva who experts said as Minister of State would do the bulk of the work at the oil ministry.

The appointment of Mr. Sylva comes less than three months since the election of the leadership of the 9th National Assembly headed by Sen. Ahmad Lawan (Yobe North) and Sen. Ovie Omo-Agege (Delta Central) as Senate President and Deputy Senate President respectively.

Following the composition of standing committees of the senate and the House before plenary was adjourned to September 24, the new minister of state will be assuming office at a time new sets of lawmakers will be taking over relevant committees in the petroleum industry. Sen. James Manager was announced as chairman of Senate committee on gas with Sen. Biobarakuma Degi-Eremienyo as vice. For the Upstream, Sen. Albert Bassey Akpan was named as chairman with Sen. Ifeanyi Ubah as vice. Downstream Petroleum committee has Sen. Sabo Mohammed Nakudu and Sen. Philip Aduda as vice.

Sylva, according to OPEC Secretary General Mohammad Barkindo, is a veteran of the oil industry in Nigeria where he served as adviser to former Petroleum Minister, and he will bring his rich experience to bear on his new and heavy responsibilities.

Despite being the minister of state, much of the work at the oil ministry rests on Mr. Timipre Sylva, who as the Minister of State will be confronted with how to reactivate the Petroleum Industry Bill (PIB), fix Nigeria’s comatose refineries and address costly fuel subsidies, among others.

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Sylva comes into the ministry at a time the oil sector is grappling to survive from crises on account of falling oil prices, compounded by domestic stagnating oil production. It is an uphill task before him. Apart from tackling the governance issues that have overwhelmed the petroleum sector for decades, it is the political will to sustain some of the lofty policies initiated under the previous minister Ibe Kachikwu, experts say is paramount.

With the assistance of his predecessor Dr. Kachikwu as minister of state some of the achievements recorded under President Buhar’s watch include the fact that the administration was able to maintain production levels well above 2million barrels per day; ensured a boost in gas production to the extent that today, NNPC is the largest supplier of gas to power; and saving enormous financial resources through Direct Sale Direct Purchase (DSDP) scheme adopted for products import.

Others include: ridding government of huge financial commitments on cash-call by developing workable alternative funding arrangements; devising sustainable teamwork between the Oil and Gas Industry and the numerous host communities in the Niger Delta to curb security challenges that had dipped crude oil production some years back; and instituting a regime of transparent contracting/bidding processes in all major projects.

The country also witnessed reduced cost of crude oil production per barrel from $27 to $22; explored opportunities in frontier basins to boost Nigeria’s reserves base and production; sustained petroleum products supply nationwide; and kick-started the rehabilitation of the nation’s four refineries to boost capacity utilization.

Interestingly, with the swearing-in of the new minister of state, and the inauguration of National Assembly new committee chairmen on petroleum and gas, coupled with the appointment of both new Group Managing Director for NNPC, and Alternate chairman of the NNPC board, the following challenges lie ahead for the minister in particular and the leadership in general.

Petroleum Industry Bill (PIB)
No doubt one of the toughest task before the new minister as well as the legislators is how to address the non-passage of the Petroleum Industry Bill (PIB). Nigeria has since, the return to democratic rule in 1999, been on a perpetual voyage with the Petroleum Industry Bill (PIB). The journey began 19 years came very close to materialising in 2015 with the 8th Senate which unbundled the PIB into different parts.

The first part termed the Petroleum Industry Governance Bill (PIGB) scaled first reading in the Senate in April 2016. However, on June 13, the Senate suspended debate on the PIGB but later passed it just as its counterpart in the House of Representatives later also passed it. The PIGB was however denied assent by President Buhari. Time is already running out on the PIB as nothing has been heard about the remaining aspects or even the signing into law of the PIGB.

According to experts in the industry, the country loses investments worth $15bn yearly due to the delay in the passage of the PIB. For years, the federal government has not been able to significantly boost crude oil production even as it targets 3 million barrels per day by 2020.

Mr. Sylva’s first major task in the ministry, therefore, should be how to grind the PIB to be passed so as to sustain a vibrant Nigerian oil and gas industry.

Niger Delta Peace
The Niger delta region which contributes more than 80% of Nigeria’s oil resources continued to witness years of economic marginalization, environmental degradation by the government and oil companies leading to emergence of militancy in the region.

Beginning from 2016 under the first term of President Buhari the oil-rich Niger Delta was rocked by intermittent attacks by several militant groups whose actions cut Nigeria’s output to the lowest in almost 30 years. Nigeria lost more than N1.1trillion crude oil revenue to the attacks that lasted for more than one year. Tensions have since been calmed by the government through negotiations and promise of development of the region while oil production has attained its normal levels. A lot of promises were made by the administration to the people of the region. The new minister must work hard to sustain the gains and fulfil government’s part of the bargain.

Curtail Fuel Importation, Subsidy
The abysmal state of the country’s refineries was a major concern for President Buhari when he took office.

The consequence of the refineries’ poor performance meant that the country continued to import most of its refined petroleum products with the attendant effect on prices at the pumps and the huge under-recovery or subsidy recorded by the NNPC on petrol.

The Buhari government has promised that apart from fixing and getting the refineries to work up to 90 percent of their installed capacity, Nigeria would lower and eventually exit fuel importation by 2020 and by extension quit the costly subsidy regime.

Despite several interventions to revamp the existing plants and incentivize modular and Greenfield (brand new) refineries, the three refineries in Port Harcourt, Warri and Kaduna are still not in good shape as promised.

In fact, the volume of fuel importation under the current administration has taken an alarming dimension. The amount spent by the Federal Government on the importation of petrol soared by nearly 50 per cent to N2.95 trillion, NBS data showed.

The country spent N1.97tr on PMS imports in 2017, N1.63tr in 2016 and N1.14tr in 2015. Petrol imports accounted for 22.4 percent of the nation’s total imports in 2018, up from 20.6 percent in 2017, 18.4 percent in 2016 and 17 percent in 2015.

According to the NNPC, Nigeria is the only member country in the OPEC that imports petrol and is currently the largest importer of PMS in the world.

How and what to do in order to reverse these troubling statistics should be a major concern for the new minister, NNPC and the lawmakers in general.

The refineries managed by the Nigerian National Petroleum Corporation (NNPC) have remained one of Nigeria’s biggest problems that have defied every form of solution.

However, there are on-going efforts by the current administration to obtain third party funding to fix the plants.

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The new minister can help the president take a stand over whether to sell or retain the refineries.

Analysts say it may not be economically expedient to continue such endless maintenance at huge costs with the plants, adding little value at the end. Hence, privatizing the refineries or getting the private sector run some aspects of the refineries could be a solution.

Sustain Oil Search
The turn of the decade has seen renewed interest in oil exploration by government through NNPC in a bid to increase the country’s oil and gas reserves, add value to the hydrocarbon potentials of the inland basin, provide investment opportunities, boost the economy as well as create millions of new jobs.

The President Muhammadu Buhari led administration has been the most dogged about it so far. In 2016, seismic data acquisition activities at Chad Basin and Benue Trough, resumed and progressed before it was interrupted at the Chad Basin by insurgency in the northeast. Drilling activity which commenced at the Gongola Basin in Bauchi has progressed tremendously.

The quality of leadership that will be provided to drive the process will determine the continuity or otherwise of the exploratory activities at these locations.

…Silva Pledges to Reposition Petroleum Sector
Nevertheless, the newly appointed Minister of State for Petroleum Resources, Chief Timipre Sylva, has assumed duties with a pledge to reposition and chart a way forward for the Nigerian petroleum sector.

A press release August 21 by the NNPC Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, said Chief Sylva pledged to work with the experts at the Nigerian National Petroleum Corporation (NNPC) and the other departments and agencies under the Ministry to move the sector forward.

In a welcome ceremony for Chief Sylva at the NNPC Towers in Abuja, the new Minister of State for Petroleum Resources who was accompanied by his wife, Alanyingi Sylva, stated that with the calibre of workforce in the Ministry, he was sure that the nation’s oil and gas sector would move to the next level.

Chief Sylva, who is a former Governor of Bayelsa State brings on the job several years of cognate experience in the petroleum sector.

The new Minister of State contributed profoundly to the institution of the Amnesty programme in the Niger Delta region which, over time, has led to restoration of peace in the oil producing areas of Nigeria.

Earlier, the Permanent Secretary of the Ministry of Petroleum Resources, Dr. Folashade Yemi-Esan, reassured Chief Sylva of the readiness of all members of staff in the Ministry to support him to succeed in the onerous task of transforming the Nigerian oil and gas sector for the good of all stakeholders.

On hand to welcome the Minister at the brief ceremony were the Group Managing Director of NNPC, Mallam Mele Kyari; Executive Secretary of the Petroleum Training Development Fund (PTDF), Dr. Bello Aliyu Gusau; and the Executive Secretary of the Petroleum Equalisation Fund (PEF), Alhaji Ahmed Bobboi, amongst others.

THE MAN Timipre Sylva
Timipre Sylva was born on July 7th, 1964 in Okpoma, Brass Local Government Area of Bayelsa State, Nigeria. Sylvia started his primary education at St. Paul’s Anglican Primary School, Okpoma and finished at Ajeromi Central School I, Lagos in 1976. His secondary education took him to Government Secondary School, Brass from 1976 – 1981. He secured admission into the University of Port Harcourt, where he studied English Language and Linguistics. For the mandatory National Youth Service Corps Programme, he served with Shell Petroleum Development Company at Warri, Delta State.

Sylvia started his career with the National Minority Business Council, Port Harcourt, where as the Executive Secretary, he diligently saw to the creation of employment opportunities for his people. It was in recognition of his altruism and dedication to duty that his people elected him, to represent them at the Rivers State House of Assembly in 1991- 1992 on the platform of the then National Republican Convention, NRC. This was however, cut short by the military intervention of the Late General Sani Abacha. Thereafter, he went into private business. When the ban on politics was lifted, he became one of the founding members of the United Nigeria Congress Party, UNCP, where he served as the State Financial Secretary.

Following the extinction of the then five political parties. He together with his people embraced the People’s Democratic Party, PDP. He was political adviser to the former Governor, D.S.P. Alamieyeseigha up till 2002, when he resigned. He was also member of the Governing Council, Federal University of Agriculture, Umudike Abia State till 2004. He has been the Special Assistant to the Minister of State, Petroleum Resources.

As a candidate of the People’s Democratic Party Sylva won the Bayelsan gubernatorial election on May 29th, 2007 and succeeded Goodluck Jonathan who went on to the position of Vice President. On January 27th, 2012, his tenure was terminated by the Supreme Court with an acting governor appointed to oversee the state until the election of February 2012. He attempted to return in January 2016 under the All Progressive Congress (APC), but lost to the incumbent Governor, Serike Dickson, of the Peoples Democratic Party (PDP).