-By Benjamin Ike
On August 21, 2020 Chief Timipre Sylva clocked one year on the saddle as Minister of State for Petroleum Resources following his appointment to the office by President Muhammadu Buhari.
Just as President Buhari did in his first term, he retained the role of Minister of Petroleum Resources even though it was obvious the bulk of the work at the oil ministry would be done by Sylva.
Sylva’s appointment was broadly welcomed by the industry and OPEC Secretary General, Mohammad Barkindo, described him as a veteran of the oil industry in Nigeria who had served as adviser to a former Petroleum Minister and would bring his rich experience to bear on his new and heavy responsibilities.
Sylva’s appointment to the petroleum ministry came at a time the oil sector was grappling to survive from crises on account of falling oil prices, compounded by domestic stagnating oil production. Apart from tackling the governance issues that have overwhelmed the sector for decades, the political will to sustain some of the policies initiated under the immediate past minister Ibe Kachikwu, became paramount.
Some of the achievements recorded during the first term of President Buhari which Sylva was expected to consolidate on included; maintaining crude production levels well above 2million barrels per day; boost gas production for power; devising sustainable teamwork between the Oil and Gas Industry and the numerous host communities in the Niger Delta and instituting a regime of transparent contracting/bidding processes in all major projects.
Also included are reduction of cost of crude oil production per barrel; explore opportunities in frontier basins to boost Nigeria’s reserves base and production; sustain petroleum products supply nationwide; and kick-start the rehabilitation of the nation’s four refineries to boost capacity utilization.
On assumption of office, Valuechain set an agenda for the minister listing some of the critical issues that he would be confronted with to also include the reactivation of the passage of Petroleum Industry Bill (PIB), fixing of Nigeria’s comatose refineries and costly fuel subsidies.
The minister after his inauguration and with the guidance of President Buhari and in response to some of the industry challenges, came up with a 9-Point Agenda of reforms that would be pursued within the short and long term.
Among them are the need to eradicate smuggling of petrol across Nigerian borders, complete gas flare commercialisation, LPG (cooking gas) penetration, other gas utilisation projects and increase crude oil production to 3 million barrels per day (bpd).
Others include: Reduce the cost of crude oil extraction by 5 per cent, achieve passage of the PIB and passage of the Deep Offshore and Inland Basin PSC Act, among others.
Other challenges that the Buhari administration sought to overcome in the oil industry was how to work toward increasing domestic refining capacity, create large number of well-paying jobs for youths and finally, how to take 100m Nigerians out of poverty in 10 years, in line with the president’s promise in the opening speech he delivered at the inaugural June 12, Democracy Day celebration.
In just a year since he took over the reins of leadership at the ministry some remarkable successes have been recorded so far.
The minister as the chairman of the NNPC Board has been instrumental to achievements which included: attainment of over 2billion litres of PMS reserve, discovery of oil in Kolmani River-II Well and the re-opening of OML 25 flow station after two years of inactivity as a result of community issues between the host community/Belema Oil and Shell Petroleum Development Company.
Another milestone achieved in this regard was the resolution of the lingering crisis in the Benin Embayment of the OPL310 where Ministerial consent which stalled huge investment opportunities not less than $400million from Lekoil and Optimum Petroleum, has now been resolved amicably by Chief Sylva, giving way to financing and employment opportunities.
Within his one-year stewardship at the petroleum ministry, the NNPC has achieved the signing of a novation agreement with Nigerian Agip Oil Company (NAOC) to formalize the transfer of OMLs 60, 61 and 63 to NNPC’s upstream arm, the Nigerian Petroleum Development Company (NPDC); execution of a funding, technical services agreement and alternative financing deal worth $3.15bn for OML 13 and $876m for OML 65.
Others are the signing of $2.5billion prepayment agreement with Nigerian Liquefied Natural Gas Limited (NLNG) for upstream gas supply for trains 1-6 and attainment of an advanced stage of execution and Final Investment Decision of the NLNG Train 7; the industry has also witnessed the publication of the 2018 audit of the NNPC Group as well improved engagement with key stakeholders, notably, the National Assembly.
The conducive relationship between labour unions in the industry has continued to be maintained by the minister as evidenced in the harmonious working relationship among the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), the National Union of Petroleum and Natural Gas Workers (NUPENG) and the entire industry which has brought stability, regained investors’ confidence and attracting foreign direct investment in the industry and the economy at large.
Also worthy of mention is the fact that barely five months on the saddle as Minister of State, the Deep Offshore and Inland Basin Production Sharing Contract (PSC) Amendment Bill was passed by both Chambers of the National Assembly and assented to by President Buhari. The law will significantly increase Nigeria’s share of earnings for the country.
Sylva’s stewardship has given impetus and fast tracking of the Ajaokuta-Kaduna-Kano (AKK) pipeline project commissioned in June and expected to revolutionized the supply and distribution of the huge gas for both industrial, household (cooking gas) and feed stock for our power sector.
At the international stage Nigeria has continued to be relevant including playing very key roles in negotiation stages, leadership of committees and subcommittees and in crafting of the agreements at both local and international energy groups.
Chief Sylva who immediately after his inauguration took over leadership as the President of the African Petroleum Producers’ Organisation (APPO) had embarked on shuttle diplomacy to fellow African producers to explore joint strategies for collaboration to solidify Africa’s position in the Organization of Petroleum Exporting Countries (OPEC).
Under the minister’s watch, Nigeria has aligned its oil production to the quota restriction set by OPEC. Before now, the country was not obeying the cuts, according to figures published by Reuters and the International Energy Agency.
Remarkably, as Sylva set out to deepen transparency in the NNPC with the launching of “Operation White,” a team of 89 persons drawn from five key agencies, transparency and accountability in the distribution of petroleum products across the country is gradually being achieved.
Following the launch of “Operation White”, the Minister also unveiled the Automated Downstream Operations and Financial Monitoring Centre (DOFMC) to deepen transparency in the oil and gas sector.
Also, Sylva leadership of the sector has witnessed the launch of the marginal oil field bid round, an exercise that had been delayed for decades. Another critical achievement for the minister is imminent roll out of the National Gas Expansion Programme, which seeks to expand the usage of gas to drive cars, and to improve the LPG usage in homes.
For the minister, the recent decision to deregulate the downstream sector of the petroleum industry is major achievement. According to him, this is something the government has always looked for a window for.
Despite all the achievements so far, the refineries remain a sore point, the minister also admits but has said a lot of efforts was going in that direction.
Speaking in a recent interview on the state of the refineries Sylva said: “We would have started with Port Harcourt Refinery, because the funding has been secured, and everything was put in place to start the rehabilitation process in the first quarter of 2020. But, with COVD-19, nothing could go on. So, the project has been delayed. But, it is one of the projects at the front burners of this administration. The plan also includes the rehabilitation of Warri Refinery. Clearly, we understand the need to rehabilitate refineries, and working with the private sector to improve our domestic refining capacity.”