The professionals spoke against the backdrop
of the pronouncement by the Group Managing Director of NNPC, Dr. Emmanuel Ibe Kachikwu, calling for
the removal of petroleum subsidy as a policy issue that would only distract the
NNPC from the current reforms being embarked upon by the new helmsman.
One of the oil and gas professional, Prof. Wunmi Iledare, who is a Professor
of Energy Economics, said: “I support the removal of
petroleum subsidy because it is a monster that is not sustainable, creates
black market, inefficiency and does not reach the people it is supposed to
reach, but I do not think that the NNPC should be the one to lead that policy
formulation for the subsidy removal and other policies in the oil and gas
industry. We should seize this opportunity of industry reform and separate
policy formulation, regulation and commercial participation in our oil and gas
sector. The ministry of petroleum should be reformed and empowered to perform
its function as a policy formulator for the industry.”
One other oil and gas professional who did
not want his name mentioned told Tectono Business Review that “the irony of two incompatible roles for NNPC has distorted
it as a national oil company, from the moment it emerged from a merger of the
National Oil Corporation and Ministry of Mines and Power, in 1977. You cannot
be a referee and a player in the same game and succeed in both. None of the
successful national oil companies (NOCs) does that. The ones that have emerged
profitable, such as Petronas of Malaysia, did so when they shed their quasi
regulator pretentions and concentrated on operating a commercial model”.
Industry operators have said that rather than
dissipate its energy on policy making, they want the NNPC to focus on ways of
moving the state oil company towards commercial orientation, as well as dealing
with all the issues arising from the collapsing of the eight former
directorates into four.
Yes, in a recent editorial commentary, the Centre for Petroleum Information (CPI)
said “The collapse of four directorates into two,
eliminates two group executive directors (GEDs) but creates problems which
would need to be thought-through. One such problem is capacity and the other,
bureaucracy. The initial deficiency, which is out of tune with global
best-practice, of most directorates being cost centres persists. That will
require more deep-rooted restructuring.
“All the noise around subsidy and
swaps disappears if ‘refining and marketing’ were a directorate/profit centre,
rather than the current massive cash-guzzling ‘refining and technology’
directorate. Crude oil marketing and NAPIMS should be a profit centre to ensure
true accountability and transparency. NNPC Capital should be revamped to autonomously fund
the corporation’s viable projects without recourse to the Federation.”
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