In the construction of any business strategy, Kenichi Ohmae, a world-acclaimed management consultant and author of The Mind of a strategist, among other things, noted that three main players must be taken into account; the corporation itself, the customers and the competition-each of this ‘strategic 3Cs which form the strategic triangle is a living entity with its own interests and objectives; but must be taken care of by any organization desirous of survival.
Likewise, if President Muhammadu Buhari and Timipre Sylva, Ministers of Petroleum and Minister of state (Petroleum), respectively, are desirous of developing policies, programmes and projects in the ministry, departments and agencies that will engineer prosperity in the oil and gas sectors, then, they should be ready to locate the strategic triangles that hold the key to success in their new positions.
To understand in a little more details, like in every problem-solving effort, which requires formulation of questions around the challenges in a way that will facilitate the discovery of solutions, the purpose of this piece like that of the generality of Nigerians is to, among other things, discover factors which impede achievements of goals and fuel failures within the ministry; consolidate powerlessness and perpetuate poverty among the stakeholders (host communities); and establish if existing knowledge within the ministry, (its technological provisions and manpower) sufficiently support the goals while suggesting ways Mr President and his team could change the narrative.
Normally, looking at both the operational templates of the Ministry and how the Up, Mid and the downstream players of the petroleum industry has become reputed for non-compliance to set rules, it will not be a wrong assertion to conclude that the critical issues confronting the industry can be divided into the following; the existence of multiple but obsolete regulatory framework which characterises the oil and gas exploration and production in Nigeria; Federal Government failure to get the nations’ refineries back to full refining capacity; the Petroleum Ministry’s inability to get committed to making International Oil Companies(IOC’s) adhere strictly to the international best practices as it relates to their operational environment; And finally, non-existence of clear responsibility/work details and action plans for agencies and parastatals functioning under the ministry.
The above failures have as a direct consequence, cast a long dark shadow on both the ministry and the sector. To explain these points beginning with the first challenge, it worth commenting on that the business of crude oil exploration and issues of oil production in the country is regulated by multiple but very weak laws which not only complicate enforcement but curiously too old-fashioned for the changing demands of time. This creates loopholes for operators, especially the International Oil Companies (IOC) to exploit both the government and host communities.
Some of these laws/Acts that have been in operation since the 1960s but currently not achieving their purpose include the Petroleum Act of 1969, Harmful Waste(Special Criminal Positions etc), Act 1988, Mineral Oil Safety Regulation 1963, Petroleum(Drilling and Production) Regulation 1969 (Subsidiary Legislation to The Petroleum Act), The off-shore Oil Revenue (Registration of Grants)Act 1971, Oil in Navigable Act 1968, Petroleum Production and Distribution(Anti Sabotage) Act 1975, Associated Gas Re-injection Act 1979, Associated Gas Re-injection(continued Flaring of Gas) Regulation, Associated Gas Re-injection(Amendment) Decree 1985, Oil Pipeline Act Chapter 1990, and Gas Flare prohibition and punishment) Act 2016, etc.
The above defect is by no means unique to the Harmful Waste (Special Criminal Positions etc), Act 1988 as similar oversights or omissions cuts across all others listed above. But most importantly, why changing these laws is important is that other Ministries in the country may be facing challenges, but that of the Petroleum Ministry is a crisis.
As I leave Mr President and Timipre to ponder on this fact, I must quickly add that next to not having effective and efficient laws operational is the need to make the operational environment of the industry players peaceful by recognizing the region as a special area for purposes of development. This demand cannot be described as unfounded as it is historically based, logical and factually supported.
As a background, it is in the news that even though the Colonial government long before independence, turned down the demand for a Calabar/Ogoja/Rivers (COR) region/state, the overlords, however, identified the Niger Delta as a troubled spot, and recommended to the then federal government that the region be regarded as a special area for purposes of development.
Without any shadow of the doubt, I hold an opinion that the Federal Government’s inability to treat the region as such set the stage for and nourished the restiveness in both the region and the sector. And except Mr President takes action in this direction via adherence to the above age-long advise, and intensification of projects such as the ongoing National Gas Flare Commercialisation Programme (NGFCP), -a programme which in the words of the immediate past Minister of state (Petroleum), Dr Ibeh Kachikwu has the prospect to create employment; control pollution of the environment by turning the flared gas into productive use while adding money to the federal government coffers.
Admittedly, there will not be a possibility of engineering improvement in every side at the same time particularly in a stalemated environment like Nigeria’s oil and gas sector. However, while effort is being made to rework the sectors’ legal framework and address the challenges confronting the host region, there is a simple remedy available; the need to get the nation’s refineries working both managerally and structurally. Let’s make no mistake about this until it is clear in which direction our refineries are headed for; there will be no prospect of improvement in the sector.
To win, Buhari and Sylva must borrow a ‘soul in order to raise a body’. They must seek solutions from the countries that are presently doing well in these areas we are facing challenges. As an incentive, it will not be out of place if they seek answers to why and how Lee Kuan Yew, the father of the modern-day Singapore, was able to build and efficiently manage a refinery even when it was obvious that the country had no drop of crude oil at that material time? It will also be rewarding in socioeconomic terms if Mr President and his team study what propelled Britain without a drop of crude oil to build one of the best petroleum training institutes in the world?
Utomi, a Lagos-based journalist, writes via [email protected]