Government moving oil industry in radical direction, says petroleum minister

Petroleum Minister Diezani Alison-Madueke

The ongoing review of operational processes through committees and task forces is aimed at redirecting and structuring the industry, Minister of Petroleum Resources, Diezani Alison-Madueke, has said.

The Minister was speaking in Abuja against the background of wide insinuations that the various task forces and special committees recently constituted by her ministry, were mandated to carry out roles that conflict sharply with the statutory functions of some existing agencies of government.

The Special Task Force on the Petroleum Industry Bill (PIB) is expected to work with a technical committee to fast-track the development of the draft PIB for presentation to the National Assembly, while the task force for governance and controls is to review the operational structure of the Nigerian National Petroleum Corporation (NNPC) and other parastatals within the Ministry of Petroleum Resources.

Similarly, the Petroleum Revenue Special Task Force is to help in the recovery of debts owed by various operators in the upstream and downstream sectors of the petroleum industry, while the National Refineries Special Task Force is to review the current state of the refineries and define the roadmap to grow the country’s refining capacity to meet demand.

However, observers have said these task forces are usurping the responsibilities of statutory agencies such as the Nigerian Extractive Industries Transparency Initiative (NEITI), which is charged with the responsibility of auditing all payments and receipts of oil and gas revenues, while the Department of Petroleum Resources (DPR) is mandated to regulate and ensure compliance with operational standards in the industry.

But Mrs. Alison-Madueke said as much as she agrees to some extent the argument, she was convinced of government’s committment to moving the industry in a new direction in line with international standards.

“In as much as we agree, it is our responsibility to handle the commercial operations of the oil and gas sector directly,’” the minister said. “At this point in time, NEITI’s audits, though they may be commendable, are at least a year behind, the most recent being those of 2008 and 2009, when we are in 2012.

“Obviously, we are talking about moving forward in a completely new aggressive, radical way with our industry.  If we look at the refineries, we must get them back to optimal capacity of about 80 to 90 percent utilization, to meet global norms.

“Therefore, we must review our recent audits in terms of profit and loss in the commercial processes of the refineries. It is not good enough to just do the turnaround maintenance every year. Even if at the highest level of efficiency, we must also look at operational controls and processes, while ensuring that the commercial processes are very strongly embedded. The profit and losses index is one of such issues that should meet global standards within acceptable norms and parameters.”

The minister said the two-day retreat for key industry stakeholders are designed to find integrated solution to problems facing the different sectors of the industry, particularly the declining capacity of the refineries.

” We are looking across the entire spectrum of the industry and doing what is considered integrated solution by bringing all other stakeholders within the sector and the ministry of petroleum resources that also participate in refining activities in the industry, such Pipelines and Products Marketing Company (PPMC), National Petroleum Development Company (NPDC), which also share facilities with the refineries.

“We have noticed in the past that each them have hitherto handled their own processes, such as refurbishment and rehabilitation in isolation, which is not good enough. They must be one integrated holistic solution. We must look at it in terms of the short, medium and long term if we are to move forward in the aggressive radical manner we intend to move, to benchmark ourselves with the global best.”


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