That Warning of Former NNPC GMDs on the Oil Industry


I read with keen interest the warning meted out by the former Nigerian National Petroleum Corporation (NNPC) group managing directors (GMDs) on the oil Industry as reported in THISDAY of Sunday 4th September, 2016, when they held a meeting with the current GMD, Dr. Maikanti Baru. Apart from other recommendations, they expressed “the urgent need for government to refocus as well as engage the various host communities as well as establish social and traditional structures to develop an actionable partnership framework towards finding a lasting solution to the present unrest”. I got amused at this advice, because I wondered why they did not think of this when they were in office at their respective times and took the necessary steps to address them.

In the first place, out of the 13 of them that visited Dr. Baru or sent apologies, seven of them are indigenes of the afflicted areas of the Niger Delta Region and they forgot to think of this solution then. Secondly, some of them in that group pride themselves as the authors of the Joint Venture Agreement (JVA) between the federal government and the International Oil Companies (IOCs), which they put up as the operating terms and conditions for the Joint Venture Companies (JVCs) with NNPC (on behalf of the Federal Government of Nigeria) to operate under their supervision. Why did they not include the above recommendations in the JVA and see that they were implemented? They also jointly prepared the operational budgets of the JVCs with the IOCs which they took to the government of the day for approval. Why did they not include provisions for attending to those things, which they are recommending today to the new GMD, in the budgets during their times in office of which the federal government contributes its quota through the cash calls provisions? Let them provide evidence that they did and were removed or not implemented by the JVCs so that we know whom to blame.

As co-preparators of the yearly budgets with the JVCs and supervisors of their implementations, year in year out during their times in office, let’s see whose fault it was that the JVCs did not implement the corporate social responsibilities (CSR) in their respective operational areas as provided for in the budgets, as it is the norm in other countries in keeping the environment of operations clean and providing resettlement housing where necessary. Other amenities such as schools, health clinics, drinking water, light and roads in the sands and muds of the producing communities could have been included in the budgets as the IOCs included five star production boats in the budgets for their comfort and were approved and contributed to by Government through Cash Calls. In this way some of those problems and unrest today in the creeks including naked children roaming around in the slumps without schooling, looking through the fenced opulence of the Operators in disbelieve, would not have occurred.

As engineers and oil technologists in the art of oil exploration and production, I believe that the former GMDs should have been able to supervise and advise the IOCs on their shortcomings in the field and took proper steps to remedy them as they occur, be it oil spillage or effects of gas flaring and seismic works on the environment during the budgeting processes which funding were incidentally shared between the IOCs and the government. There was no evidence that while government paid for those good facilities for the IOCs through the cash call provisions in the yearly budgets it refused to pay for the CSR provisions for the producing communities.

The report continued that “the former GMDs advised that the refineries be rejuvenated using the Original Equipment Manufactures (OEMs)”. Haba! This coming from them today without asking themselves, why did they not do that when the powers were all on their table? I remember trying to cause this to be done by wanting to call in the OEMs, soon after their turn around maintenance (TAM) at the Kaduna Refinery in 1993 and Chief Ernest Shonekan, the then ING Chairman went to commission it and turned it on, the ING chairman didn’t reach Abuja from Kaduna when the refinery blew up. I set up a committee headed by the late Aret Adams to find out why the refineries kept blowing up soon after their TAM. His recommendations were startling and made me want to call in the OEMS to overall the whole system. The former GMDs forgot to remember that during their times they refused to maintain the refineries according to the Operational and Maintenance Manuals of the OEMs which built them and left the warranties, guaranties and the technologies to expire without renewing them, preferring to do the TAM by themselves for whatever reasons, that caused the refineries to be blowing up soon after their so called TAMs.

I was removed from office before I could see the efforts to bring in the OEMs through and they returned to the status quo of carrying out the TAMs themselves with third parties. That practice is what left all the refineries, including the newly built Port Harcourt Refinery, which was built in the first place, as an export refinery, in comatose and unoperational during their times in office. Deriding the incessant waste of money on TAMs that didn’t fix the refineries, the Olusegun Obasanjo administration decided to write them off and embarked upon importing petroleum products by “anybody who has the money” instead of “rejuvenating” the refineries, which combined actions have resulted in what we have today in the sector.

Again the former GMDs continued “the refineries must be restructured to operate as an Incorporated Joint Venture (IJV) similar to the Nigerian Liquefied Natural Gas (NLNG) model with credible partners having requisite technical and financial capabilities”.

I still cannot comprehend why my professional friends and colleagues decided to come out to indict themselves publicly. Some of them were the GMDs when these refineries were set up and actually caused them to be incorporated as limited liability companies under their control as they made the MDs to report to them. Why didn’t they think of IJV then and brought in “credible partners having requisite technical and financial capabilities” as in the successful NLNG model. If they didn’t know, why come out today to advise the present GMD on what they did not know or if they knew, failed to do?

And talking of the successful NLNG model which they praised today, the questions I would like to ask them are: Why did the NLNG project remain moribund for over 35 years under their watch? Why were all the acrimonies in trying to establish it all these years? Why did they not think of the model that has made the NLNG a success story today?

The simple answer to all the questions was that they all wanted to have control as in the refineries set up so that they would award the contracts and manage it, which the Technical Partners with “requisite technical and financial capabilities” kept resisting until I, Chief Don Obot Etiebet painstakingly, defiantly and with the original support of Chief Shonekan and quarrelling with everybody and being abused and accused of everything, re-launched the NLNG project with this IJV model in 1994 amidst fierce protests and opposition right up to Aso Rock whose reverberations are still lingering on till today.

I am sure of multifarious reactions but I am ready to debate whoever on the issues I have raised, as I believe the time is ripe for people to come out and confess their sins or extoll their virtues to save this country. I have gotten into this detail to emphasise the fact that we, Nigerians are very apt at blaming and advising from the sidelines but when we were in office we messed up and refused to take responsibility, disregarding the fact that governance is what you do when you are on that seat and is not for the president or Head of State alone and therefore should be ready to be held personally accountable for any omissions or commissions against the interest of the people.

I think for those of us who had the singular privilege and opportunity to serve this country of ours in any capacity, be it president/ Head of State, governors, legislators, ministers, LGC chairmen to civil servants, etc., we should remember what we did while in office to contribute in one way or the other to where we find ourselves today, and if we erred we ask Nigerians and God for forgiveness while resolving to put hands together to build a new nation of peace and progress. As we know, we have no other country but Nigeria.

Finally, according to Senator Aliyu Sabi Abdullahi from Niger North Senatorial District, as reported in the Vanguard Newspaper of Tuesday, September 6, 2016, on this issue that we should avoid “crying out loud publicly” to advise incumbents and successors in office as we may be asked if we “can be free of blame on how we got here”, making ourselves a nuisance. Secondly the incumbent would naturally refuse to implement your advice no matter how good it is for fear of being branded a ‘stooge’. So let’s leave the incumbents alone in public and if we forgot something while in office get it across very privately and respectfully.

• Chief Etiebet was a former Minister of Petroleum & Mineral Resources