IOCs, Others Responsible for Failure of Oil Sector Reforms, Says Ex-Presidential Aide


Ndubuisi Francis in Abuja

A former Adviser on Petroleum to one-time Head of State, Gen. Abdulsalami Abubakar (rtd), Dr. Mohammed Ibrahim, has blamed the failure of petroleum sector reforms to the unwillingness of international oil companies (IOCs) operating in the country to break away from the status quo due to vested interest.

He also blamed other stakeholders, including government functionaries and representatives for the failure of the sector reforms.

Ibrahim, who delivered a keynote address in Abuja yesterday at a National Stakeholders’ Reform Dialogue on Governance Reforms, organised by the Partnerships to Engage, Reform and Learn (PERL), a governance programme funded by UK’s Department for International Development (DFID), said from April 2000 till date, Nigeria is yet to consummate the petroleum sector reforms, noting that the stalemate may not be broken in the foreseeable future due to entrenched interests.

In his address titled: ‘Making Reforms Work For Good Governance: The Role of Stakeholders,’ he stated that the stakeholders, particularly the IOCs understood quite well the consequences of allowing the petroleum sector reforms to be carried through, and therefore had over the years subtly manipulated the process in order to continue to call the shots.

According to him, the reforms, if allowed to pull through, would put the operations of the sector more actively in the hands of indigenous players, and to a large extent strip the IOCs of their domineering status.
He argued that this was a situation the IOCs would least allow to occur, stressing that local stakeholders had also willy-nilly contributed to the stalemate

Mohammed stated that the international oil companies in the joint venture (JV), including Shell, control over 90 per cent of the operations of the oil sector, adding that should the reforms work, it would not be a tea party for the IOCs.

Mohammed, who is also a one-time Chairman of the Eleme Petrochemical Company, said it was a misnomer to describe Nigeria as an oil-producing country, noting that it is at best an oil exporter.

The mere fact that the IOCs are the ones who carry out oil production under the JV partnership with the Nigerian National Petroleum Corporation (NNPC), he argued, consigns the country as an oil exporter and oil producer.

He stressed that until the means of production, particularly technology and personnel are in largely in the hands of indigenous players, Nigeria cannot claim to be an oil producer.

He regretted that the resolve of IOCs to allow the status quo remain, and the lack of commitment by stakeholders from the public sector had torpedoed the petroleum sector reforms over the years.

According to him, Nigeria carried out a plethora of reforms over the years, noting that some have been quite deep and significant, citing the telecommunications sector as an example

Others, he lamented, have been deliberately and politically made irrelevant to “quiten some irritants” and “a few frustrated by stakeholders,” alluding to the petroleum sector.

Mohammed noted that it was the late president Umaru Musa Yar’Adua who showed resolve to see through the petroleum sector reforms, but for his demise.

He recommended that the citizens, as primary stakeholders in good governance, must ensure that the Schedule 2 of the 1999 Constitution, which is the fundamental objective and directive principle of state policy has appropriate provisions for good governance is justiciable.

“For reforms to work, the role of stakeholders would be to ensure that good governance is justifiable in Nigeria,” he said.

In her opening remarks at the event, the Deputy National Programme Manager, PERL, Margarita Aswani, said experience had shown that citizens play a key role in overcoming service delivery blockages in priority areas, when there is constructive engagement in planning, implementing and tracking budgets and service delivery, and feeding back into government decision-making processes.

In her words, “citizens’ participation in governance processes not only improves transparency, but can also help to ensure that political decisions about spending reflect the needs of the people.”

For reforms to happen, she observed that the governance space requires the media to also play its role in setting the agenda, and creating spaces for citizens and government (politicians and civil servants alike) to constructively engage in the decision-making process.