Ex-NEITI Board Member Faults FG’s Rejection of Seplat, ExxonMobil Deal
*Wonders why oil losses have not been subjected to independent judiciary inquiry
*Over 60 years after, operators back to manual evacuation of crude, Aiteo, others lament
A former board member of the Nigerian Extractive Industries Transparency Initiative (NEITI) and Managing Partner at ENR Advisory, Mr. Gbite Adeniji, has faulted the denial of ministerial consent to Seplat Energy’s bid to acquire Mobil Producing Nigeria Unlimited’s oil assets.
He said the ministerial consent denial in the deal was telling, adding that the message implied that real players and investors were never wanted nor desired in Nigeria.
Adeniji, also wondered why the federal government had not been able to subject the massive oil losses and attendant negative impact on the nation’s economy to an independent judicial inquiry to ascertain the cause and address the menace.
This was just as the Group Managing Director of Aiteo Eastern Exploration and Production Company (AEEPCO) Limited, Mr. Victor Okonkwo, lamented the pains and difficulties faced by the company as it now struggles to manually evacuate its crude to export terminal due to the shutdown of the Trunklines.
Both Adeniji and Okoronkwo spoke yesterday in Lagos, at the public presentation of a book written by a former Managing Director of the Nigeria Liquefied Natural Gas (NLNG) Limited, Dr. Godswill Ihetu.
The title of the book, which was the writer’s autobiography and memoir, was: “From Oloibiri to Bonny.”
Seplat Energy had in February this year, announced its acquisition of oil and gas assets belonging to MPNU in a deal worth about $1.2 billion.
But the deal was subject to Ministerial Consent and other required regulatory approvals. However, few weeks after, it was reported that the Nigerian National Petroleum Company (NNPC) Limited had opted to exercise its Right of First Refusal (RFR) on the sale of the assets, which then put a hold on the transaction.
On Wednesday, it emerged that the federal government in separate letters to Seplat and ExxonMobil declined its consent to the proposed acquisition of the MPNU assets by Seplat, citing overriding national interest as one of the reasons for rejecting the deal.
Commenting on the matter, Adeniji, who served as the Senior Technical Adviser (Upstream Gas Policy and Regulation) under the immediate-past Minister of State for Petroleum, Dr. Ibe Kachukwu, said the refusal to grant Seplat the goal ahead with the asset purchase deal with ExxonMobil would send wrong signals to foreign investors.
“And it was interesting on today’s headline, about the denial of ministerial consent to the sale of Exxon’s interest in MPNU to Seplat, and that’s telling.
“The message seems to be that real players are never wanted nor desired in Nigeria. We need to be worried”, he stated.
The former ministerial aide also decried the inability of Nigeria to take advantage of the current super cycle in oil prices, which has created a bonanza for petroleum rich nations due to Nigeria’s under capacity production largely caused by massive oil theft.
Adeniji stated that given the strategic importance of petroleum revenues to the nation, it was unfortunate that Nigeria was at the moment unable to take advantage of the oil super cycle due to its inability to produce beyond half of its production capacity.
He said during the designing of the nation’s fiscal policy and petroleum legislation, the belief was that oil price would rise above $100 per barrel and that Nigeria would benefit immensely from such price rally, arguing that that has not been the case at the moment.
He said, “The idea was that we would have windfall revenues to accrue to the treasury. The day has come but we are not able to produce to our capacity and that’s very unfortunate.
“So, if we were to stop and take an objective view of this state of affairs, one of my questions is, why has such a monumentally significant event not been subjected to an independent judicial enquiry to allow the country and the administration to fully understand the remote and the immediate cause of the loss of production of our economic oxygen.
“More also, given its wider applications for national and political security. It’s a big issue, this is a big deal. You cannot lose half of your oil production and just move on. You are going to stop, think and understand why in detail, because it suggests that there is a systemic issue and you are going to understand those issues and try to address them.”
According to him, in spite of the promise in the Petroleum Industry Act for accountable sector governance, a full enquiry on this worrying state of affairs appears to be off the table.
Maintaining that it was not surprising that the country was not able to attract high quality investors into the oil sector, Adeniji said, “when you just move on when these big things are happening, people must ask: what’s going on with you guys?”
He said having wasted the opportunities in oil exploitation in the last 60 years, gas has now presented the country with another opportunity as the world is now witnessing energy transition that has gas as one of the emerging alternatives to fossil fuel.
He explained that energy independence and security from Russia was now top of the European security agenda.
Adeniji explained further that gas demand in Europe and Nigeria’s strategic location in the Atlantic basin presents the country with another opportunity to redeem itself from the jaws of self-inflicted economic and sector mismanagement.
In his intervention, the Aiteo GMD, Okonkwo, lamented the pains and difficulties faced by the company as it now struggles to manually evacuate its crude to export terminal in Bonny due to the shutdown of the Trunklines, noting that that was one of the biggest challenge facing them now.
“Today, we have the fortune of being the operators of the Oloibiri field and again, we have the misfortune of having to transport our crude all the way to Bonny, which we all know is not working right now.
“So that happens to be the biggest challenge or one of the biggest challenges that the industry faces today because all Trunklines to Bonny are shut down. So, where do we go from there? It then comes to the issue of character that my friend, Gbite, spoke about.”
Lending his voice on the challenge of the operators and the entire industry, Chairman of the occasion and Chairman of Dubri Oil Company Limited, Dr. Imo Itsueli, said it was sad that operators have to resort to manually evacuate their products to export terminals in this era.
Itsueli said, “It’s a sad story that after Shell was transporting all they produced almost manually, literally, 64 years later, Aiteo is back to doing exactly what Shell was doing in 1958.
“So, after all said and done, after this supposed progress in the country, that’s the point Mr. Gbite Adeniji made earlier on. We are back to where we started from. Really, it’s not just in the oil evacuation process, it’s virtually in all aspects of the industry”