Engineer Sunday Adebayo Babalola was governorship aspirant in Kwara State during the 2023 elections. He is a retired Director of the now-defunct Department of Petroleum Resources, (DPR); a former acting Managing Director of Belemaoil Nigeria Limited and currently a director, of All Grace Energy. Babalola shares his opinion on a number of pressing national issues in this interview mind with THISDAY
What is your advice to the Tinubu administration on appointments and general governance?
I wish them well. I pray they will perform. I pray they will do excellently. They should put square pegs in square holes and round pegs in round holes of the same size. Let us forget ethnic chauvinism. The President should give responsibilities to people who can perform and not because they are from one ethnic group or the other. The idea of choosing people, because they are from a particular area rather than competence, should be jettisoned. Once the government continues doing that, things will not change. But when you pick competent people, irrespective of their political, tribal and religious affiliations, things will change positively in Nigeria. Whether for a minister, ambassador, or heads of parastatals, they should put the right people there.
When you give somebody a job to perform, give the person a time lag. Since you have four years, if within six months you did not see good performance, remove the person and put in another person. There are many people waiting for the job. He should not use emotions, statism, and other primordial instincts. He should use the right people. You may not get the right people the first time but when the person is delivering, give them the objective and what they should do, and how much you are expecting from them. If after, four months, or six months, you are not seeing the results you desire, remove him and put someone else there. There are many people waiting.
What about the energy sector? What should he do differently?
On the energy sector, former President Muhammadu Buhari approved the amended act of the National Assembly taking off the generation and distribution of power from the exclusive list such that states and individuals with competence can now generate, distribute, sell power and make their money. This is very good. There must be allowance for private power and they should be encouraged by making it easy for the sincere ones among them to access finance for them to do the work they planned to do.
Tinubu should also make sure that gas utilisation is encouraged. Nigeria is said to be a gas province but in reality, there is no direct exploitation for gas because it is not easy to store and it is a contract business. So, they should encourage the gas business through the exploration from upstream, midstream to downstream.
In the case of the oil business, the government should encourage more exploration. There are so many fields that have been discovered 30 or 40 years ago which they are giving out in marginal bid rounds in bits and pieces and they are actually messing them up.
The last bid round was a total mess up and it discouraged foreign investors. We should do our business in such a way that it should allow foreign direct investment.
Why did you say that the last bid round was messed up?
It was messed up, even some media called it an opaque bid round. It was opaque, the rules were not followed, and people such as four or five, were joined to one field. It does not make sense. The amount that people were asked to pay was exorbitant. It does not make any sense. There are many retirees who could have gotten fields and shown people how to run and leave it for future generations. But the amount they were asking for as a signature bonus was just crazy. If a retiree says he has that kind of amount, we should question how he got it. Of course, many people failed to pay. And it was given out on a discretionary basis to people who did not actually participate at all. There is a very reason to condemn the bid round. It is sad that my former organisation was the one that conducted it.
Which bid round are you talking about?
It is that of the 2020 bid round. The other one is gas flare and it is even sad because sincerely they had gone to the point of the award and somebody said, ‘No, cancel everything.’ No reason was given. And they cancelled everything. Now even the people who would have gotten investors to help them to develop those gas flare points, those investors will not come back here and would not take us seriously because we just cancelled it without reason. They just cancelled it and started all over again. So quite a number of people said they will not pay again. It did not show us as a serious country. Government is always a continuum. The one they are doing now, they have not finished it. The person that will be appointed as a minister may now say we will start afresh and that will be the third time if we are starting it afresh. It does not make any sense. It discourages foreigners from participating in our activities.
Some stakeholders believe that there are some aspects of the Petroleum Industry Act (PIA) that are not clear enough to give direction in the oil and gas sector of the country. What is your opinion?
There are blind spots in the PIA that should be clarified. There are overlapping provisions. There are provisions that are there that were not the original intent of the designers of the PIA. They changed drastically. I am happy that former President Muhammadu Buhari, at least, signed it into law, after over 20 years of trying to pass the bill. It is cheering that somebody finally did it. We give glory to God! But having done that, they can improve on it. For example, the blind spot is where you have the downstream in charge of the terminal. Terminal operation is actually an upstream business because from there you do a back calculation to the reservoir which affects you and when you take that out of the upstream, virtually they cannot do all the calculations they want to do, to be able to manage the reservoir properly. You need to do all those back calculations. Again, downstream took it.
I believe that all those small areas should be corrected and they should call the people who were originally planning the drafting of the bill to come and help them to clarify some of the grey areas. The two organisations that were holding meetings with the former Minister of State trying to lobby over their jobs, if the PIA was done very well, there would have been clarity that people did not need to sit down wasting man hours, talking that this is my job, this is your job.
Why are International Oil Companies (IOCs) leaving Nigeria?
They have seen better business somewhere else. If you see where you will make more revenues, gross or net, you will cross over. If you see where you are not over-regulated, you will prefer there. If you see where there is no insecurity, you will prefer the place. It is a business decision. I am not saying the factors I mentioned above are why they left but I am saying that they would have considered what benefits are here, viz a viz, where they are putting their money. The reality is that they would have a business decision because they are not a charity organisation and they are not Father Christmas. They are in business to make more money for their shareholders.
The surprising thing is that the places they have gone are not even better than the terrain they are leaving here: land, swamp and shallow water.
Are indigenous players taking advantage of the opportunities now in the oil and gas sector?
Yes, they are taking advantage but most of them are not using it very well. They are not managing it properly. Very few are actually managing it and we have records that the Nigerian National Petroleum Company Limited (NNPCL) has taken over about two companies because the management was poor. I suspect that many more companies will go the same way. Can NNPCL itself manage these things? It is because of funding. With NNPCL becoming a limited liability company now, the Joint venture Call may not be that easy to come by like before.
How do we enhance gas penetration in Nigeria?
You will have to explore more for gas. It has to be gas-targeted exploration. And you will encourage gas utilisation. You will encourage proper gas management.
The Kwara State Governor, Mallam Abdulrahman Abdulrazaq emerged as the Chairman of the Nigeria Governors’ Forum (NGF). What is your wish for him?
The Constitution of the Federal Republic of Nigeria does not provide for NGF. The forum does not add value to the states they govern but rather get the governors together to compare notes in order to let them do whatever they see the others do whether it is good for their states or not. Was that not the forum where they decided to strangulate the local government administration in their domain? My opinion is that each governor should sit down to administer his state according to the needs of each of them.
