Alison Madueke
Mrs. Diezani Alison-Madueke needs no introduction. She has the unique distinction of holding a ministerial post for eight unbroken years under two successive administrations. But it was her tenure as the Minister of Petroleum Resources from 2010 to 2015 for which she would be most remembered. In her position as minister and Chairman of the Nigerian National Petroleum Corporation, her tenure was riddled with controversies, allegations of corruption, mismanagement and opacity that would take years to live down. She was deemed aloof, inaccessible and an absentee minister who was hardly at her desk. She was reviled and blamed for much of the ills – real and imagined – of the oil and gas sector.
But in this rare, unrestrained and unsparingly brutal two-hour interview with Ijeoma Nwogwugwu, she finally addressed several of the questions that had been begging for answers. Among other issues, she spoke on her accomplishments and the structural problems of the petroleum sector, Emir Mohammad Sanusi II and the $20 billion question, the PwC forensic audit, her attempts to turn around NNPC and its exploration and production subsidiary NPDC, the efforts to end the fuel subsidy regime and privatise the refineries, the contending forces and personalities whom she came up against as minister, her stand off with the National Assembly, her current absence from the country, and the general perception and rumours that swirled around her stewardship. Excerpts:
There have been so many things said about the Petroleum Ministry and the Nigerian National Petroleum Corporation (NNPC) – about the corruption, inefficiency and what have you – during your stewardship. What were the major challenges and why was it difficult to transform NNPC to become self-sustaining financially and better positioned to become a truly national oil company?
I think that quite clearly in terms of NNPC, we strove from the beginning due to the historical challenges that NNPC had. As you know, over the past 25 years, NNPC has been severally known to have a non-transparent opacity about the way and manner in which it does its business. Some of these might be perceived, a lot of it also real. So when we came in 2010 to 2011, the intent was to very quickly look at ways and means to open up NNPC in particular, because NNPC is the core parastatal with operational and legal parameters binding it.
The NNPC Act gives it operational independence and gives the Group Managing Director a lot of powers as well. So we moved very quickly to try and ensure that we moved it towards what we would consider an entity that operated along private sector lines. In other words, we tried immediately to move it, even with our first reform processes, before we even went into the Petroleum Industry Bill (PIB) to try and pull out areas that were inherent in the original PIB for reform processes. Some of the measures such as the Gas Master Plan, Local Content Act, amongst other areas, were introduced. I think we did that all very successfully and we immediately ensured the passage of the Local Content Bill and moved aggressively to establish that, against a lot of push back from multinationals and other established oil and gas entities, especially the foreign ones.
We opened up the sector to ensure that hundreds of Nigerians came into the downstream sector and that so many areas hitherto handled by foreign subsidiaries were taken up by Nigerian marketers in the downstream service sector. The number of marine vessels owned and operated by Nigerians rose substantially, the number of rigs owned by Nigerians rose substantially, pipeline fabrication, pipe mills and other varied areas of supply and fabrication within the downstream sector also grew, such that over 300,000 direct and indirect jobs have been created over the last four years. In the same vein, we ensured that our support for local content also permeated the upstream as well, such that for the first time in history, companies and multinationals such as Shell, Chevron, etc, began to divest their producing assets to Nigerians within the upstream operating sector who could actually take on those assets and who could actually meet the very stringent fiscal terms needed to operate those assets and also take up those area of intense capacity building and expertise to begin to operate in the Nigerian upstream market.
… (Cuts in) But wasn’t that driven by militancy and increasing vandalism in the Niger Delta?
Not exactly. To some extent, originally, many of the multinationals wanted to get out of some of their onshore producing assets because of the militancy, but particularly because of the communal issues which had plagued the oil and gas industry in the last 30 years and more. But in this instance, a number of the multinationals were now veering into the deep offshore which has much more optimal potential for them in terms of production volume, cost, etc, and wanted to move out of these onshore blocks or out of the shallow offshore blocks which they felt were no longer optimal in terms of production and it was in these areas that they were prepared to have Nigerians come in.
With the support of government, for the first time, we were able to push quite a number of indigenous acquisitions in this area. You will recall that these were pretty much headed by the Seplat acquisitions which was signed off finally when we first came on board in 2010, Afren, etc. So we were very pleased that we were able to support Nigerians both in the downstream sector and also in the upstream sector in terms of acquisition of these blocks which no doubt will continue in the short to medium-term as we continue to move forward. This is very important because these are not marginal blocks, these are actually producing entities; as you acquire and you come up to speed, and you are already putting production volumes into the market. So that was on the one hand.
On the other hand, we moved straight into the Gas Master Plan and pulled it out of what was originally the PIB. Now, the Gas Master Plan when we pulled it out ensured that we began to look at things from a very structured way of how we deploy gas, and gas infrastructure particularly for the purpose of supplying domestic gas in Nigeria because it was quite clear that over the years, government had sort of gotten it wrong in terms of domestic gas. Whereas we were doing very well in terms of our export LNG potential and the revenue derived from that, in terms of domestic gas, we had not put infrastructure in place to even pipe that gas to the various independent power plants (IPPs) which were to come on stream over these next few years and in fact as you know, have been coming on stream over the last few years. So we came in 2010- 2011 to find out that there was no infrastructure for our gas pipelines and we therefore had to go backwards and begin to ensure that we established that pipeline infrastructure and over the last four years, we have put in place almost 500 kilometres of gas pipelines without which we could not possibly begin to service all the requisite independent power plants with the required gas that we were trying to ensure goes from gas-to-power. Now, because this was not done when it should have been done, which should have been in the last seven to eight years, it meant that we were working backwards and we engaged entities such as the International Finance Corporation (IFC) to help us with the feasibility studies and later on to bring in financiers for investment purposes in the pipeline infrastructure.
And so far, we did pretty well with that and by 2018 we expect that another 500 kilometres of pipeline infrastructure would be in place and that every major IPP should be linked up to the requisite pipeline infrastructure across the country. We also have major, and I think historic tranches of pipelines such as the Obibi 3, the AKK pipelines and others, which are now either in place or being put in place, and should be put in place in the next three to four years. It is expected that if we maintain the current state of pipeline infrastructure, by 2018- 2019, Nigeria would be almost completely linked up to the gas pipeline infrastructure network in terms of gas-to-power, assuming all other factors on the power side – transmission, distribution, etc, are adequately taken care of, so our power issues should be a thing of the past.
Again, on the gas side, we did pretty well in terms of the basic domestic gas tariffing and pricing; it was a fundamental area we had to address from the beginning and as you know we went into various areas of tariffing to ensure that we got to a point where our gas pricing for domestic gas was competitive with anywhere else in the world. That was to ensure that multinationals and other suppliers of gas would be in a position to come on board and supply the necessary volume of domestic gas for gas-to-power and also for gas industrialisation which was beginning to move on as well. We also went into a historic first time discourse with NERC (Nigerian Electricity Regulatory Commission), the Power Ministry and the CBN (Central Bank of Nigeria) to ensure that N36 billion in legacy debt that was owed to gas suppliers and was holding us back, was also cleared by the CBN. So in terms of gas, a lot has been done and like I said, a lot would be done if we keep up this pace over the next four years.
Also, we moved from January 2012, when we realised the problem we were going to have in the sector and this was to try to move away from the areas where we thought there was inherent corruption and non-transparency in the sector. And one of the key areas from the time we came in, was the area of subsidy payments. We said from the beginning that the subsidy on petroleum products was not addressing the root cause of the problems that it was put in place to address. What we found when we came in was that the middlemen were acting as the fat cows and they were usurping the benefits of the subsidy we were paying and in many cases, there was major round-tripping taking place and the actual man and woman on the street buying those products were not getting the products at the subsidised price that they were expected to get it at. In view of this, in November 2011, I signed to remove 92 throughput marketers from the list of PPPRA (Petroleum Products Pricing Regulatory Agency), through whom PMS (petrol) allocations were made because it was becoming clear to us that among these throughput marketers, it appeared that round-tripping, among other sharp practices were taking place.
By January 1, 2012, I had directed, with the approval of the president, that the Executive Secretary of PPPRA move for complete deregulation, meaning that subsidy would have been removed entirely and with it, the scourge of corruption and opacity that had followed it all these years. We moved for complete deregulation to also ensure that the funds that were entrapped in the economy for subsidy which actually do not get to the bottom-line users would then be deployed for critical things in the economy such as health, schools, and others. And this is a standard case everywhere in the world, as it is stated very clearly that subsidies, in general, are not fiscal processes that are useful to the bottom-line polity in any economy. Unfortunately, even though we moved for complete deregulation, there was a complete push back again on it within the polity and we were not able to completely deregulate, although we achieved partial deregulation.
Again, there was an area where there was clear malpractice, clear corruption being meted through this process and again we moved to remove it at that time. We moved from that very speedily again by trying to reform NNPC, so we revamped the PIB in 2012. I sat nights and days with the committee handling the PIB in a bid to create a bill that will truly unbundle NNPC, which would for the first time create a national oil company that could operate along private sector lines, that would have private equity holdings, that would ensure that NNPC or the national oil company would have to answer to the Nigerian people in terms of its equity shareholding and because of that, would have to operate like every other competitive private company – it would have to make its revenue, its profits and its books would be open for the entire country to look at and peruse. I thought that would be the clearest, direct and most aggressive way to entirely remove or cut to the barest minimum, the age-old scourge regarding NNPC’s corruption, its non-transparency, its opaqueness, etc, and indeed, the PIB would have done that.
Not only did we do that, the PIB would have created two regulatory bodies with only dotted line answerability to the minister. In the current organogram, the Department of Petroleum Resources (DPR), which is the regulatory body, reports directly to the Minister of Petroleum or to the Ministry of Petroleum Resources. We felt it was not proper and that just like NERC, we should have an upstream and downstream regulatory body that only has dotted line reporting to the minister. We created an Asset Management Company, which would hold the joint venture partnerships and assets and we felt that should have a new shareholding as well. We tried to do everything possible to ensure that the various units we created under the PIB would clearly and very concisely unbundle NNPC completely so that the corporation that we see today will no longer exist and that in fact, the various elements we would see would be elements that are private sector-driven, open and transparent. So these were all areas that we moved very aggressively on from the beginning of this administration and it was our hope that once these areas moved forward, they would have created not only sustainable structures, both in terms of revenue, policy and process framework for the industry, they would clearly have created a completely new framework in terms of the way a national oil company operates for Nigeria in terms of sustainably into the future.
Let me also add that even in terms of the refineries and refined products for Nigeria which has been a major problem for us over the years in terms of the optimisation of our refining capacity and the run down state in which we found the refineries when we came in between 2010 and 2011. When we looked at the situation and digested it in every possible manner, it was found that just like the power sector, government has no business being in major areas of infrastructure such as refineries. It is inefficient for government to be there.
So while government should in fact hold a certain percentage, in terms of its ownership structure so that it has a stake in the refineries, these refineries should be opened up to private sector entrepreneurs who can take them and run with them, and create them into models of private sector efficiency for the benefit of the nation in terms of refined products deployment in the short, medium and long-term. Accordingly, we moved in 2013, prepared the framework for the privatisation of the refineries to ensure that indigenous players could come in and turnaround our refineries, recreate them and begin to give us the needed distribution and supply of products. With the president’s approval, we moved on this aggressively. Unfortunately, as we tried to deploy it, there was a major push back again, this time from the unions, who were completely against the privatisation of our refineries and as you can see, over the last one-and-a-half years, it has been difficult to optimise the usage of the refineries because the funding to invest in them from the government side is just not there. And unfortunately, we have seen over the last one year, a drop in the price of crude oil by almost 50 per cent, which means that our funding level has almost been depleted.
On top of that, there have been rising cases of vandalism and sabotage, even more now than oil bunkering, because bunkering has reduced. But this vandalism means that for a great period of time, the multinationals and others would have shortened and deferred production, meaning that our volume of production continues to remain low. That has of course affected even our excess crude savings and our budget. So these are all the areas that we had zoomed in on in terms of trying to ensure that we opened up NNPC and created a much more transparent and competitive oil and gas sector.
Unfortunately, as I pointed out, on virtually every of these fronts, we were pushed back very strongly and aggressively by the same polity that we were trying to protect by moving forward with these major changes in the fabrics of the oil and gas sector. Having said that, even with the major push back on the PIB which has languished in the National Assembly for two years, we still were able to carry out reforms in the gas sector through the Nigerian Content Act and supported Nigerian operators and marketers as aggressively as possible to ensure that in most areas in the oil and gas sector there was actually a boom in terms of the presence of Nigerian downstream service providers and operators.
You said there was considerable push back even with the PIB, what led to this push back? Was it political by certain interests in the National Assembly or was it commercially driven by the IOCs (International Oil Companies) and their governments and why couldn’t you do more to get it passed into law as the minister; after all, it was your bill?
I think this was one of our biggest setbacks over the last four years, considering the fact that we put so much effort into the PIB to unbundle NNPC in all of its ramifications. The push back I think was a hydra-headed issue. On the one hand, the multinationals, of course, were not happy with the new fiscal terms we were putting on the table. Those fiscal terms were based on the fact that the 1993 production (sharing) contracts signed by Nigeria were extremely punitive towards Nigeria. It meant that higher revenues from the deep offshore, which we should have been enjoying now as a country, we are not enjoying.
The 1993 production sharing contracts meant that we were getting very little revenues back from the production sharing contracts in the deep offshore and these are highly profitable contracts. So we tried to change the fiscal template to ensure that Nigeria gets a bit more in terms of profitability from the production sharing contracts, and that was the major bone of contention. We did not actually change the template of the joint venture returns or equity returns. We left those ones. It was the production sharing contracts that the multinationals worked against. Even at that, I issued a directive that NNPC and the committee should sit down and take a closer look at the concerns raised by the IOCs. But at the time this was happening, the bill was already before the National Assembly.
Now, of course, there would be many other interest groups with a bill as far reaching as the PIB. A bill that is as far reaching as far as the communities and other stakeholders, both national and international, has so many interested parties. So it is very difficult sitting in one place to pinpoint the interested parties and the areas that were set up against the bill. We worked very hard on that bill and I made sure what we put forward was the best at the time. Unfortunately, like I said, once it (PIB) leaves the executive, it is no longer under my control. So the moment it moved from Mr. President to the legislature, I had no control over it. All we could do was to offer any assistance in resolving areas where there were unclear issues with the National Assembly if they so required. Beyond that, it is virtually illegal for me as Minister of Petroleum Resources to interfere with a bill that is under the purview of the National Assembly.
But this is an executive bill and so you should have lobbied to get it passed?
Oh we continued to do that. Every step of the way, we continued to interface, we continued to have discussions and we rendered ourselves available for any interaction on the PIB. But despite that and despite many meetings on the issue, it still remained unpassed by the National Assembly. Like I said, beyond all these areas of trying to support and assist, it was out of my purview to do anything other than what we tried to do to push the bill through.
Back to NNPC, you said you tried to introduce a number of reforms, but in spite of your best efforts, the parastatal could not rise above certain issues. There was the allegation of the missing $20 billion made by the former CBN Governor. Don’t you think that some of these allegations had to do with the fact that there was institutionalised corruption, mismanagement and insufficient transparency in NNPC, which you chaired as the Petroleum Minister?
I agree completely and again this goes back to what we tried to do from the get go when I came into the Ministry of Petroleum Resources. Like I said, from the moment I came in, I looked at the historic precedent set by NNPC and the fact that over the last 25 years, NNPC has been majorly seen as a corrupt, not transparent, opaque institution and that was why I moved aggressively to try and open it up as quickly as possible, and to truly reform the NNPC. Right now, the NNPC is not a competitive organisation and it cannot be a competitive organisation unless it is run along private sector lines, is profitable and is made to compete against other similar entities, not only in Nigeria, but in other parts of the world as well for it to be able to stand. That is not what is happening now. Right now, it is a government entity with all the accompanying problems that government entities have.
….(Cuts in) I disagree with you here because we do have some national oil companies that are 100 per cent owned by their countries like Saudi Aramco and Petronas, and yet they seem to operate better than NNPC. They are more transparent, much more profitable and self-sustaining. They didn’t wait to be privatised, they didn’t need a PIB to be that efficient, and so what is wrong with NNPC?
I must say that for Petronas (Malaysian national oil company) and Saudi Aramco, but let’s not talk about Petrobras (Brazilian national oil company) because they have their issues.
But this is an executive bill and so you should have lobbied to get it passed?
Oh we continued to do that. Every step of the way, we continued to interface, we continued to have discussions and we rendered ourselves available for any interaction on the PIB. But despite that and despite many meetings on the issue, it still remained unpassed by the National Assembly. Like I said, beyond all these areas of trying to support and assist, it was out of my purview to do anything other than what we tried to do to push the bill through.
Back to NNPC, you said you tried to introduce a number of reforms, but in spite of your best efforts, the parastatal could not rise above certain issues. There was the allegation of the missing $20 billion made by the former CBN Governor. Don’t you think that some of these allegations had to do with the fact that there was institutionalised corruption, mismanagement and insufficient transparency in NNPC, which you chaired as the Petroleum Minister?
I agree completely and again this goes back to what we tried to do from the get go when I came into the Ministry of Petroleum Resources. Like I said, from the moment I came in, I looked at the historic precedent set by NNPC and the fact that over the last 25 years, NNPC has been majorly seen as a corrupt, not transparent, opaque institution and that was why I moved aggressively to try and open it up as quickly as possible, and to truly reform the NNPC. Right now, the NNPC is not a competitive organisation and it cannot be a competitive organisation unless it is run along private sector lines, is profitable and is made to compete against other similar entities, not only in Nigeria, but in other parts of the world as well for it to be able to stand. That is not what is happening now. Right now, it is a government entity with all the accompanying problems that government entities have.
….(Cuts in) I disagree with you here because we do have some national oil companies that are 100 per cent owned by their countries like Saudi Aramco and Petronas, and yet they seem to operate better than NNPC. They are more transparent, much more profitable and self-sustaining. They didn’t wait to be privatised, they didn’t need a PIB to be that efficient, and so what is wrong with NNPC?
I must say that for Petronas (Malaysian national oil company) and Saudi Aramco, but let’s not talk about Petrobras (Brazilian national oil company) because they have their issues.
I think we have to be clear here. We have developed a system over the last 30 years, which has been standing without reforms of any type. We have gone through the pretence of reforms over the last 30 years and I can assure you that this is the first time we are had an open audit, a forensic audit that has been open and has been shown to the entire world. Before this forensic audit, we did one two years ago, another PwC audit which I directed to ensure that we looked at all our process issues and tried to find out where we had problems and it showed up quite a few gaps. This was just before the particular audit that was done based on the $20 billion that was said to be missing by the former CBN Governor. The point I am trying to make is that we had started putting in place various open audit processes.
However, Saudi Aramco, Petronas have systems that have been continuously updated and rejuvenated. I know what I saw when I came in 2010-2011, in terms of the auditing process of the NNPC and the sort of accounting systems that they had been carrying. If we do not go down and continuously revamp and update the systems and processes, there is no way you can stand side by side with organisations such as Saudi Aramco which are constantly reinventing themselves.
NNPC has not done that and one of the fastest ways to do it in an economy such as ours would actually have been through the unbundling with legislative backing. So I think we must look at it within the context of Nigeria itself, the situation we found NNPC when we came in, and the historical situation of NNPC. I think in our context, we wanted to be very sure that every Nigerian saw how the system was being operated in a very clear and transparent manner and that would give it the right basis for us to go forward into the future.
I came from the most organised private sector, which is Shell Petroleum, I was there for almost 17 years and because of the way in which we handled our processes there, I felt from the get go, that this (passage of the PIB) would be absolutely the right thing to do and that no Nigerian would have been able to fault us. This was our intention when we came in and unfortunately, we received major push backs and till today, the unbundling of NNPC and the PIB has not moved forward in the National Assembly.
On the PwC forensic audit, why did it take so long for you to make it public, or why was it that you had to wait for so much pressure to be applied, to the extent that President Muhammadu Buhari had to say there would be another audit of NNPC, which forced the government to release the full PwC report?
I am not really in a position to answer that simply because the PwC forensic audit was put in place by the Auditor-General of the Federation and not by me. So the full deployment of the forensic report was not under my purview at all. We saw the summary just as everybody else saw the summary and at some point, we had to request the full details to be able to look at it as well. So the timing of the release of the audit had nothing to do with the Minister of Petroleum Resources. But we felt all along that the full report should have been released from the get go, so that Nigerians would have an opportunity to look at it. I had said from the beginning that at any point in time, the NNPC should be absolutely open for audit of any type. In fact, that is necessary and so I am not sure whether or not the PwC report coming out at the time it did or not coming out earlier on, has anything to do with any other forensic audit that may be done. I think that other forensic audits have to be done on the NNPC.
But at some point, you were quoted as saying that the reason you didn’t want it out was that it would be politicised before the elections?
I think what I said was taken out of context because a lot of things have been reported on what I said. Like I said, the report was not in my domain to bring out and we also expected that the full report would have been put out from the get go. A summary was put out first, I also saw it and I thought the full report was coming out. If it was in my purview to put out, it would have been put out from the first day for everybody to discuss and look at the various issues that arose from the report.
NPDC in the last five years has acquired a lot of assets through NNPC in the form of operatorship, but it has not been particularly successful in operating these oil blocks. And NPDC retained operatorship, because you insisted as the minister that it operated these assets that were sold by Shell and its partners to Nigerian firms. Yet, in recent weeks, you reversed this. What informed that decision and is the allegation that the decision to review the operatorship might have been induced by external considerations?
First of all, in 2010, NNPC made a series of in-depth presentations to me and (former) President Goodluck Jonathan in terms of the need for NNPC, through NPDC, to begin to grow capacity and to grow NPDC as Nigeria’s national oil company. To do that of course and for it to grow as the Saudi Aramco, Petronas and the like, we felt that we would need to put our money where our mouth is by creating a national oil company. But to do that, it needed to go through a long schedule of opportunity and that opportunity was not only created by the government at play or at hand. So NNPC made a number of aggressive presentations and finally convinced Mr. President and myself that in fact we could grow NPDC into a viable and sustainable national oil company. There was nothing wrong with that at all. In fact, that was the right thing to do. Now, in doing that, we assumed certain parameters such as first of all, that NPDC must be able to grow its capabilities and professional expertise over the next four years. Also, that they would buy expertise and knowledge to do that because I wasn’t convinced that they had it at that time at all. All those assurances were given, all the parameters were given, and so many indices were reviewed at that time and we were convinced that if they stuck with the programme, they would evolve over a period of time into a strong national oil company.
I am not really in a position to answer that simply because the PwC forensic audit was put in place by the Auditor-General of the Federation and not by me. So the full deployment of the forensic report was not under my purview at all. We saw the summary just as everybody else saw the summary and at some point, we had to request the full details to be able to look at it as well. So the timing of the release of the audit had nothing to do with the Minister of Petroleum Resources. But we felt all along that the full report should have been released from the get go, so that Nigerians would have an opportunity to look at it. I had said from the beginning that at any point in time, the NNPC should be absolutely open for audit of any type. In fact, that is necessary and so I am not sure whether or not the PwC report coming out at the time it did or not coming out earlier on, has anything to do with any other forensic audit that may be done. I think that other forensic audits have to be done on the NNPC.
But at some point, you were quoted as saying that the reason you didn’t want it out was that it would be politicised before the elections?
I think what I said was taken out of context because a lot of things have been reported on what I said. Like I said, the report was not in my domain to bring out and we also expected that the full report would have been put out from the get go. A summary was put out first, I also saw it and I thought the full report was coming out. If it was in my purview to put out, it would have been put out from the first day for everybody to discuss and look at the various issues that arose from the report.
NPDC in the last five years has acquired a lot of assets through NNPC in the form of operatorship, but it has not been particularly successful in operating these oil blocks. And NPDC retained operatorship, because you insisted as the minister that it operated these assets that were sold by Shell and its partners to Nigerian firms. Yet, in recent weeks, you reversed this. What informed that decision and is the allegation that the decision to review the operatorship might have been induced by external considerations?
First of all, in 2010, NNPC made a series of in-depth presentations to me and (former) President Goodluck Jonathan in terms of the need for NNPC, through NPDC, to begin to grow capacity and to grow NPDC as Nigeria’s national oil company. To do that of course and for it to grow as the Saudi Aramco, Petronas and the like, we felt that we would need to put our money where our mouth is by creating a national oil company. But to do that, it needed to go through a long schedule of opportunity and that opportunity was not only created by the government at play or at hand. So NNPC made a number of aggressive presentations and finally convinced Mr. President and myself that in fact we could grow NPDC into a viable and sustainable national oil company. There was nothing wrong with that at all. In fact, that was the right thing to do. Now, in doing that, we assumed certain parameters such as first of all, that NPDC must be able to grow its capabilities and professional expertise over the next four years. Also, that they would buy expertise and knowledge to do that because I wasn’t convinced that they had it at that time at all. All those assurances were given, all the parameters were given, and so many indices were reviewed at that time and we were convinced that if they stuck with the programme, they would evolve over a period of time into a strong national oil company.
To allow them to do that, we also had to allow them to take on various roles; hence we fought for them, and it was a major fight with interested indigenous and foreign operators to allow them to take over the operatorship of some newly divested assets which at that time Shell had sold between 2011 and 2012. This was meant to allow them (NPDC) to begin to build capabilities. That was how we kicked off. However, because I was watching diligently what was happening, it also became clear to me by 2013 that there were lapses in NPDC’s capabilities and that the capabilities and expertise they were supposed to have, to allow them to continue as an operator in a strong and formidable sense were not at the level that they should have been.
So by last year, we had to sit down and begin to look at the various parameters, particularly because the volume of production from those divested assets were not at the level of play that they should have been and the owners or JV partners of those assets were of course quite concerned and had also reached out to us in this respect.
So by last year, we had to sit down and begin to look at the various parameters, particularly because the volume of production from those divested assets were not at the level of play that they should have been and the owners or JV partners of those assets were of course quite concerned and had also reached out to us in this respect.
As a result, we felt that all in all, we should look at a new model so that it would be a win-win situation for everybody. And so we came up with a joint operating model where the owners of those assets and NPDC would work within this joint operating model, but where we would agree that the private sector owners/partners would take over operatorship for a given period of time. In this case, we said 10 years and the reason I stuck with 10 years was because when we looked at the 5-year case model, the banks were not interested because of the high capital outlay for this sort of investments, and of course by last year, the price of crude oil was beginning to fall. So we took all these into consideration and felt 10 years was sufficient time for the banks to be comfortable in terms of heavy capital investments to support these oil blocks. We agreed that the new owners of these assets would take over as operators for 10 years under the joint operating model so that they would infuse not only funding, but also the expertise needed to increase our production volumes for Nigeria in that period of time.
At the end of the 10 years, it was expected that the federal government would look at it again. If the federal government wanted to take over at that particular time, then presumably, within that 10 years, the joint operating model would also allow the national oil company, NPDC, or its successor that the government wants to grow its expertise and capacity, to take over after. But of course, after 10 years, government may decide that they are very happy with the situation as it is and may decide that the private sector partners should continue for another 10 years or how long government decides at that time. So we thought it was a very viable model and one that gave a win-win situation and that was the model that we were moving forward with.
Let me put it less succinctly, is there any truth in the allegation that money passed hands and might have influenced your decision in transferring operatorship to the Nigerian companies, and with the benefit of hindsight, do you think the Strategic Alliance Agreement (SAA), which NPDC entered into with Atlantic Energy Concept Limited, was in the best interest of NPDC and Nigeria?
I am not aware of any money passing hands into any private pockets. The joint operating model was brought up over a period of time because we saw strictly that NPDC had not grown the requisite capacity to handle the operatorship in the manner in which it should have been, and because our production volume was falling in all those oil blocks and I think that from that point of view alone, it was critical that we reviewed the situation and put in place a model that works for Nigeria going forward and I think we did that successfully.
Let me put it less succinctly, is there any truth in the allegation that money passed hands and might have influenced your decision in transferring operatorship to the Nigerian companies, and with the benefit of hindsight, do you think the Strategic Alliance Agreement (SAA), which NPDC entered into with Atlantic Energy Concept Limited, was in the best interest of NPDC and Nigeria?
I am not aware of any money passing hands into any private pockets. The joint operating model was brought up over a period of time because we saw strictly that NPDC had not grown the requisite capacity to handle the operatorship in the manner in which it should have been, and because our production volume was falling in all those oil blocks and I think that from that point of view alone, it was critical that we reviewed the situation and put in place a model that works for Nigeria going forward and I think we did that successfully.
Yes there was an official percentage fee that was agreed by DPR, on which I cannot give the full details, but it is there and it is in the agreement and that was handled. In terms of Atlantic Energy, I think again, the Strategic Alliance Agreement in itself was quite thorough. It was handled and negotiated over a number of weeks by the then GMD in 2010 or 2011. In fact, I recall that it was said at that time that it was quite tight, in other words, it was not as profitable as those participating in the agreement had hoped for at the beginning. But it was again put in place because the NPDC needed the cash infusion to continue its business, as there were difficulties getting these cash infusions from fiscal entities.
Moreover, we have had different types of Strategic Alliance Agreements over the last 20 years involving NNPC, because government has not been able to fund its own share of the various major oil projects. So there are all sorts of modified funding agreements within the oil and gas sector that exist. They have different names, but they are all very similar. Now the Atlantic one was premised on the one that Seplat had already signed sometime earlier and I must say that was a very successful SAA. So the SAAs were hatched out with the best possible intentions. The one of Seplat went very well, so the issue was not the agreement, the issue was the implementation. If implementation was not adhered to strictly as it should have been, and the parameters were not followed properly, of course there are loopholes in every agreement.
So who was responsible for enforcing the SAA?
NNPC! There is the GMD, the Group Executive Director (GED) of Exploration and Production (E&P) Directorate, and of course, the Managing Director of NPDC. Direct enforcement is the Managing Director of NPDC. But the Managing Director of NPDC reports to the Group Executive Director, E&P, under NNPC. The E&P Executive Director then reports to the GMD. The GMD, of course, is the highest level in terms of operational responsibility in the NNPC and within the oil and gas sector for government in terms of technical and operational areas. Where there are problems that overrides the GMD’s responsibility or that he feels are such that they should be escalated, he is then supposed to escalate to the minister. But in terms of implementation, it falls directly under the GMD and the GED; that is why they have all those levels of technical responsibility under the NNPC.
But wasn’t that agreement (SAA) harshly criticised over the fact that Atlantic Energy supposedly invested only about $50 million for which it was lifting several thousands of barrels of crude oil a day, and which was very opaque and Nigerians did not understand? Why was Atlantic Energy allowed to lift that quantity of oil?
I think those are the issues that arose under the investigation (Senate probe and PwC forensic audit). Like I said, these issues are operational issues under NNPC and the minister did not have to go into that
So did heads roll over this issue?
Yes, but I must say that these are operational areas under NNPC. As minister, I don’t go down into the operational areas. They are supposed to escalate issues to the minister. On the issue of Atlantic Energy, we began to hear a lot of information from outside and I enquired on a number of occasions through the operational heads, whether there were any issues and I was told there were none. It got to the point when the sources of my information, anonymous however, where I had to go a little bit deeper. From the information I was receiving, I was getting very concerned even though I was being told that all was well. I then had to direct, which was not even my job as minister, that the Managing Director of NPDC should be reassigned and that the GED E&P (Mr. Abiye Membere), after discussion with former President Goodluck Jonathan, should also be relieved of his post, so that we could get to the bottom of this because we were getting too many stories and too much negative information. As soon as I did that, I then directed that an investigation should take place and a committee was set up and investigation began. It was at that point that the full issue of reconciliation, the commercial transaction, and others, now came to the fore. So once I set up those processes, I then allowed them to take their due course.
Was it in that period that Atlantic Energy was stopped from lifting crude oil?
Immediately I reassigned the MD of NPDC as we started the investigation, they were stopped from lifting and NPDC, with an acting MD, took over lifting for Nigeria at that point in time.
But we understand they (Atlantic Energy) have resumed lifting crude oil?
No they have not because the reconciliation process was still ongoing from what the committee briefed me.
You said crude oil theft had fallen with the Amnesty Programme that was put in place. But there is a contrary opinion. Apart from pipeline vandalism, there is the opinion that institutionalised theft from the top continued under your watch, and that impacted our crude oil output. Why is it that in your position as minister and in spite of several recommendations and advisories for you to put an automated metering system in place at the oil wellheads and terminals, you never took this advice?
No, first of all let’s back track a little bit. I always made it clear that institutional theft was a major concern to us and we had over this period of time, tried to work assiduously both with EFCC and various security agencies and other stakeholders in trying to create ways and means to address or mitigate these institutional theft, particularly at the wellheads and terminals. On the issue of metering, these are issues that we discussed vastly and the NNPC had in fact started a programme where they believed that those metering devices could in fact be put in place over a period of time. Again, there was the cost factor that had to be looked into because with our vast tranches of pipelines in Nigeria, we had to take all these into account as well, in terms of the financial outlay that would have been required to put the meters in place. NNPC had also looked at the facilities to cover the deployment of this sort of metering facilities over a period of time. But it is unfortunate that over the last 10 years or so, we were not actually able to move these forward.
So who was responsible for enforcing the SAA?
NNPC! There is the GMD, the Group Executive Director (GED) of Exploration and Production (E&P) Directorate, and of course, the Managing Director of NPDC. Direct enforcement is the Managing Director of NPDC. But the Managing Director of NPDC reports to the Group Executive Director, E&P, under NNPC. The E&P Executive Director then reports to the GMD. The GMD, of course, is the highest level in terms of operational responsibility in the NNPC and within the oil and gas sector for government in terms of technical and operational areas. Where there are problems that overrides the GMD’s responsibility or that he feels are such that they should be escalated, he is then supposed to escalate to the minister. But in terms of implementation, it falls directly under the GMD and the GED; that is why they have all those levels of technical responsibility under the NNPC.
But wasn’t that agreement (SAA) harshly criticised over the fact that Atlantic Energy supposedly invested only about $50 million for which it was lifting several thousands of barrels of crude oil a day, and which was very opaque and Nigerians did not understand? Why was Atlantic Energy allowed to lift that quantity of oil?
I think those are the issues that arose under the investigation (Senate probe and PwC forensic audit). Like I said, these issues are operational issues under NNPC and the minister did not have to go into that
So did heads roll over this issue?
Yes, but I must say that these are operational areas under NNPC. As minister, I don’t go down into the operational areas. They are supposed to escalate issues to the minister. On the issue of Atlantic Energy, we began to hear a lot of information from outside and I enquired on a number of occasions through the operational heads, whether there were any issues and I was told there were none. It got to the point when the sources of my information, anonymous however, where I had to go a little bit deeper. From the information I was receiving, I was getting very concerned even though I was being told that all was well. I then had to direct, which was not even my job as minister, that the Managing Director of NPDC should be reassigned and that the GED E&P (Mr. Abiye Membere), after discussion with former President Goodluck Jonathan, should also be relieved of his post, so that we could get to the bottom of this because we were getting too many stories and too much negative information. As soon as I did that, I then directed that an investigation should take place and a committee was set up and investigation began. It was at that point that the full issue of reconciliation, the commercial transaction, and others, now came to the fore. So once I set up those processes, I then allowed them to take their due course.
Was it in that period that Atlantic Energy was stopped from lifting crude oil?
Immediately I reassigned the MD of NPDC as we started the investigation, they were stopped from lifting and NPDC, with an acting MD, took over lifting for Nigeria at that point in time.
But we understand they (Atlantic Energy) have resumed lifting crude oil?
No they have not because the reconciliation process was still ongoing from what the committee briefed me.
You said crude oil theft had fallen with the Amnesty Programme that was put in place. But there is a contrary opinion. Apart from pipeline vandalism, there is the opinion that institutionalised theft from the top continued under your watch, and that impacted our crude oil output. Why is it that in your position as minister and in spite of several recommendations and advisories for you to put an automated metering system in place at the oil wellheads and terminals, you never took this advice?
No, first of all let’s back track a little bit. I always made it clear that institutional theft was a major concern to us and we had over this period of time, tried to work assiduously both with EFCC and various security agencies and other stakeholders in trying to create ways and means to address or mitigate these institutional theft, particularly at the wellheads and terminals. On the issue of metering, these are issues that we discussed vastly and the NNPC had in fact started a programme where they believed that those metering devices could in fact be put in place over a period of time. Again, there was the cost factor that had to be looked into because with our vast tranches of pipelines in Nigeria, we had to take all these into account as well, in terms of the financial outlay that would have been required to put the meters in place. NNPC had also looked at the facilities to cover the deployment of this sort of metering facilities over a period of time. But it is unfortunate that over the last 10 years or so, we were not actually able to move these forward.
But I think that we also deployed more fundamental tranches which were to address this particular problem. Part of the solution, however, is not just the metering, because those can be tampered with anyway, is the justice system. The question is, how many people have been taken to court? How many people have been booked for these crimes and made public in the first place? So there are many tranches to this which we were looking at, at the same time. Yes, the metering system is one, but there were some other fundamental issues that needed to be addressed and we were working through all these with the requisite agencies.
Yes, but there are allegations that the institutionalised oil theft involved some of the staff of the IOCs and even some of ex-militants involved in the pipeline surveillance contracts, and when culprits were caught, orders came from Abuja to release them.
Well, I must be very honest with you I can’t answer that because I don’t have those answers. I heard the same thing as you have heard. But it is not a question that I can answer. I have not been given that information and so it is very difficult for me to guess who the individuals or the organisations are.
Emir Sanusi in a recent interview with the Financial Times after the release of the full PwC report brought up another figure of yet another $18.5 billion that is unaccounted for with reference to the kerosene subsidy issue. Kerosene subsidy has always remained controversial and yet the product is not available to Nigerians at the official price till now. What is it that can be done to stop the scam in this area?
Well, like I said before, it has to be deregulated. Take away the subsidy and let the market parameters of supply and demand come into play whether it is DPK or household kerosene. I think until that happens, we are not going to achieve a clear landing where kerosene is concerned. Secondly, we still have to come back to the fact that we must get our security agencies to assist us in terms of vandalism and sabotage. I know it is difficult.
Yes, but there are allegations that the institutionalised oil theft involved some of the staff of the IOCs and even some of ex-militants involved in the pipeline surveillance contracts, and when culprits were caught, orders came from Abuja to release them.
Well, I must be very honest with you I can’t answer that because I don’t have those answers. I heard the same thing as you have heard. But it is not a question that I can answer. I have not been given that information and so it is very difficult for me to guess who the individuals or the organisations are.
Emir Sanusi in a recent interview with the Financial Times after the release of the full PwC report brought up another figure of yet another $18.5 billion that is unaccounted for with reference to the kerosene subsidy issue. Kerosene subsidy has always remained controversial and yet the product is not available to Nigerians at the official price till now. What is it that can be done to stop the scam in this area?
Well, like I said before, it has to be deregulated. Take away the subsidy and let the market parameters of supply and demand come into play whether it is DPK or household kerosene. I think until that happens, we are not going to achieve a clear landing where kerosene is concerned. Secondly, we still have to come back to the fact that we must get our security agencies to assist us in terms of vandalism and sabotage. I know it is difficult.
I know the problem that they have as well and there is also the problem of funding. But you know we have product pipelines that transverse the majority of the country, but we can’t use them because great tranches are sabotaged or vandalised either all of the time or some of the time. What happens is that we still have to truck products from one part of Nigeria to another part of Nigeria, which is why the Petroleum Equalisation Fund still exists because it still has to pay bridging costs and we have transporters now having to add the cost of moving those products from one part of the country to another, which again causes the disparity in the cost of these products. And again, you have people who engage in unwholesome business practices and sell these products at higher prices than the official price. So I would say once more that we need to remove the subsidy on DPK, just as we need to remove the subsidy on PMS as well, which was why I pushed for complete deregulation on January 1, 2012. And I will say it again, Nigerians have to be prepared to go through a little period maybe of discomfort. But the market forces of demand and supply means that as some point there would be some sort of balance or equilibrium in terms of the cost viz-a-viz the supply. I think that is the only way we can get rid of the kind of corruption and scam in that area.
But Sanusi accused you of sustaining the subsidy despite the directive by the late President Umaru Yar’Adua that the subsidy on kerosene be stopped and he said that had you obeyed that directive, the alleged amount of unaccounted money, would not be missing?
Let me just make this very clear to Nigeria as a whole because this is an area of great pain for me. That Sanusi should say I sustained the subsidy is not true, when very clearly in 2009, the late President Yar’Adua gave a written directive to the late Minister of Petroleum Resources Alhaji Rilwan Lukman that he should remove the subsidy on DPK.
But Sanusi accused you of sustaining the subsidy despite the directive by the late President Umaru Yar’Adua that the subsidy on kerosene be stopped and he said that had you obeyed that directive, the alleged amount of unaccounted money, would not be missing?
Let me just make this very clear to Nigeria as a whole because this is an area of great pain for me. That Sanusi should say I sustained the subsidy is not true, when very clearly in 2009, the late President Yar’Adua gave a written directive to the late Minister of Petroleum Resources Alhaji Rilwan Lukman that he should remove the subsidy on DPK.
This subsidy on DPK was never removed by the late Minister of Petroleum Resources, whom I considered to be somebody that I regarded almost as a mentor. For reasons best known to late Alhaji Rilwan Lukman and the then economic team, the Finance Minister and others, they never implemented the directive to remove the subsidy. By law and the Petroleum Act, you must gazette such a removal for it to become law and of course it has to be published so that Nigerians would know that there has been a change in the price of the petroleum product. It is illegal to do it or to say you have done it, if you have not gazetted it.
Even before that, former President Goodluck Jonathan who was the vice-president at that time, had also clarified, even in a public media broadcast and in person as well, that the subsidy was never removed. So I sought clarification from him and he also made the clarification clear in a public media broadcast about a year and a half ago, that the subsidy was never removed. So at no time did I go against a president’s directive. It is not possible that I would have come in as a Minister of Petroleum in 2010 and found that kerosene subsidy no longer existed and that it had been gazetted and I would have suddenly upturned it. Government is a continuum and so it was not possible that I could have done that. So I feel very pained that Sanusi would make it sound like I was the one who went against late President Yar’Adua’s directive. I think this should clarify this issue once and for all.
It’s high time Nigerians got some insight into your personality, because there were lots of complaints that you are aloof, inaccessible and some even alleged that you were an absentee minister who spent more time at home than in the office.
It’s high time Nigerians got some insight into your personality, because there were lots of complaints that you are aloof, inaccessible and some even alleged that you were an absentee minister who spent more time at home than in the office.
I think that in terms of getting to know me, I understand why Nigerians would feel that I might have been somehow aloof. But I am not at all aloof, this is a misconception. When people meet me one-on-one, they always say they didn’t know I am so down to earth. But I think Nigerians must also understand that everybody has their own personality. I have never been a very social person. I have never been somebody who went to parties or from wedding to wedding. I have always been somebody who is quiet and apart from work, I focus on home or family. So I can spend an entire weekend in my house just reading books or with members of my family, grandchildren or whoever quietly. I am not a social butterfly. If I tell you that I have been in Abuja for eight years, like you said, the longest consecutive serving minister in Nigeria’s history, but if you drop me in Abuja, I probably would not be able to find my way say from Wuse to the Police Force Headquarters. The truth of the matter is that I went from my house to the office, from my office to the Presidential Villa or to official functions or any other meetings that had to do with my official capacity. Apart from that, I would be at home working.
In terms of the office, I must be very honest, I had a very erratic schedule for going to the office because from sometime in late 2009, I received constant threats to my life. They were reported even by the president to the Inspector General of Police (IGP) at one time or the other. I had various threats to my life for various reasons by various groups. There was also a period when I was warned severally by security because they were threats to the NNPC towers where my office was. In fact, on two occasions, somebody who appeared to be trying to do something near our major generator at NNPC was almost caught. A second time, there was another incident involving NNPC towers and I was variously warned by a number security of agencies to be very undefined about the way I went into NNPC so that nobody can have a predetermined schedule of how I went in and out of that building. But I don’t think there is anybody else within the Federal Executive Council who could say worked any harder than I did, because no matter where I was, my day started at 7.30 am on any given day and most of those who worked around me, including the GMDs and others, when they had to come to my house for 6 am or 7am meetings, would ask my colleagues how I was able to do that and I think it was just because of the fact that the weight and onus of the job was so heavy and it kept pushing me to be able to do these things. So it’s difficult to comprehend when Nigerians say such about me. I am not arrogant at all.
They needed to also understand the kind of sector that I was thrown into – the intrigues, manipulations and the depth of that sector and the fact that I am woman that was thrown into a masculine sector. NNPC is a completely masculine place and for the first time in history, I purposely appointed a woman as GED in NNPC. Never has it happened before and God knows when it would happen again. Even for me to have been appointed as the President of OPEC as a female, because they could have voted against it, in a completely male-dominated setting such as OPEC and yet, the Saudi Arabians supported me as well as the gas exporting countries. It was simply by hard work and they accepting that I knew the job and knew what I was doing.
So I think when you are weighed down by all these, it is very difficult sometimes to raise your head above water to start remembering that there should be niceties, to reach out across the polity or make yourself open for discussion, because you are really weighed down by work. It is this sector that provides the entire revenue for our economy to stand on. And in this same period of time, oil prices have been crashing, volumes have been down and of course we have been fighting all kinds of battles, political and otherwise in Nigeria for some time.
So when you are sitting here and trying to do all these – everyday you hear outside that $20 billion is missing under your watch – and even while you were trying to explain to Nigerians that such did not happen, you hear again about $18.5 billion. I must say coming from a company as transparent and accountable as Shell, at many times, it was very upsetting for me because I don’t stand out there shouting to Nigerians that I am not corrupt. Then you see all kinds of stupid stories that start surfacing as if I am sitting on a barrel of money or a house full of money. When people come into my house every day and they can see what is in the house. So at a certain time, it looked as if despite all you think you have done for the betterment of the sector and country, it seemed like a group of people had decided that you should be the target no matter what you said or did. Yet, I have a family, I have a husband, children, grandchildren, who everyday put on the internet and see all sorts of nonsense.
They look at me in prison garments, with handcuffs and all sorts of rubbish, and then Nigerians are saying I should be more open. You know there is a balance to everything in life. Whatever you put in, you get out. It goes both ways. It goes for the Nigerian polity and it goes for those of us in leadership. If you ask me today if I would do this all over again, I probably would have said yes, I might have been a lot more informed about certain things, I might have stayed away from certain people because of the benefit of hindsight, but I didn’t have that hindsight. When we came in, we came with the best of intentions for Nigeria and the people of Nigeria and I think in many respects, I achieved those intentions, with the Nigerian Content, the gas sector, even with being able to recreate the PIB, I can tell you that you can unbundle NNPC successfully if it is given the legislative backing. Did we make mistakes? There would always be mistakes. People would always make mistakes. Everybody make mistakes and there is no question about that. Have we learnt from our mistakes? Of course we have. But please do not say I stole $20 billion or $18.5 billion because I did not at any point in time. And if NNPC misappropriated funds or so, they have the entire explanation and more forensic audit should be done to determine how and why. But people should not make damaging accusations which have nothing to do with an individual. At no point did I steal from the Nigerian state.
In fact, the first mantra I had from the time I came in was that I will never touch anything that has to do with the Federation Account and I never did and I will take that to my grave. So I will suggest that this issue of $20 billion or $18 billion be dropped because that is the major problem I had with my job. I was accused of unsavoury things, but which were actually accusations against NNPC and the audit was deployed to clarify all these things. So let us deal with the issues. I have never gone around accusing people of doing this or that, I have always stuck with the issues even when I was the most abused minister, I was professional, I stuck to the issues and responded only to the issues.
In terms of aloofness, a typical example would be your refusal to honour the invitations of the House of Representatives when they tried to probe on the allegation that you spent N10 billion in leasing private jets. Why did you do that?
Well, I don’t know whether that issue is still in court. But the reason that I went to court was simple. First of all, nobody can lease a jet for N10 billion over a period. You can buy three jets for N10 billion. So that was obviously a nonsensical argument and I did not lease any jet. The NNPC leases jets and NNPC leased those jets to the best of my knowledge because at that point in time, they had no official planes. As an oil and gas ministry, we have purview over everything and it was actually very wrong that we had to borrow planes from these multinationals whom we were supposed to oversight. So over the years, I am talking about over the last 15 or 20 years, NNPC had either owned, leased or borrowed, both jets and helicopters. That was the case when I came in.
In terms of aloofness, a typical example would be your refusal to honour the invitations of the House of Representatives when they tried to probe on the allegation that you spent N10 billion in leasing private jets. Why did you do that?
Well, I don’t know whether that issue is still in court. But the reason that I went to court was simple. First of all, nobody can lease a jet for N10 billion over a period. You can buy three jets for N10 billion. So that was obviously a nonsensical argument and I did not lease any jet. The NNPC leases jets and NNPC leased those jets to the best of my knowledge because at that point in time, they had no official planes. As an oil and gas ministry, we have purview over everything and it was actually very wrong that we had to borrow planes from these multinationals whom we were supposed to oversight. So over the years, I am talking about over the last 15 or 20 years, NNPC had either owned, leased or borrowed, both jets and helicopters. That was the case when I came in.
Yes, we had a very old jet which nobody was going to touch and another jet had just been bought by late Alhaji Lukman just before he left, a Hawker. Unfortunately, the moment it came, because it had been sitting unused for over a year it became a problem. In fact, NNPC was advised to sell it because it was a problematic model and had sat unused for a long period. They were advised to sell it, but they didn’t sell it. Then after a year of its purchase, it crash-landed in Nsubi and we had to actually give it out for spare parts to the National Security Adviser’s office at the end of the day.
It was during this period that they leased the private jets for executive movement and operations in general, which we also used, as had always been the case. In that respect, the reason for the leasing and the amount involved are all available and I am sure the NNPC would be willing to give that information to whoever wants to look at them for public records. So again, it was a fabrication that came out from nowhere and was thrown at us as if suddenly out of the blues and for the first time in history, the NNPC was leasing jets or helicopters.
But it was alleged that it was for your personal use?
No, it was not for my personal use, it was for executive movement, which is has always been the case. I am saying just like the $20 billion, you find something, you throw it on the person to feel smart or to make it look as if the person is junketing all over the place or as if nobody had done that before in the annals of the NNPC. Of course we were not junketing all over the place. To be very honest, if they had never done that contract to lease the jet, we would have been hiring at a higher cost and which probably would have caused less of an issue. But to be frank, the lease that was put in place, to the best of my knowledge, was done with a company which even Shell and others have been using. So there was a known company with a very good track record and was being used in the industry by other multinationals.
But the other issue that you raised in terms of the National Assembly was not even because of the plane. The reason the plane was used in the legal brief was because that was the topical issue at the time. It was because in that year, the Minister of Petroleum had been summoned to the National Assembly, according to my officers, almost 200 times. And at this point, it became apparent that we were not going to be able to work or to perform our duties as a government agency anymore. So it was now becoming a situation whereby every week, they summoned the Minister of Petroleum, one of the parastatals or NNPC, and it was now becoming virtually impossible to actually perform our duties as an MDA. As such, at that point, our lawyers just felt we needed to stop it because it was becoming extremely disruptive. That was the basis on which the legal action that was taken, just to allow us some space to continue working.
Do you have any personal concerns about the new administration about how they might treat some of your actions as minister and is there any truth in the allegation that you have run away from the country or gone into exile?
Starting from the running away, I will say no. I didn’t run away from the country. I had said clearly to everybody a few months ago that I have been coming out regularly from early this year for treatments. In fact, everybody would remember that in March I had a major operation and I have been coming out for treatments periodically. It is a necessary treatment, so I have not run away at all. Having said that, the attacks have been so vicious and nasty.
Do you have any personal concerns about the new administration about how they might treat some of your actions as minister and is there any truth in the allegation that you have run away from the country or gone into exile?
Starting from the running away, I will say no. I didn’t run away from the country. I had said clearly to everybody a few months ago that I have been coming out regularly from early this year for treatments. In fact, everybody would remember that in March I had a major operation and I have been coming out for treatments periodically. It is a necessary treatment, so I have not run away at all. Having said that, the attacks have been so vicious and nasty.
Of course, when a new person comes into power, you want to watch and see how everything is playing out. My hope had been from the beginning that with some of our entities such as oil and gas, which is the fulcrum of our economy, having served the country in this manner and also having served as OPEC president and Gas Exporting Countries’ Forum president, as a woman, who put Nigeria in a historic place, my hope had been that long before now, we would have had a discussion with the new administration, so that we put forward some of the salient issues that we had concerns about in the sector. And of course, however they wish to take it forward is their brief. But we were never invited to do that and there was no discussion with us in that respect.
So those were my concerns and another concern is the kind of nastiness that has been thrown at my person, for what I can see as the sole reason why somebody got up and said $20 billion was missing or misappropriated; okay it is now $18.5 billion and all kinds of mud was thrown at you as if you picked up the $18.5 billion and walked out through the door. Essentially, these are my concerns. In a country like Nigeria, people are already allowing themselves to be swayed rightly or wrongly and believing what is clearly unbelievable. If this is an NNPC issue, please go and investigate it and make your report available, but please stop accusing people irrationally.
So what exactly is the nature of your illness; is it true that it is cancerous in nature?
That is a private matter that should not concern the public.
That is a private matter that should not concern the public.
Those sympathetic to you have blamed some of your woes on some very powerful and rich Nigerians who have spread what they termed malicious rumours. Why was there such gang-up against you by such powerful Nigerians?
Again, as I said earlier, I cannot really speak on conjecture. All I can say is that in truth, when we came in, there were those who felt that they were the lords of the manor, they owned the sector and they had a sense of entitlement about it. We felt on the other hand, that as much as possible, that we should open up the oil and gas sector to all Nigerians – anybody who had the wherewithal should come in. It should not be about a cabal handling and holding everybody in the oil and gas sector to ransom, and we felt it was a sector that many Nigerians could derive benefit from all the way across the spectrum, in large ways and small ways. In the past, it was a sector that was shrouded in a lot of misunderstanding, but which could be a major commercial revenue base for the country and which could be an area which if industrialised and linked to the real sector could create thousands of jobs. We believed we could actually start creating a lot of jobs, which had never hitherto happened in the oil and gas sector, because it is a highly capital intensive, technology-driven and insular sector. So I just felt I should go ahead and open the sector up and let Nigerians across the spectrum benefit from it and I think to a very large extent, we achieved that. Of course, if it continues at this pace with the divestments and the Nigerian Content Act, with new upstream, midstream and downstream investments, obviously, by 2020, a lot of Nigerians will be very much part of the fabric of the oil sector. But I think that those who felt they are the lords of the manor and they had a sense of entitlement and felt only they should sit atop the oil and gas sector, pushed back at us from the beginning, hounded us and are hounding me even as we speak. But if they derive pleasure by hounding me as an individual because I refused to bow to their whims and caprices and because I felt that we must open up the oil and gas sector to other Nigerians, then so be it. Sooner or later, as they say, what goes around comes around.
Again, as I said earlier, I cannot really speak on conjecture. All I can say is that in truth, when we came in, there were those who felt that they were the lords of the manor, they owned the sector and they had a sense of entitlement about it. We felt on the other hand, that as much as possible, that we should open up the oil and gas sector to all Nigerians – anybody who had the wherewithal should come in. It should not be about a cabal handling and holding everybody in the oil and gas sector to ransom, and we felt it was a sector that many Nigerians could derive benefit from all the way across the spectrum, in large ways and small ways. In the past, it was a sector that was shrouded in a lot of misunderstanding, but which could be a major commercial revenue base for the country and which could be an area which if industrialised and linked to the real sector could create thousands of jobs. We believed we could actually start creating a lot of jobs, which had never hitherto happened in the oil and gas sector, because it is a highly capital intensive, technology-driven and insular sector. So I just felt I should go ahead and open the sector up and let Nigerians across the spectrum benefit from it and I think to a very large extent, we achieved that. Of course, if it continues at this pace with the divestments and the Nigerian Content Act, with new upstream, midstream and downstream investments, obviously, by 2020, a lot of Nigerians will be very much part of the fabric of the oil sector. But I think that those who felt they are the lords of the manor and they had a sense of entitlement and felt only they should sit atop the oil and gas sector, pushed back at us from the beginning, hounded us and are hounding me even as we speak. But if they derive pleasure by hounding me as an individual because I refused to bow to their whims and caprices and because I felt that we must open up the oil and gas sector to other Nigerians, then so be it. Sooner or later, as they say, what goes around comes around.
Is there any truth in the allegation that you actually own Oil Mining Lease (OML) 29 and the Nembe trunk line and that Benny Peters and Igbo Sanomi of the Aiteo Group are just acting as your fronts?
I really wish I did, but not at all. But I must say this again and I find this very strange because OML 29, just like all the other divested Shell blocks, we gave all our support from the ministry during their acquisition. We gave our support to the first tranche of oil assets that were sold – those were OMLs 30, 40, 42 and 34. We gave these groups support and we were not involved in the commercial transactions because by law, we cannot be. Our role was simply to ensure that the indigenous operators who were going in to buy were actually treated fairly. We did that in the first divestment. Accordingly, under the second tranche, which included OML 29, since everyone had learnt their lessons, this set of transactions went quite seamlessly. All we had to do was at the end of the day when it finally came back to the ministry, was to append our signature.
I really wish I did, but not at all. But I must say this again and I find this very strange because OML 29, just like all the other divested Shell blocks, we gave all our support from the ministry during their acquisition. We gave our support to the first tranche of oil assets that were sold – those were OMLs 30, 40, 42 and 34. We gave these groups support and we were not involved in the commercial transactions because by law, we cannot be. Our role was simply to ensure that the indigenous operators who were going in to buy were actually treated fairly. We did that in the first divestment. Accordingly, under the second tranche, which included OML 29, since everyone had learnt their lessons, this set of transactions went quite seamlessly. All we had to do was at the end of the day when it finally came back to the ministry, was to append our signature.
Again, I think it is very unfortunate, because certain individuals, their names have always been linked to mine. But there is virtually nobody who at one time or the other had not come to me as minister for approvals. There are some people who came around more often than others, but we have been completely open in terms of giving support to indigenous operators in the sector. Perhaps, because these two people you mentioned happened to come from the Niger Delta, so their names were suddenly affixed to mine. But I know for a fact the number of forays that some of these people made to gather the requisite financial backing for these transactions. These were not small amounts of money. So those making these allegations should go and check the bank records because all of the operators/bidders got their monies from banking entities to acquire the assets from Shell. So I don’t know how I came into the issue. Everybody involved in these transactions came to us at one point or the other. In fact, on a number of occasions, they were not sure they would be able to raise the money.
These were Nigerians dealing with foreign multinationals and every step of the way, they would come and weep and tell us the problems they were facing. I recall those who acquired OML 29 (Peters and Sanomi), came to me weeping at a particular point because there were encountering challenges raising the money, but there was nothing we could do. But eventually, they overcame the hurdles and were able to finally make the payments. However, I could not go to a bank to ask for assistance for anybody, because I could not put up a surety for that person and it was not my business as a minister to do so. For anyone to raise over $2 billion to acquire a producing block from a foreign multinational was a major thing and for us, it was a proud moment to support Nigerian companies. And for supporting and encouraging them, we started hearing stories all over the place. But they need to go and ask the banks because they have all the records.
The Nigerian banks, the foreign banks and other financial entities that they moved with should be asked to open up their books so that they can look at all their papers because it is very clear how and where they got the funds to actually buy the assets, and I am sure many of them will be paying back to the banks in many years to come. Even at one point, I raised concerns that those assets were highly priced. But for them to have been able to raise the funding and acquire the assets, was actually something that Nigeria should be proud of.
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