Ibe Kachikwu, MD NNP and Minister of state for Petroleum. Photo/Getty
At the mention of the name, Ibe Kachikwu, there always appears to be the stimulation of some kind of force that often sends jitters down the spine of evil doers in the critical sector of the nation’s economy, the petroleum sector, where Kachikwu, the Minister of State for Petroleum and Group Managing Director of the Nigeria National Petroleum Corporation (NNPC), holds sway.
To say that the NNPC has been a cash cow for society’s indolent, who had lived off the nation free of charge and would never dream that the status quo changes, is merely bouncing off a common knowledge. Not only has the place been run down completely, it reeks of the kind of corruption that only an incorruptible and intrinsically motivated individual like Kachikwu can expose and ultimately, tame.
It was no wonder, therefore, that the moment he was announced by President Muhammadu Buhari as the GMD/CEO of NNPC, these NNPC rats and parasites knew there was problem. Even more startled are people now identified as members of the cabal that has hitherto held the oil sector by the jugular for many years, making sure it did not live up to its billings. Thus, the choice of Kachikwu was naturally, a thorn in the flesh for them and for many reasons.
One, as a system’s person, Kachikwu understands the inner workings of the parastatal and of course, the degree of corruption that had been perpetrated where and most likely, by whom even. Two, there was the question of capacity. Kachikwu has both the attitudinal flare and academic aptitude, the outcome of which speaks to his capacity in the handling of the NNPC. Three, he would not steal money because he does not have reasons to. What this implies is that he would not “play balls” with the establishmentarians, whose stock in trade is corruption.
But the sad news is that the cabal had survived many governments in the country, including even the Olusegun Obasanjo regime, which initiated the Economic and Financial crimes Commission (EFCC). It, however, started to stutter, albeit erroneously when it reckoned that the Buhari regime would maintain business as usual by acceding to their antics of corruption by possibly replacing the head of that office on the basis of their professional advice – someone who would come into the system and be easy to initiate into their folds. But all this extrapolations evaporated with the appointment of Kachikwu, a man of no small means, who would have no reason to stoop to them for anything. That’s the good news.
His credentials alone are intimidating. Either in the academics or the oil industry, Kachikwu is certainly not in the same class with those seeking to see his back from that very office. From his early school to his tertiary educations – both home and away – Kachikwu has done nothing but carved a niche with stellar performance in all of these endeavours.
Talk about his record of service, Kachikwu had as a private citizen done the nation proud. With a career in the oil sector that spans different departments, he has no doubt paid his dues. For instance, he was General Counsel/Legal Adviser, Texaco Nigeria and Texaco Overseas Petroleum Co (1984 -1994); General Counsel/Secretary, Mobil Producing Nigeria Unlimited (2001); Executive Director, ExxonMobil Group of Companies (2003); Executive Vice Chairman/General Counsel, ExxonMobil Companies in Nigeria and Oversight Counsel, ExxonMobil Companies in Africa since 2009.
Wait a minute: has anyone pondered why a man with such experience and excellent record has suddenly become a thorn in the flesh of some people in the industry? A few explanations will suffice. The anomalies in the oil sector, where Nigeria derives its main strength and sustains its foreign reserves had defiled virtually all solutions. It is in that same sector that billions of dollars suddenly took flight, resulting both in sharp decrease in national revenue and scarcity of all petroleum products, a situation beyond the capacity of the previous government.
Again, has anyone thought about who has been frustrating the passage of the Petroleum Industry Bill (PIB) meant to introduce a regime of sanity in the operations of the oil sector and also stabilise the oil subsidy regime? What with the pipeline vandalism and theft of crude oil on high seas, which peaked in the twilight of the last administration? Yet, the culprits made it to safety, while the mastermind smiled to the banks.
But that’s an era that was sure to come to an end and it just did with the emergence of Kachikwu, who boasts over 30 years of experience in the oil sector. And so far, he has not only demonstrated his resolve to rescue the NNPC and Nigeria’s oil sector in general, he has proven within a few months of assuming office that change is possible, regardless of the resistance being instigated by the oil thieves and the cabal.
Thus, in reforming the sector, one of the defining steps that Kachikwu had so far taken includes the scrapping of the Crude Swap Deal. With this initiative, the nation is sure to save about $1 billion by operating the Direct-Sale-Direct-Purchase regime. Naturally, this was resisted as it did not go well with many in the sector, to the extent that Kachikwu was invited by the House of Representatives to come and defend the idea.
Another major step taken was the Review of Deep Offshore Products Agreement. Kachikwu, as part of the need to re-organise the NNPC, revisited the fiscal terms of the existing production sharing contract entered into by the NNPC with some international oil and gas companies in order to seek favourable benefits to Nigeria based on the current and prevailing realities. That is a good move. There is no doubt that knowing the prevailing culture before now, such an agreement will be fraught with fraud and sharp practices. A timely review will reveal some of this.
Also, to curb oil theft, the parastatal under him has put up plans to start deploying drones to monitor the inward and outward movement of oil vessels across the nation’s territorial waters as well as pipeline vandalism.
The most welcoming of these initiatives is the open book policy he announced recently. Kachikwu had declared that there would be an open accounting policy that would allow public scrutiny of NNPC books from time to time. The practice has become a monthly tradition. NNPC’s financial and operational statements are now easily available and accessible online and are no longer classified state secrets or subject of speculation and controversy.
It didn’t stop there. In August 2015, Kachikwu cancelled all contracts for delivery of crude oil to refineries because they were unjustifiably expensive and investigation had revealed that due process was not adhered. That singular action was believed to have saved the country an average of $150 million monthly. He also held the first recorded public competitive bid for the lifting of the nation’s crude oil by the NNPC.
The field was thrown open for competent industry players with track records of integrity and financial strength to bid. From about 278 local and international companies that submitted bids, only 21 with the most responsive bids got the contracts in a process that was widely hailed as transparent. The same open bidding process was applied to the coastal bid and the Offshore Processing Agreements (OPAs) bid. Analogous to this is the regime of ethnic card, which he promised to end in terms of appointment and promotion.
He didn’t also stop there. There have been the personal examples too. Recall that during the fuel scarcity towards the end of last year, Kachikwu, in order to eradicate the long queues from fuel stations, personally deployed NNPC staff to gas stations across the country to monitor the distribution system. That was novel in the history of that office and parastatal.
Kachikwu and President Buhari during his inauguration as a minister
He recently also seized the influence of his to canvass for greater corporations amongst Africa Oil Producers. He implored member countries of Africa Petroleum Producers Association (APPA) to close ranks and bring their influence to bear in the global oil and gas market. It was to this end that many groups and countries like the US have been canvassing support for Kachikwu, knowing full well that he has come, not only to represent change but also see it happen.
With a presidential backing, Kachikwu has unbundled the NNPC into four different enterprises namely – the upstream company, the downstream company, Midstream Company, and the refining group holding company. The four units are to run their operations independently.
In addition, Kachikwu also identified ‘20 Fixes’ that are at varying stages of progress on 20 critical issues, which when fixed would help strengthen the NNPC. They include the need to reduce and audit operational cost, restructure corporate centre and staffing, renegotiate existing contracts, streamline subsidy management, boost pipeline security, enhance transparency and accountability, achieve zero tolerance for corruption, rebrand NNPC and unbundle PPMC.
Kachikwu has since assuming office shown credible and enviable commitment towards ensuring that the PIB, meant to provide the legal framework for the reform of the oil and gas industry, is passed, providing statistics which indicate that the country is losing an estimated $15 billion per annum due to the non-passage of the bill and suggesting that it could be split and passed in phases.
ADVERTISEMENT
No comments:
Post a Comment