Michael Olorunfemi - Nigerian Oil and Gas: A Mixed Blessing?

NIGERIAN

OIL & GAS:

A MIXED BLESSING?

A Chronicle of NNPCs Unfulfilled Mission

BY

M. A. O LORUNFEMI

A KIN A DETUNJI

A DE O LAIYA

Published in Nigeria in 2014 by Kachifo Limited

Under its Prestige imprint

253 Herbert Macaulay Way

Yaba, Lagos, Nigeria

0807 736 4217

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Copyright MA Olorunfemi, Akin Adetunji, and Ade Olaiya 2014

The right of MA Olorunfemi, Akin Adetunji, and Ade Olaiya

to be identified as the authors of this work has been asserted

by them in accordance with the copyright laws.

A catalogue record for this book is available from

the National Library of Nigeria.

ISBN: 978-978-52842-5-6

All rights reserved.

No part of this publication may be reproduced, transmitted,

or stored in a retrieval system, in any form or by any means,

without permission in writing from the copyright holder.

Cover design and print layout: Akeem Ibrahim

E-book conversion: Ibukun Olowu Omojola

To our wives, Ebahi Aizoelegbe Olorunfemi, Abimbola Mosunmola Adetunji, and Abimbola Nihinlola Olaiya who have stood solidly by us all through the years, and whose patience
has only improved since our retirement.

To our children who must remember that we fought the good fight.

Contents

BPE Bureau for Public Enterprise

DPR Department of Petroleum Resources

ECN Electricity Corporation of Nigeria

IOCs International Oil Companies

IPP Independent Power Producer

NAPIMS National Petroleum Investment Management Services

IDSL Integrated Data Services Limited

NEPA National Electricity and Power Authority

NGC Nigerian Gas Company

NITEL Nigerian Telecommunications

NNOC Nigerian National Oil Company

NNPC Nigerian National Petroleum Corporation

NOLCHEM National Petroleum and Chemical Marketing Company

NPDC Nigerian Petroleum Development Company

NUPENG Nigerian Union of Petroleum and Natural Gas workers

OPEC Organisation of Petroleum Exporting Countries

OML Oil Mining Licence

OPL Oil Prospecting Licence

PEF Petroleum Equalisation Fund

PIB Petroleum Industry Bill

PPMC The Pipeline and Product Marketing Company

PSC Production Sharing Contract

PTDF Petroleum Technology Development Fund

Shell BP Shell British Petroleum

SAP Structural Adjustment Programme

SMR Skid Mounted Refineries

TAM Turn Around Maintenance

TCPC Technical Committee on Privatization and Commercialisation

Making a full list of the people who helped with the writing of this book will be impossible without mentioning the effects each of them had on us and the industry which provided us the opportunity to serve and gain experience. Undoubtedly, without these people, this book would have been much more difficult to write.

This acknowledgement section is more than a thank you to those who gave us their time, who agreed to be interviewed by three retirees. It is also an acknowledgement of the roles played in the construction of a dream, of a National Oil Industry.

We would like to start by thanking Chief FRA Marinho, first Chief Executive of the NNPC, whose persistence made the introduction of the omnibus legislation that regulated and codified the petroleum laws under decree 51 of 1969 possible. Our interactions with him have left us in no doubt about the power of his memory. Chief Marinho taught us the truth of collective responsibility; he would say of the first management corps, We are all guilty by association.

We acknowledge Chief Odoliyi Lolomari, one of the Foundation Engineers who opened the first office of the Directorate of Petroleum Resourcesthen the Petroleum Divisionin Port Harcourt and kept it open throughout the difficult Civil War period. This office became the nucleus of the NNPC Eastern Zone Operations today.

Engineer Joseph Jemine Akpieyi, a good colleague and great friend, who made himself available for our exhaustive interviews. JJ introduced the concept of independent marketing (which today has grown to make up almost 90% of local downstream sector).

We must make mention of our esteemed colleagues, senior and others, during our days in the oil and gas industry. Gentlemen such as, Sam Akpe, whose major initiative was introducing the concept of regulation of oil exploitation through conservation techniques and played a prominent role in the establishment of Bonny LNG; Engineer SA Kufeji, the pioneer downstream Engineer who took these operations from its pedestrian level of importation and distribution of products in tins to that of establishing standard Retail Outlets and Refineries; Mr. Aret Adams, the promoter of commercialised NNPC and subsequent first Group Managing Director; Ben Osuno, defender of the inspectorate policy and who occupied the position of OPEC Governor for many years.

We were immensely blessed to have worked with Administrators who, despite pressure from certain sectors, strove to maintain minimal interference with the smooth running of what was ostensibly designed to be a profit-making corporation. We must acknowledge the efforts of Chief Awoniyi, a great man who deserved the greatest credit as having been almost singlehandedly responsible for the creation of the NNPC, and who moved on immediately afterwards, content that he had done his part and others needed to proceed with the dream. We say thank you to Alhaji Shettima Ali Moguno, a conscientious political appointee who allowed the experts do their jobs, he was Nigerias first minister to OPEC. During Muhammadu Buharis stint as Federal Commissioner of Petroleum, and due to his disposition of deferring to the views of his professionals on technical issues, the NNPC climbed into a golden age. Alhaji Rilwanu Lukman, of blessed memory, recognised the need for commercialisation of the NNPC and initiated, several years after his service as Petroluem Minister, the PIB, when he was Special Adviser to the President. Professor Jubril Aminus quality was in his expressed confidence in technocrats and professionals. These and several others inspire in us the hope that like-minded administrators and representatives of the Nigerian people are out there and that they will keep the dream of a vibrant, independent National Oil Company alive and achievable.

Special mention is made here of Chief Meshack Otokiti Feyide, who was an inspiration to all of us, young professionals that we were in those days. He can be said to have singlehandedly built the fabric of the public sector of the oil industry. The esteem with which he is held by his erstwhile colleagues is illustrated by the NNPC Pensions Building in Victoria Island Lagos being named after him.

To Chief Philip Asiodu, our Super Perm Sec, we say a big thank you for agreeing to write the foreword to this book. Chief Asiodu was instrumental to the formulation of many key policies in the early years of government involvement in the oil and gas industry. He made a great effort in identifying product supply problems that caused scarcity and pushed the events that were supposed to finally address scarcity, like laying of product pipelines and the siting, and construction of refineries.

And to those who worked directly with us in the making of this book we say thank you. To our secretaries, Mrs. Dupe Ehimen and Kemi Ogunleye, who took copious notes and made sure we kept our appointments; to Sanya Oni, Niyi Osundina, and Dr. Okanlawon Adediji, who made sense of the scribbling of non-literary gentlemen, and to Dr. Eghosa Imasuen, our editor and publisher, our gratitude is too much for words to express.