Monday, October 21, 2019
Banner Top

At the 11th Oil Trading and Logistics Expo (OTL) which was held in Lagos, Chairman of the opening ceremony and former Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr. Jackson Gaius Obaseki, admonished politicians which include the legislators to allow the oil industry market to run. Refinery and distribution must be seen as thriving business. Concerning the Nigerian refineries, Obaseki made it known that in 1999, when he assumed office as the GMD of NNPC, he discovered a contract in place that gave the exclusive right to a company to take all the intermediate products in Port Harcourt refinery. To give effect to that, a pipeline was built from the jetty into the refinery and evacuation of petroleum products was being carried out. The former GMD revealed that the import of decision is that the cracking mechanism was never to work if that company was a surviving business. He adopted the policy that if “there are no markets for stolen goods, those who did the stealing might be discouraged from continuing”. Therefore, the contract was terminated. He noted that powerful people were behind the scene but as the GMD, ultimate power resides on him, hence the contract was terminated.

Subsequently, a negotiating meeting was scheduled in Port Harcourt to influence the decision but as a professional, Obaseki did not accede to the continuity of the contract in spite the huge resources invested in the venture as claimed by the contractor. He made it known that the problem in the petroleum sector in Nigeria is self-inflicted. In terms of human resources, both serving and retired, there is no organization in the sub-region that can be compared to the NNPC. But political interference has brought backwardness to the running of the oil industry, hence “the politicians should play politics, but they should allow the business to run”. He emphasized that in the downstream, when it comes to distribution, there were horrendous challenges in the sub region. He urged the downstream operators to do proper business because they are not inferior to their upstream counterparts. He pointed out that during his tenure as GMD, he joined the distribution market and the NNPC mega station in the central business district of Lagos recovered investment in 18 months because it was a volume business and efficiently should take the center stage. He pleaded with players of the industry to allow the system to work.

Nonetheless, on the issue of deregulation, Obaseki made it known that in 2001, the only way to allow the system to run is to serve the consumers and run it as a business concern. The government should provide minimum wage and all other comfort but the business must run well. During his tenure as GMD NNPC endeavored to deregulate, the country was shut down for three days after massive destruction through protest. He advocated that the industry should run as a market, but “it is therefore disheartening to see what happened when start talking about the subsidy scandal and I never imagined in my life that it will happen, but it did happen, but am happy that we are out of it”.

Obaseki warned that too much pressure should not be put on the Dangote refinery to provide everything for the country. Nigerians must be careful in comparing the distribution of power sector with the experience in the communications industry. Operators in the communication sector were interested and understood the business by taking loans from the bank without relying on government. They came into the business with an alternative and make it vibrant. Operators in the oil industry should not be interested in the shares they will get but rather those who are interested in the downstream should invest in the petroleum distribution business. He extolled those operators in the downstream who took advantage of his policy to build storage tanks without depending on the government to supply products without storage facilities. He stated clearly that “whether it is modular refinery, be it the Dangote refinery, whatever it is, until you run it as a business, don’t look at fraudulent ways making quick money”. There should be an enhanced single market for distribution in the downstream industry. He appreciated the efforts of the downstream operators and investors for looking at challenges and proffering solutions towards running a proper business while also encouraging operators not to relent their efforts until the industry gets to its required height.

 

 

Brent Crude Oil

WTI Crude Oil

Advertisement

img advertisement

Advertisement

img advertisement

Newsletter