A Review of the Nigerian Energy Industry

UNEP Report on Ogoni: ‘I’ve been very disappointed’ – Senator Abbe

06 Februry 2012, Sweetcrude, Abuja – Senator Magnus Ngei Abbe, Chairman of the Senate Committee on Petroleum (downstream) is the erstwhile Secretary to the Rivers state government, a one-time commissioner of information and member of the state house of assembly. To say his wealth of experience can only add value to the 7th Senate will be stating the facts as is. In this interview with Hector Igbikiowubo, Editor, Sweetcrude, he speaks on a wide range of issues including the ongoing probe of the subsidy regime in the downstream petroleum subsector, the PIB and the UNEP Report on Ogoni and the impact of oil spills. He laments the perceived insensitivity of government personnel regarding oil spill in the Niger Delta, noting that ‘I am very, very disappointed’.


Senator Magnus Abbe, we have witnessed some measure of furore regarding the removal of petroleum subsidy or otherwise. Can you bring us up to speed on the work of your committee? The impression out there is that the work of the committee may have been overtaken by events, so we would like to know where you are at this moment and where you intend to go from here.

First let me thank you for your interest in the affairs of our country and the work you have been doing with this magazine looking at the oil and gas industry. It is not true that the work of the work of the committee has been overtaken by events. I’ve heard people say that after all the EFCC is already investigating, the subsidy issue has been resolved, whatever, whatever not. But the truth of the matter is that the EFCC looking into the allegations doesn’t in any way affect the work of the committee. At the time we started the investigation we had actually invited the EFCC to be part of the process so that whatever information that is made available to the committee would also be made available to them because we believed that the Nigerian people would like to see a forensic examination of some of these issues and some people didn’t think that the Senate has capacity to do that.  So that doesn’t affect the work of the committee. The resolution between the federal government and organised labour actually means that subsidy is still in place and so any suggestion or contribution that can be made to make the management of the subsidy scheme more transparent, more accountable and more organised or cost realistic would actually be in the interest of the Nigerian people and the Nigerian economy. This actually makes the work of the committee even more relevant than it was at the beginning.

So where are we at the moment with the probe and how soon do you expect to round up your investigation?

Well actually, were we are now is that we still have a few issues we want to resolve with the PPPRA and then we also want to go on some site visits to see some of the facilities of the PPMC and more importantly, we also want to talk with some of the companies that are involved with the subsidy and this is for two reasons – we want to give them an opportunity to respond to issues in the public domain and the other is to ask some of the questions that have been agitating the minds of members of the committee. We are aware that the house of representatives is carrying out a concurrent investigation, but the Senate would still go ahead and conclude its own activity.

Do we expect at the conclusion of your investigation to see any legislation or resolutions regarding the way and manner the industry is governed especially as it affects subsidy or no subsidy?

There are two issues involved in this subsidy or no subsidy and as a person I want to clarify my own position. I am not for subsidy or no subsidy, I am for deregulation of the downstream sector and those are not exactly the same thing.  Deregulation of course connotes that there will be no subsidy but absence of subsidy does not necessarily mean deregulation. So what I would like to see is a total deregulation of the downstream sector  in which case government processes that are involved in the sector are not discretionary and so cannot be subject to abuse and then those participating in the sector would do so in an open and visibly transparent manner. In other words you would not have collusion, price fixing and all the kind of dirty things that can actually make the absence of subsidy a burden on the citizens. So, deregulation is what I would like to see in the downstream sector. If the government actually has funds and they want to use those funds to support the industry or the people within the industry, there are ways that such contributions can be made so that it doesn’t distort the market and does not allow investments and investor participation. Those are my personal views. Talking on the broader corporate and national level, definitely there would be some form of legislation in the oil industry. The Petroleum Industry Bill presupposes this and of course would create deregulation by the very nature of what it is intended to do. Whatever activities that are ongoing now in terms of this probe and what it is intended to do would definitely impact on how the PIB would be viewed by the Senate and how it would be worked on. Some of those suggestions and whatever may come out of this may be reflected in the PIB. Or even some of the perspectives that the public has brought to bear since the debate became a raging national inferno would also be reflected in the PIB. So I think everybody is very conscious that there would be an impactful legislation that would come out of this entire exercise.

Talking about the PIB, recently, the minister came up with some committees including the one that includes former Senators and members of the House or Representatives. The impression in the public domain is that the committee has been mandated to work hand in glove with serving Senators and those in the House of Representatives.  Has there been any overture on the part of the ministry to get your committee to work with whatever committees that have been set up to drive passage of the PIB.

There is a legislative process and what I think the executive is trying to do is that they are trying to collate their own views and thought and to harmonize though from the industry.  I think that that’s what the committee is about. When the Bill is submitted to the national assembly, there is a process for legislation and within that process there is also room for public input into whatever law the national assembly is trying to make, there will be public hearings, committee sittings on the PIB and at that point, any member of the public, including any groups or committees that have an interest would of course be allowed to make their contribution. But I think that both the executive and members of the committee know the procedure of how legislation is worked on and I don’t think that there is any kind of committee that is set up to affect the way legislation is made, I don’t think that is the intention and I don’t think that would be the outcome. Definitely, whatever work they are doing at the executive level, once it is submitted to the national assembly, the procedures and rules of the national assembly would take its course and in the course of that Bill, whatever committee or interest that has something to do with the Bill would have an opportunity to make an input. As former legislators themselves, I am sure they understand that process and everybody would respect that process.

The concern is that the PIB has been in the works (permit the expression) forever, and like you’ve rightly pointed out, at least I came away with that from your submission, teh PIB is important. I want to believe that the executive is looking for ways and means to expedite passage of the Bill. Do we expect to see a commensurate disposition towardfs expedience on the part of the legislature towards passage of this Bill?

The legislature has always worked conscious of its obligations to the Nigerian people and I am sure as you have seen in the 7th Senate, anything that is important to the people of this country is taken seriously here. The PIB would be treated with the seriousness it deserves because it is a fundamental law as far as the oil and gas industry is concerned and everybody understands that the oil and gas industry is the bedrock of the Nigerian economy. In any serious society you use your strength and your base to propel yourself forward. Oil and gas is our strength and anything that has to do with it has to be taken seriously by any Nigerian because that is what we survive on. But having said that, you must understand that this is a very controversial law because it affects so much that is ongoing in the industry. But Nigeria in my opinion cannot afford the luxury of dilly dallying on the subject of the PIB because like I was saying this morning, oil is an international business, it’s not a local business and in the oil industry, people plan things, they do not carry on the way we do here – they love to be clear as to what the rules are, they like to do things in an organised and systemic manner such that the results are predictable. So when you create  so much uncertainty in an international industry like the oil industry by saying you are going to change the rules and people don’t know what the rules would be, it would affect investments in the industry because people don’t know what the rules are, if there would be PIB or not, they want to know how it would affect their investments and how it would not. It is important to the country that we bring some kind of closure to the issue of reform in the petroleum industry, closure in the sense that, if there would be reform what is the reform? It has to be understood and clearly defined. If there is no law and there is no reform, let that also be known and clearly understood that the rules remain as they are so that our international partners can participate in the industry. I believe that on that basis the national assembly should be geared very seriously because it is something that affects how people relate with the oil and gas industry.  This is the corner stone of our economy.

Let us look at another critical aspect of the PIB that has generated a lot of concern. You would recall that the communities had asked for inclusion of 10 per cent that should accrue to them. You are from the Niger Delta, a very important part of the are and today you are a distinguished Senator.  Incidentally, you superintend a committee directly related to the sector. Are we to expect any particular disposition towards protection of the communities from you?

I don’t think protecting the communities is a Niger Delta thing. When we had a crisisin the area and people were calling it a Niger Delta thing, I said to them, it is a Nigerian problem and part of the fundamental challenge of this country is that we need to begin to deal with each other on the basis of truth because unless and until we do that it would be very difficult for us to move forward. It would be very difficult for us to generate the kind of passion and the kind of commitment that we need to take this country to where it should be. People keep talking about Nigeria as a very rich country but I have said and I want to say it again, Nigeria is a very poor country, very, very poor country.  Nigeria is rich in potential but you can’t eat potential. For potential to become edible you have to translate it by action and part of that process of transforming our potential into wealth that you can actually access is that there must be some clear basis of equity in what we do. Today in our communities, if you go there you would be shocked at what is going on. People don’t see any relations with the oil companies as regards their interest, so they are breaking pipelines, they are pouring oil on the ground, they refine their own oil all in a bid to extract some value. And this is because this whole idea that the fund from oil is being mismanaged has eaten deep into the consciousness of our communities. I think that part of a solution that works for everybody is that like every other person that has a solution in his backyard, you must give them something. There is no argument you would make that can take away from the fact that the communities must be given something. Part of what I think the PIB would achieve is that when it clearly sets out the interests of these communities, it releases the pressure on the Nigerian system and on the oil companies to actually do their own thing and gives the communities an opportunity to take their destiny in their hands so that if tomorrow, there is no more oil, they don’t look at anybody and say when there was oil you people came here and treated us anyhow. They also are accountable to themselves. I think that that provision was well intentioned, it was well intended; it would actually help the oil industry because it would release a lot of the tension that exists in the industry and enable the industry to actually operate at maximum value.

Can we take a look at the UNEP Report and the way and manner it’s been managed by the Nigerian state. What are your expectations of the Nigerian government especially given the way and manner it’s been handled so far?

In fact I must say that I’ve been very disappointed by the way and manner it has been handled. If you read the UNEP Report, there is no responsible government that would see that scientifically these are the findings and these are the dangers that your people are facing, there is absolutely no visible response from the government. A committee was set up headed by the minister of petroleum resources but as I speak to you, that committee has never gone to Ogoni land, never! As I speak with you, that committee has never spoken with me, never! And I am a Senator representing that senatorial district, they have not seen any of the things mentioned in the UNEP Report, and yet, a report has been submitted on the implementation of the UNEP Report. How do you implement a report without talking to the people? How are you going to deal with the environment without talking to the people who live in it and explaining to them that this is what we are going to do and how we are going to do it or even seeing what is being talked about. The way we do things in this country sometimes baffles me and it just shows that a lot of times our public officers don’t understand what it means to be a public servant. Because as a public servant, you serve, you can’t be bigger than people you serve and that is part of the tragedy of this country, if not, in what other part of the world can this kind of thing happen? This UNEP Report was submitted how many months ago…, and the other day when we were dealing with the budget I said it in plenary that in Brazil there has been an oil spillage and the Brazilian government has demanded something. We will still be here pouring over this report and the Brazilian spillage would be settled because their government is serious. To put it mildly I am disappointed with the way and manner this issue is being handled. And the UNEP Report is not just about Ogoni, there are issues in the report that deals with the way we handle spillages, that deal with the way we manage environmental hazards of oil exploration in the Niger delta, that deals with even the capacity of the government agency to respond to the situations that arise out of these activities and I expected that the government would have been stung into taking very, very visible, drastic and positive action to affect not only how the issues of environmental degradation in Ogoni is resolved, but even how this business is conducted so that similar situations brewing all over the place are controlled for the benefit of the future. But I haven’t seen that response yet. I don’t want to talk about it anymore because if I do, I would say things that I should not say.

Given the circumstance and your current station, are we to expect the Senate to look at this aspect of operations of the international oil companies to ensure that the kind of spillage that has caused this level of environmental degradation in Ogoniland and parts of the Niger Delta is checked. Are we to expect that legislation would be included in…?

The problem of Nigeria is not legislation, the rules are there, the rules are not enforced and teh officers who should enforce the rules have no interest in the rules. How can you be dealing with environmental issues and the person who is in charge of environmental issues is sitting in Abuja. Is his house in the place we are talking about? Has he been there, does he even go there? So when you are dealing with things like this, you just wonder. That’s why we keep talking about restructuring this country into an effective unit that actually delivers something to the citizens. The state in its present form cannot and I want to say this without fear of contradiction – Nigeria in its present form cannot deliver on the expectations of the citizenry. Look at the issue of security, whatever reform you like, make, except you have state police forces, you have people in the states that are living in these places and living with the people who have their own instruments for dealing with situations that arises in their local areas, how would you achieve security? Where in a federation does only one government fund security? It’s impossible, how can you have three hundred and sixty something, thousand policemen to a population of over 160 million, what type of reform are you going to make to that? There are basic truths that need to be told in this country, there are basic obvious things that we are doing wrongly. If you have been on a road that is leading nowhere, why can’t you re-assess yourself. If you have tried this form of centralized security and it is clear that it cannot deliver, , it is not delivering and it is not programmed to deliver, why don’t you try something else, why are we afraid of change and tracking new routes? When you talk about it they say no, the governors would use the police to arrest people. If a governor wants to arrest somebody now is there anything stopping him from arresting the person he wants to arrest? Is the governor not subject to laws of the land? If he does something that is illegal, shouldn’t we have a provision in the law that allows him to be dealt with even after he has left office? Should we, because we are afraid of what could happen subject our children and communities to this kind of insecurity? Is that cure not more deadly than the disease that you are afraid of?  Sometimes I get very upset with the way we do things around here and I think that except we have enough courage for Nigerians to come out and say exactly what is wrong and how it can be corrected, we would just be wasting our time.

But the point is that like I said earlier on, the Senate, the 7th national assembly is not powerless in view of our current realities. So if the executive is not able to initiate fundamental restructuring, can’t it be initiated by the 7th national assembly?

I am not the 7th national assembly, the views I am expressing here are those of Senator Magnus Abbe. I am one out of 109. I am not the 7th national assembly and the senate is one arm of a bi-cameral legislature. The whole concept of making fundamental change to the way we operate is not something that any one person can do, the executive can’t do it alone, the national assembly cannot do it alone. Everybody in Nigeria has to be conscious that there is the need to do something differently and to change the way we look at things and how we deal with them. What I can do as a serving Senator is to use my platform as a Senator to sell that message and to sell that consciousness and I’ve been doing that. Even the Senate on its own cannot restructure Nigeria. Nigerians – governors, Mr. President, Houses of Assembly, Chiefs, market women, everybody must understand that we need to do things differently and that these are some of the things that we are facing and we can change. When you say I am not powerless, what power do I have to restructure Nigeria? The power I have is the one I am using now, I have a platform on which I can sell these ideas and I have been selling them and people are buying into it, the truth cannot hide. In any case, like I say to people, everything has its time and when the time for something has come, it doesn’t need a Goliath to come and do it. We need to focus on the practicalities of what needs to be done and we need to get it done fast before it’s too late.

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    I beg hon senator abbe crate a job vacancy for me. My 08068760191

    • Interesting write up. Mr. President should unarsetdnd the concept of leadership & responsibility before taking the position. And for those who sees fault only in the insult should better examine themselves bcos the president insulted us first by given us a clueless leadership. Prayers only can’t solve our problems in the country we need to act with courage.

  • Aws

    many have said this and that but looking idnarwly u have not lead and unit or group in ur whole life. My grand mother say many people dance great on their chair sitting, but can realy dance standing. Noise makers. When ur president u would understand.