A Review of the Nigerian Energy Industry

There are many distractions in oil sector – Gaius-Obaseki


Jackson Gaius-Obaseki

20 April 2014, Abuja – With over four and a half years at the helm of affairs as Group Managing Director, GMD, of the Nigerian National Petroleum Corporation, NNPC, Dr. Jackson Gaius-Obaseki, is on record as the man that has spent the longest time as GMD of the corporation. He quietly left office almost 11 years ago but still speaks and thinks pleasantly of the NNPC.

He speaks with This Day in his Benin City, Edo State, home few days ago on aspects of his time in office amongst other issues. Excerpts:

It is almost 11 years since you retired as the GMD of NNPC, what are some of the things that you would have expected to be happening in the industry at this time?

You would have noticed that since I left the office, I avoided granting interviews and one of the reasons is that I didn’t want to be judgmental. I think I came, I did what I had to do and then left posterity to pass the judgment; otherwise, naturally I would have had dreams and say this is how I see the industry in 2014. The question is: Is the government putting the required efforts in that direction? The answer will be yes, and then are they getting the cooperation of everybody as I got? The answer will be doubtful because I see that we seem to be spending so much time on distractions than focusing on implementing the objectives.

I don’t know if you would recall that when we came, there was a lull and the industry was to some extent reluctant in investing because we were losing credibility, we were not contributing to development and we couldn’t build reserves and so we set targets then and say this is where we should be.

I see the struggle is there but the truth is, are we where I thought we should have been by now? In all its ramifications, the answer might be no, but in some areas where we will have more Nigerian in participation, that is one of the dreams and has it come true, the answer is yes.

Would you be specific on your doubts about cooperation in the sector?

When I left or retired, I recall that I was gulfing somewhere far from here and the Financial Times called and sought my opinion on the PIB as it were today and I said well, the energy, both physical and intellectual, the credibility and the vision required to move that large corporation was getting difficult to find. And so if it can be re-organised without losing the national focus, yes, I was for it. But I hear that the Petroleum Industry Bill for so many years now they’ve been trying to pass it; we have all sorts of review committees but up till now we still haven’t done it. But it is my belief that if we did what we ought to have done, we are going to have proper governance structure, systems in place and the dos and don’ts would be very well spelt out, then we wouldn’t spend time like I told you focusing on distractions.

What then do you think should be done?

Pass the bill and then there should be proper leadership.

What do you think could be stalling its passage?
I have no idea.

The GMD and GEDs of NNPC seem  to spend more time attending invitations by the National Assembly, you had your share of that but are these not contributing to the distractions you talked about?

The lawmakers have to do their job, they have a responsibility; an oversight on the industry and you can’t deny them that. When I was the GMD, what I did with my team then was to educate the public, put information within their reach because there was a lot of suspicion and a lot of it borne out of ignorance of what happened and what I did as a decision then was to throw everything into the public domain. Every three months we tell the people what we did even up to how much we spent and why we spent that much, and my conviction then, which I sold to my colleagues, was that we had a responsibility to manage but the public had a right of information and that was what we did at the time.

What is happening now is not different from what happened at my time, don’t forget there was a time I was given 101 questions to answer but the difference, I must say God bless President Obasanjo, he allowed me to be and so I was in charge, I had been trained and this country invested a lot of money in training me and I had to put all that I had at the disposal of the country, that is the change. President Obasanjo was my minister but I also had to cultivate him and also educate him because, if you have a minister you can be denied approval because he doesn’t understand you and so whoever is at the top must know that it is a challenge you have to face, until you start getting people who have the training we have as ministers, you just must cope with it.

Some will open up to you like the president did at that time and I said no problem sir, I need you to understand what I am doing but you know he was a fast learner and it didn’t take time he became an expert in it.

Following from this, there is an obvious disconnect between the managers of the sector and the legislators, what should be done then?

Cooperation; they should cooperate and accept that they have a job to do. The managers should accept that the legislators have a job to do and the legislators also should respect the management that they have a job to do because they are set up by law but that doesn’t mean that they can veer off as if nobody else matters.

So, I had a good time but to the public and outsiders, they thought I was having a tough and difficult time, no. I just saw them and they were willing to learn but unfortunately, the changes have been too much. The legislators I worked with, I don’t think you have any of them in there anymore and so that knowledge is also lost. But you have to work with whoever is there like they say, “Begin again”.

But the legislators seem to do more in oversight than seeking to enthrone proper systems for the industry with the passage of the PIB, should this be the case?

I am trained in the business of oil and gas and not in the business of making law and so I don’t think I have the competence to answer that question.

There is this ongoing crisis of trust in use of private jets between the legislators and managers of the sector, in your time as GMD NNPC, were you availed the use of a jet and how did you manage it?

I don’t understand what you mean when you say jet; I had a fleet of aircraft in my time. I had a twin otter, I had a Dornier and I had a HS. They were key requirements for my operations. I give you an instance where we had fire in Kaduna refinery and I lost two of my staff in that unfortunate incident. I wasn’t going to look for Arik or Aero, I jumped into the jet and in a matter of minutes I was in Kaduna and stayed there to manage the fire fighting and take necessary decisions on sight only to report back to the president then who was my minister. And as soon as I boarded the aircraft, I called the president to intimate him, so we have always had this.

I had a jet but there are times when the jet was not available and I take the Dornier which was supposed to be the lowest but it is operational demands and this was not peculiar to NNPC because all the IOCs have theirs.

This is what I am saying, that these are distractions. You can’t face the main business, if somebody understands the workings of the NNPC, then he will know that jet is not a luxury, it is a requirement for the operations of the corporation.

Would you provide an update on the BrassLNG project?

My first statement is that LNG (Liquefied Natural Gas) is not an overnight project; if you look at its complications, both technical and management and then the investment profile, you will expect that this is not an overnight business that you will do.

The good side of Brass is that we are on course. There had been delays and there were times when Brass was completely ignored and then, of course, when we came back to fix it, we had to panel-beat and of course we completed the panel-beating and thought we were ready to go, then the COP exit came in. Nobody ever envisaged that it will take this long but again we are at the end of it now because the last meeting we had last week, we were supposed to complete that this month and once we finish that, I expect that all the stakeholders will engage and we will go on full speed.

Are you anticipating a replacement for COP?

That is not the priority now; the priority is for us to just start going, we don’t want to stop. But certainly that will come and the other three shareholders will continue to manage the COP shares; they will decide as we go down whether they want to go it alone or they want somebody to come in. But the complications that came in with the COP involvement and exit will be avoided in the new dispensation and I am sure that the next AGM will certainly speak more on this; Nigeria needs the project and the market needs it.


– Chineme, Okafor, This Day

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