19 January 2015, Lagos – A former minister of Petroleum Resources, some past group managing directors and directors of the Nigerian National Petroleum Corporation have questioned the country’s continuing membership of the Organisation of Petroleum Exporting Countries.
They spoke at a symposium to mark the 80th birthday of a two-time Managing Director of the NNPC, Chief Festus Marinho, in Lagos.
The theme of the symposium was: ‘Nigeria’s energy evolution – A glimpse at the future’, and had a former Minister of State (Petroleum) and a former Minister of Foreign Affairs, Mr. Odein Ajumogobia, as a keynote speaker.
Ajumogobia queried the country’s continuing membership of OPEC, saying the body had not protected the Nigerian economic interest.
The former minister said, “Let me in conclusion prophesy that well before any significant volume of Nigerian oil production would have to be shut in on account that the production cost per barrel is more than the price per barrel, this ongoing price and market share war would have abated and OPEC would have reverted to its adapted role of working with large non-OPEC producers like Russia, Norway, Mexico and Oman to balance the market and stabilise the price in the interest of oil producers and consumers alike.
“This conclusion, however, makes me seriously question the benefit of our continuing membership of the organisation in the absence of any protection or leverage whatsoever within the organisation.”
He said there seemed to be the desire of individual countries in OPEC, particularly Saudi Arabia and the Arab states, to protect and maintain their market share.
“Unfortunately, Nigeria with zero excess capacity, is a mere onlooker at the mercy of the two biggest oil producers in the world, namely the United States and Saudi Arabia,” Ajumogobia said.
A former Group Executive Director of the NNPC, and Chairman, Transmission Company of Nigeria, Mr. Ibrahim Waziri, also lamented the country’s continuing membership of OPEC, saying, “We are inconsequential and our continuous membership of OPEC is destructive and not necessary.
“Nigeria should not be afraid to experiment as a nation. OPEC membership has not worked; so, we have to change.”
Waziri, who noted that the government had played a crucial role in taking the oil industry to an enviable height, called on the Federal Government to withdraw from the industry.
He said, “The role of government in the industry has reached a point of diminishing returns. It is now a clog in the wheel of progress for the industry.
“Why do we need a state company? Why do we need the NNPC, for example? It is essentially an agent of government for revenue collection such as taxes and royalties. This organisation has not been doing well. There has been a lot of value destruction rather than value addition.”
He noted that it was not that the NNPC chief executives were incompetent but that they were being distracted.
Also speaking, the Managing Director and Chief Executive Officer, Seplat Petroleum, Mr. Austin Avuru, who compared the NNPC to its counterparts in OPEC nations, said, “Is the NNPC really adding value to the industry today? I think the NNPC is a destroyer of value in the industry.
“We should accept that it is time to look inwards and accept the truth. Government and its agencies must withdraw from the industry and restrict themselves to proper revenue collection and management of the revenue for the interest of this and future generations,” Avuru said.
A former Group Managing Director, NNPC, Chief Funsho Kupolokun, said the corporation should leave the refineries so that they could be privatised.
Another former GMD of the NNPC, Lawrence Amu, said it was the government that needed to understand what it wanted from the NNPC, adding, “The NNPC GMDs don’t act on their own, they are people that are controlled by politicians.”
A former Group Managing Director, NNPC, Chief Chambers Oyibo, said the frequent changes of the GMDs would affect policy formulation and implementation.
“The NNPC GMDs are just office boys. But that’s not what it is in other OPEC countries,” he said.
The Founder, Centre for Values in Leadership, Prof. Pat Utomi said, “We have reached a structural shift in the oil industry and it might not return to business quite as usual.”
– The Punch