*Say Kachikwu action’s within law, as Minister apologises for non-consultation
11 March 2016, Sweetcrude, Abuja – In what appeared like a quick reversal from its position from the previous day, the National Assembly on Thursday threw its weight behind the ongoing restructuring of Nigerian National Petroleum Corporation, NNPC, announced by the Minister of State for Petroleum Resources, Ibe Kachikwu, saying the move was within the law setting up NNPC.
At a meeting with the Joint House Committees on Petroleum (Upstream and Downstream) over the matter, Kachikwu apologised for taking the action without consulting the parliament but explained that the NNPC Act was not being breached as the corporation is being restructured internally.
The minister added that the NNPC is not being unbundled, but being restructured to inject life into some of the key sectors in the NNPC that are not performing efficiently.
Kachikwu stressed that he was misquoted by the press with regards to the actual meaning of the words he used to explain the reform.
According to him, there are several staff who are dormant in the corporation, adding that restructuring is to make them more productive.
Kachikwu had appeared before the National Assembly Joint Committee on Petroleum Resources (Upstream, Downstream) and Gas to explain the rationale behind the restructuring exercise.
At the Senate, after answering questions from the committee, Kachikwu was invited into a closed-door session by the committee which lasted for almost one hour. The committee emerged from the meeting to announce that his action was in good faith. It, however, regretted that Kachikwu did not consult it before embarking on the restructuring exercise.
Kachikwu had told the committee that restructuring the corporation was necessary for its effort to offset the $5.2 billion that it is currently owing major oil companies. He also said it would reduce its current N30 billion monthly losses that it records.
He also said the restructuring was meant to enhance the productivity of its subsidiaries and make them more effective and efficient.
The minister said, “I must apologise that we didn’t take some senate leadership along the path of this restructuring, but if you look at the draft of the Petroleum Industry Bill (PIB) sent to us for our input, you will discover that the restructuring was within the suggestion we made.
“Having said that, I must take responsibility for not carrying out the necessary consultation as we should have done.”
A member of the committee, Senator Sola Adeyeye, said the minister would have run foul of the law if he had attempted to unbundle NNPC as it would have contravened Cap 23 (6) 1D of the Act that established the agency.
Briefing journalists after the closed session, Chairman, of the Joint Committee, Senator Tayo Alasoadura, described the interactive session with the minister as promising.
He said the three committees were convinced that his action was legal and would promote efficiency in NNPC, generate more revenue and guarantee the availability of the product.
Alasoadura said, “We have a very useful discussion with the minister. He clarified the issue that he was not unbundling NNPC because it is an entity created by an Act of the National Assembly and nobody can touch it unless he comes back to the National Assembly for amendments.
“Having looked at what he did and the presentation he made to us and having considered the welfare of its staff of NNPC and those working in the subsidiaries that were affected by the reorganisation done in the sector, we found out that the staff would not be shortchanged, nor deprived of his employment.
“We also found out that he had not contravened the law because we were worried that he might be acting against the law but having looked at the law with him, we found out that he did not contravene the law.
“We also told him that he ought to have done more consultation with the National Assembly for which he apologized and he said that henceforth, more consultations will be done. We feel that he is working in the best interest of Nigeria.
The Chairman charged “all Nigerians to support him so that we can get out of the mess in which we have found ourselves in this country today. One good thing today is that the price of fuel is going up and if we don’t do the reorganisation when we are in trouble, it may be more difficult for us to do anything when the price goes up.”
He added that “We will continue to pray that the price of oil will be going up and Nigeria will be better. What the minister has done is the internal reorganisation of NNPC. From the figure given to us by the NNPC, the organisation is making about N30bn loss every month, if we continue like that, there is no time we are going to get out of the hole which we found ourselves.
“With the gradual reorganisation that the minister has been doing before, the loss of the NNPC as of last month was only $3 billion. He is already assuring us that by July 2016, that we would have gotten to a level that NNPC will not be making any loss any longer.
“The only way to do it is to put all hands on the plough. Let everybody work for his pay. Let there be no fat cow that will just suck without contributing anything.”
In his contribution, acting Chairman, Senate Committee on Petroleum Resources (Downstream), Senator Jibrin Buru, noted the most important thing was that the Senate was convinced that no law was contravened.
According to him, “We are satisfied with the explanation by the minister that no part of the NNPC Act was contravened in the process of bringing about this restructuring but the only thing is the lack of consultation between the NNPC, ministry of petroleum resources and the National Assembly.
“We brought that to the table and he said we are going to have a new beginning as consultation will always be there when this exercise would be carried out.”
In the House of Representatives, the lawmakers expressed their support for any action aimed at making the corporation for more efficient and profitable.
They, however, insisted that any re-organisation or restructuring, whether internal or otherwise, must be executed through an amendment to the Act establishing the NNPC.
The House also insisted that any amendment has to include the establishment of a Petroleum Inspectorate Directorate as contained in the Act, which is not part of the current restructuring exercise.
Chairman of the House Committee on Media and Public Affairs, Hon. Abdulrazak Namdas briefing journalists said the House already reached out to the presidency on the need to adhere to the constitution.
“The speaker has made calls to the president on three different occasions, asking the president to at least send an Executive Bill…They had their discussions, but we have not seen the bill,” he said.
Namdas added that the House, as part of its legislative agenda, would urgently pass any amendment to such bill, due to its importance to the national economy.
“We appreciate that it is a good idea to make the NNPC a profit-making organisation, but we insist due process must be followed. If they had brought an Executive Bill, this problem would not happen. After all, we are not fighting it, we are just saying the right thing must be done,” he added.
Namdas added that even if the changes or restructuring are internal, as stated by the NNPC, it still has to be done through the legislature.
The committee is expected to submit its report to the House next Tuesday.