By Engr. Godwin Asiobe
“Privatization”
has been a fashionably recurring word in Nigeria over the last couple of
decades. If it was meant to be the “be all and end all” to Nigeria’s painfully
stunted growth, it has certainly not proved to be the “magic wand” that the country
has been waiting for. Although the subject here is on the Downstream sector of
the Oil and Gas Industry, it will be most beneficial for us to look at the
issue as it affects all facets of activities in the Country.
The recent
action of the Federal Government in NATIONALISING three well-known banks is
instructive! The publicized information on the revelations at the Senate
Committee looking into the “Privatization” exercise is enough for the
conclusion that the programme has not, exactly, been a success, to be reached,
without any fears of contradiction.
It is
well-taken that the main objective of “privatizing” government enterprises is
to give them to “private” hands with minimal government involvement in their
management. The three refineries in the country are owned and operated by the
Nigerian National Petroleum Corporation (NNPC). The employees of NNPC are
“private” individuals. It can, therefore, be argued that the refineries are
already in “private” hands! What we should be talking about is HOW TO UNTIE
THOSE HANDS!
NNPC has
produced some of the most competent refiners in the world. The staff in NNPC’s
refineries are some of the best that can be found anywhere on earth. What the Nigerian Society of Chemical
Engineers (NSChE) should be doing is to evolve impregnable
strategies with which these highly capable and experienced hands can be ALLOWED
to run the plants.
From whatever
angle it is viewed, it is safe to say that “privatizing” the refineries, will
be handing them over to some political and well-connected “money bags” at
embarrassingly low prices. There is no guaranty that they will run the plants
any better. The whole country, except the lucky buyers, looses! This is not
something that NSChE should be seen to be advocating.
In 2002 or
there about, some 18 (eighteen) licences were issued by the Department of
Petroleum Resources (DPR) to mostly “private” companies, individuals, and even
some state governments. Not one refinery has been built in the decade since the
licences were issued. Some of us who were consultants to some of these bodies
discovered that some of them just wanted an easy way to “crude oil lifting”,
with no intention to build any refinery! “Non-deregulation” and the “low” price
of petrol (motor spirit), cannot be said to be responsible for this! How can
this be reconciled with the orchestrated clamour for “privatisation”?
Some of us
have been to other OPEC countries like Libya. A litre of motor spirit (petrol)
costs the equivalent of N10 (ten naira). The refineries there are working very
well and they are not owned by “private” individuals. So it still all boils
down to the fundamentally flawed system of the Nigerian project, which NSChE
should be helping to change. “Privatisation” is not the answer, obviously.
A case can be
made for the Pipelines and Products Marketing Company Limited to be “uplifted
and revamped”, but it should remain as it is-a fully owned subsidiary of NNPC.
If NNPC is to be at par with the Petronas and Petrobras of this world, it must
retain its “cash cow”-- PPMC.
The Eleme
Petrochemicals Company Limited (EPCL) is being touted as the best proof of the
success of the “Privatisation” programme. EPCL may have been able to remain
productive under Indorama. THIS WOULD BE BECAUSE THEIR HANDS ARE NOT TIED.
However, the true story of the “privatisation” should actually be a source
embarrassment to the country.
Who are the
“real owners” of EPCL, today?? How could a complex worth over $1bn be sold to a
company that had no experience in running petrochemical plants, for about $200
million? How come the NNPC appointed Managing Director was airlifted to Aso
Rock in the middle of the night to sign the handover papers? How come Indorama
does not say that for the first year of their operations, they “begged” NNPC to
allow some of their staff to TRAIN them?
Why is it that
Indorama does not tell Nigerians how many Indians are working at EPCL?? They
never fail to tell the world that they have provided jobs for over a thousand
Nigerians. What is the ratio of Nigerians to Indians at EPCL, five years after
the complex was “gifted” to them? Does anybody care about the fact that EPCL staff
who were trained in the high technology of operating an Ethylene Plant, and
other petrochemical processes, were scattered all over NNPC.
The expensive
training and experience have been lost by the country. The talk about the EPCL
model is interesting. But why was the Bonny LNG model that was agreed on,
dumped to give Indorama seventy-five percent of EPCL? Who are those actually
benefitting from this rather “sweet” arrangement? Why have Nigerians never been
told that under the current Group Managing Director, as the Managing Director
(of EPCL), EPCL was self-sustaining and making a very healthy profit and that
in order to “facilitate” the murky take-over of EPCL, he was suddenly and
unceremoniously transferred to another directorate in NNPC?
Can Nigeria
say today that EPCL, with its 900 hectares of land is, truly, a Nigerian complex?
Is it not better to say that it is an Indian complex being run by Indians for
some faceless people? Is the token ten percent purportedly given to Rivers
State not a sweetener designed to hoodwink the country? EPCL was projected to
be developed in three phases. Only the first phase has been completed with all
the success being claimed by Indorama. We only read of the plans to “expand” it
in the newspapers. Five years is enough time for work to have been completed on
any genuine expansion.
The above, on
EPCL, is not exhaustive! If this is a beneficial “privatisation” for Nigeria,
then most people would recommend that the country should thread most carefully
in this “privatisation” hype.
NSChE’s
initiative on the Study Group is commendable. It is suggested that NSChE should
be actively involved in finding the modalities to make NNPC a major
International Oil Company like ARAMCO, ADNOC, Sonatrach etc.
This piece
first appeared in October 2011. It was written by the author as a memo to the Nigerian Society of Chemical
Engineers (NSChE) when the NSChE sought the views of its fellows on the
privatisation of the country’s refineries. The author
sent it in response to the article, The Fuel Subsidy Conundrum (a two-part
series published here:
Engr. Godwin Asiobe (not real name) is a retired staff of
the Nigerian National Petroleum Corporation and former director at the Eleme
Petrochemicals Company Limited (EPCL) which used to be a subsidiary of the NNPC
until it was "privatised"
(read: "dashed/gifted" to some faceless people!) some years back.
Engr. Asiobe had the privilege of being involved in the EPCL
Project from concept to engineering, construction and commissioning until
August, 1995, when the first product, Polypropylene, from the Complex was
produced.
“Nigerians should ask that the "true owners" of
EPCL be publicly, indentified. The Indians who have replaced Nigerians in the
running of the Complex, are fronting for some people. I know that, in spite of
the hype, Nigerian man-power is not being effectively developed in the critical
Petrochemical Sector of the Oil Industry”, says Engr. Asiobe.
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