NNPC (1)There may be no need to fret over the likely threat posed to the sale of Nigerian oil by the discovery of shale oil and gas by the United States (U.S.) and China.

This was the position of the Nigerian National Petroleum Corporation (NNPC) yesterday. The Group Managing Director of the corporation, Andrew Yakubu, was quoted as giving the assurance in South Korea at the World Energy Congress in Daegu.

Besides, there is uneasy quiet among stakeholders in the oil sector that the visit of the International Chair of Extractive Industries Transparency Initiative (EITI), Clare Short, to Nigeria was mismanaged.

The Guardian learnt yesterday in Abuja that the visit would have been used to reiterate the commitment of government to fighting corruption in the highly corrupt oil sector, discussing ways to reduce extreme poverty and promoting sustainable development which are the tripod on which the EITI stands.

This comes as indications have emerged that one in eight people in the world is hungry.

In a statement by the Acting Group General Manager, Group Public Affairs Division of the NNPC, Mrs. Tumini Green, Yakubu, who is leading a team of Nigeria’s oil and gas experts to the global energy meeting, was quoted as noting that the shale gas and oil revolution in America for now would not have a serious negative impact on the nation’s crude oil fortunes as earlier projected by some petroleum analysts.

His words: “No doubt the shale gas phenomenon poses a pushback on our oil and gas, but the good news is that as we speak, the impact is going to come a very long time from now because a close examination of the various discoveries of shale gas shows a huge misalignment between what was projected and the actualisation of most of the gas projects that would bring shale gas into full maturity.”

According to him, though the shale gas revolution is real, its availability in the global energy market is being hampered by high cost and other infrastructural challenges thus making conventional crude oil a cheaper energy source.

But while the NNPC takes comfort in this development, the corporation is moving to activate measures to ensure that the country is not caught unawares if shale gas achieves the projected global penetration.

“Once again, the good news in this regard is that the President, through the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has made it clear that the maximisation of our various energy resources is central to the reforms in the oil and gas industry. And back home, we have since channelled our energy to the development of petrochemicals, fertilisers and other gas-based industries that would maximise the utilisation of our gas resources. So far, our interactions and engagements with various global energy leaders in this congress have reassured us that we are moving in the right direction,” Yakubu said.

The congress, which has the central theme “Securing Tomorrow’s Energy Today,” is focused on the challenges posed by the globalisation of energy demand, how energy supplies can be protected against disruptions and how efforts to mitigate climate change affect access to future energy resources.

The NNPC boss has also dismissed insinuations that the recent spate of divestments from certain onshore oil blocks by some international oil companies (IOCs) may lead to crisis in the nation’s oil and gas industry.

He explained that the reported divestments are not only healthy for the oil and gas industry in Nigeria but would also go a long way in promoting effective indigenous participation in core upstream activities.

“These are not withdrawals in the real sense of withdrawals. The fact is that a number of these IOCs are moving into more challenging frontiers in the deep offshore and are leaving the onshore blocks which they consider less challenging,” he said.

The NNPC GMD noted that the major players that are divesting had actually been sitting on those acreages and had allowed them to go fallow for years without significant development.

“So, it is only fair for them to release these blocks so that others, especially the indigenous operators, can have the blocks and grow in the upstream business. This indeed is a good development and I think we are moving in the right direction,” he said.

The GMD hinted that the divestment would offer immense opportunities for the nation’s indigenous flagship upstream operator, the Nigerian Petroleum Development Company (NPDC), to grow its capacity, especially as it strives to meet the aggressive target of daily crude production of 250, 000 barrels by 2020.

According to a study by the United Nations’ Food and Agricultural Organisation (FAO), about 870 million people fall within a category that is defined as “a diet of fewer than 1,800 calories a day.”

Stakeholders said the visit of Short was hijacked and manipulated in favour of government against the people for which the EITI principles were introduced in Nigeria.

The immediate past Chairman of Nigeria Extractive Industries Transparency Initiative (NEITI), Prof. Assisi Asobie, said the visit would have been more beneficial to Nigeria if the team had visited the National Assembly and the Office of the Auditor- General of the Federation.

According to him, these two institutions are the most important organisations that can help to get the recommendations of NEITI reports implemented and not the Presidency.

He explained: “It is a pity that Short’s visit did not achieve its intended purpose. Not that the country loses everything as insinuated in some quarters, but her visit would have made more meaning if she had gone to interact with the relevant committees of the National Assembly to find out why the recommendations of the NEITI audit reports are not implemented. The same thing goes for the office of the Auditor-General of the Federation.    Since the audit reports started, most of the recommendations have not been implemented by the government. I know that the basic principles of EITI are to eradicate corruption, reduce poverty and promote sustainable development which should form the core message of EITI Chair everywhere she goes. But to come to Nigeria and talk about transformation agenda of government is missing the point. The EITI was formed because people from oil-producing countries and other mineral resources are not deriving the benefits of the products and the message must be to change the way things are now for the better.”

Asobie also stated that nothing had changed in Nigeria as far as the crusade of fighting corruption since 2008 was concerned as revealed by the Corruption Perception Index.

He submitted that Nigeria’s rating on corruption perception index rating was 2.7 over 10 in 2008 and remained the same figure in 2012 when it scored 27 over 100.

Asobie posited that the reality shown by the report was that there had been no progress in Nigeria in the last four years as far as fighting corruption was concerned.

Speaking along the same line, Short in her interaction with the media, urged Nigeria to go beyond the analysis of where oil money was going to demanding actions that would reform the sector.

Short commended Nigeria for being the best EITI-implementing country through NEITI.

She pointed out that if the global goal of eliminating extreme poverty by 2030 was to be achieved, then revenue arising from extractive industries must be better utilised.

According to her, issues such as the fuel subsidy regime in the country would have been better removed and replaced with family allowances that would allow income flow to the ordinary people rather than benefiting only the rich.

Her words: “To get the sort of transformation you are in favour of in Nigeria, you need analyses that get to the truth of where the money is going which is what a lot of NEITI reports are about. And then you need to demand reform and popularise it in villages and constituencies.

“For example, I would say it was very impressive, the campaign against getting rid of the subsidy, but I think if you analyse that subsidy, most people who benefit are wealthy people. You can see people felt threatened, it was not well done politically but just sitting there and reading my newspaper, I thought what should be done is a sort of family allowance that helps out poor people.

“So, we need to get people behind reforms that bring benefit to the people. Nigeria is doing well, the analysis has been done and it needs to be popularised and driven through”, she added.

Short noted that Nigeria was on the brink of a breakthrough in entrenching opening in the extractive industries if it could implement the recommendation contained in the audit reports of NEITI.

According to FAO, children are especially affected as hunger harms physical and cognitive development.

The Global Hunger Index, devised by the International Food Policy Research Institute, a think-tank based in Washington DC, tracks the progress in combating hunger and under-nourishment, which includes the quality as well as the quantity of a diet.

The index covers 120 developing countries that account for 84 per cent of the world’s population. It is composed of three equally weighted measures: the percentage of people that are under-nourished; the under-five population that are underweight; and the under-five mortality rate.

While the overall world index has decreased by 34 per cent since 1990, some 19 countries – with a total population of 1.6 billion – are classified as having “alarming” or “extremely alarming” levels of hunger.

Most are in Africa and Asia, where natural disasters and climate change make places there particularly vulnerable to food scarcity.


Information from The Guardian was used in this report.