The Wikileaks saga of last year helped revealed some of the evil forces at play in frustrating genuine reform of the structure and fiscal relationships in the Nigeria’s oil and gas sector. The leak revealed a confession of a top executive of Shell Petroleum Development Company of Nigeria (SPDC) as saying his company dispatched some of its top staff to various Nigerian government agencies to sabotage and ensure the government’s efforts at reforming the oil and gas sector was frustrated. And from what’s on ground already, Shell is fully having its way.


Is it not interesting that the Presidency which hitherto had never shown any sense of urgency in any issue is trying to make the preparation and passage of a new draft Petroleum Industry Bill (PIB) a taskforce matter? If President Goodluck Jonathan had demonstrated similar interest and commitment in the previous draft, it wouldn’t have pended for more than four years until it finally died at the floor of the 6th National Assembly. So where did the suddenly bustle come from?

It would be recalled that the crux of the opposition to the original PIB by the foreign oil operators was that it will create a harsh environment that would materially change the economics of the existing and new operations particularly in the deepwater regions. Undoubtedly, the tax changes would instigate an increased government take from an average of 73% to a projected 82% under the original PIB terms. This calculation was derived on projections of a mid-size deepwater oil field with production of around 50 million barrels a year and oil price of US$75bbl. Therefore, the groundswell of opposition to the PIB is not farfetched since the existing arrangements have put the foreign oil companies in advantage positions of reaping greater share from higher production and current high oil prices.

Nigerian fiscal terms are currently lenient compared to its peers, particularly the countries with the same geological character. For instance, Libya has 93% government take and UAE Abu Dhabi is on an average of 94%. Recent trends in global fiscal terms especially in this era of rising oil prices have built-in mechanisms of increased government share in windfall prices through increased royalty/taxes and linkages of royalty/tax rates to prevailing prices to ensure automatic adjustment of government share to price increases. But it’s not so in the arrangements.

Now, this is the real picture of the covert maneuvering against the government’s intentions as entailed in the spirit of the original PIB:

There are two most critical government offices whose influences and decisions would heavily or rather exclusively determine how the new draft PIB is packaged: the Department of Petroleum Resources (DPR) and the Office of the Minister of Petroleum Resources. Whatever goes into the new draft and comes out as the final copy to be endorsed as law depends on these two offices attached to the Presidency.
Also, the single most critical anticipated outcome of the oil and gas sector reform initiative is the emergence of an autonomous and powerful policing agency- the Petroleum Inspectorate, which would not only make sure things are done the right way, but insist the interest of the nation is not short-circuited by the foreign operators and their Nigerian collaborators.

Now, these two agencies (offices), DPR and Office of the Minister of Petroleum, have been hijacked by the Anglo-Dutch oil concern, Shell Petroleum Development Company.

This is it: The appointment of Diezani Allison-Madueke as the minister of Petroleum Resources was a historic event. She came into the Yar’adua government in 2007 from her position as a Director of Shell Petroleum Development Company (SPDC). She is a Shell girl having grown up with her parents who were employees of Shell.

Allison-Madueke studied architecture in Washington D.C. before returning to Nigeria in 1992 to work for her father’s old employer -Shell. Over the next 15 years she rose to become Shell’s first female director in Nigeria, before she was appointed minister in 2007.

Now this Shell girl (woman) whose first name Diezani means “look before you leap” in her local izon dialect is the alpha and omega in the new draft PIB  which means to a great extent, she determines or rather influences what goes into it. She also will have to oversee its implementation when passed into law by the National Assembly at least until the end of the life of this administration.

And as if this was not enough, recently also, President Goodluck Ebele Jonathan approved the appointment of Mr. Osten Oluyemisi Olorunsola as the new Director of the Department of Petroleum Resources (DPR) which is expected to metamorphose into the policing agency- The Petroleum Inspectorate.
Before the appointment, Olorunsola was the Vice-President (Gas) at Shell Upstream International. He has served as Strategic Business Adviser to the Minister of Petroleum Resources (2008-2009); Manager, Opportunity Delivery and Studies Centre, Shell; Reserves and Technology Manager (Africa), Shell (E&P) International, Netherlands; Business Interface Manager (Russia), Shell Technology (E&P) International, Netherlands; and Petroleum Engineering Manager, Shell Nigeria. He is an indigene of Kogi State where the present NNPC group managing director, Austin Oniwon also hails from.

Interestingly, the Presidency did not give any reason for bringing another Shell director to take over the DPR at this critical time of the dirty politics of oil and gas sector reforms.

Is the picture clearer now? A company, Shell, at the forefront of the protest and threats against the original PIB and the entire spirit of reform in the nation’s oil and gas sector is now covertly dictating what goes into the new draft.

It is outright nonsense for anybody to claim that the appointment of the new DPR boss was based on merit. Agreed he is well qualified by experience and as a Nigerian also, but is it only in Shell we have well-qualified Nigerians to head the DPR and other sensitive oil and gas monitoring and regulating agencies? There are scores of equally well-qualified Nigerians all over the place including the current DPR system, NNPC and even in indigenous private oil and gas businesses.

And then if we must poach from from the IOCs, must it be Shell when we already have a Shell woman as our minister of Petroleum? Are there no Nigerians in Dubri and Consolidated Oil amongst others? Are there no Nigerians in Nigerian Agip, TotalFinaElf, ExxonMobil, and Chevron amongst others? You see the deceit?
The crucial question is: why should a Shell director, a top management staff, who is doing very well in the organization and with very bright chances of heading Shell Nigeria and even Shell worldwide scheme to grab the office of a civil servant (the DPR director) with no special attraction minus bribe and corruption?

Whosoever does not know should know now that the loyalty of any Shell staff especially those who rose to top senior positions whether retired or still active in service is first to the company before the country-Nigeria.

This is an outright challenge to the civil society groups and all stakeholders particularly the media to show genuine interest in what provisions are included in this new document. We should all wake up and constructively engage (even confront if necessary) the National Assembly on this matter that borders heavily on Nigeria’s strategic economic interest. I don talk my own o!
IFEANYI IZEZE, ABUJA ([email protected]; 08033043009)

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