Barry Morgan, writing on the proposed reforms to Nigeria’s oil industry in Upstream Online, manages to get in a wonderful snark at the end of his article:
Minister of State for Petroleum Resources Ibe Kachikwu, who doubles as Nigerian National Petroleum Corporation (NNPC) group managing director, will over the coming days lay out plans to split the state company into 30 standalone units before a proposed initial public offering in 2018. After four decades, the NNPC is clearly in a bit of a mess, haemorrhaging $1.3 billion last year alone.
Petroleum & Natural Gas Senior Staff Association of Nigeria general secretary Lumumba Okugbawa has hit out at the reform plan as “a display of arbitrariness”, that is riding roughshod over enabling laws that created the NNPC and trashing the long-delayed Petroleum Industry Bill.
Sounds like an effective strategy.
When it comes to the Nigerian oil industry, it is a useful rule of thumb that if the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) is complaining about something then that something is invariably good for the Nigerian oil industry and the majority of Nigerians.
So does NNPC need reforming? This article would suggest so:
Nigeria’s state-owned oil company has failed to pay the government $16bn (£11bn) in a suspected fraud, according to an official audit.
The Nigerian National Petroleum Corporation (NNPC) provided no explanation for the missing funds, the auditor general told MPs.
This finding by the auditor general, while shocking, is not a surprise.
Officials from the previous administration allegedly indulged in wholesale corruption where billions of dollars of oil funds simply disappeared.
At which point long-serving observers of Nigerian politics stifle a yawn and return to playing Minesweeper.
Nigeria’s oil reserves should have been blessing for Nigeria to be used to build infrastructure and invest in social services.
Instead, it has been a curse, a lubricant that has produced massive corruption and dysfunctional governments.
And, of course, an enormous source of wealth, privilege, and influence for the tiny number of Nigerians who happen to be PENGASSAN members at the expense of tens of millions of ordinary Nigerians.
I was reminded of PENGASSAN, and their role in expanding Nigeria’s disastrous local content laws, when I read this article on ships choosing to take the longer route around the Cape of Good Hope rather than transit through the Suez canal:
Shipping firms pay what amounts to several billion dollars every year to the Suez Canal Authority, an Egyptian state-owned entity, for the privilege of travelling via the canal.
However, more and more some ships are deciding not to take the Suez route. Instead, they are travelling around the Cape of Good Hope, right at the southern tip of Africa.
There are other costs, too. Rose George, author of Deep Sea and Foreign Going, was on board a ship using the Canal a few years ago. She notes that vessels must agree to taking on a Suez crew for the transit.
“[The Suez crew] seem to do nothing but listen to tinny radio and try to sell souvenirs,” says George, adding the ships often have to pay a cigarette ‘tax’.
“On each voyage, Suez costs a ship about £400 ($560) of cigarettes, as well as dozens of chocolate bars from the bond locker.”
Laziness and theft resulting from local content legislation? Who would have thunk it? Only I can’t help thinking the shipping companies are getting off lightly: if the idiots at PENGASSAN were running the canal, they’d insist on their own incompetent members taking the wheel and command of the ship itself right up to the home port where they would demand hotel accommodation for a week before being flown home with an excess baggage allowance of 150kg per person. And if they crashed into Gibraltar and sent the ship to the bottom, they’d demand a meeting with the company heads and, foaming at the mouth, bemoan their lack of training while ignoring the millions of dollars spent on just that.
Let’s hope Nigeria’s president Buhari takes to NNPC with a flamethrower before turning his sights on PENGASSAN.