Kachikwu, Name above the Oil Cabal

Dr. Ibe Kachikwu
At the
mention of the name, Ibe Kachikwu, there always appears to be the stimulation
of some kind of force that often sends jitters down the spine of evil doers in
the critical sector of the nation’s economy, the petroleum sector, where
Kachikwu, the Minister of State for Petroleum and Group Managing Director of
the Nigeria National Petroleum Corporation (NNPC), holds sway.

To say that
the NNPC has been a cash cow for society’s indolent, who had lived off the
nation free of charge and would never dream that the status quo changes, is
merely bouncing off a common knowledge. Not only has the place been run down
completely, it reeks of the kind of corruption that only an incorruptible and
intrinsically motivated individual like Kachikwu can expose and ultimately,
tame.
It was no
wonder, therefore, that the moment he was announced by President Muhammadu
Buhari as the GMD/CEO of NNPC, these NNPC rats and parasites knew there was
problem. Even more startled are people now identified as members of the cabal
that has hitherto held the oil sector by the jugular for many years, making
sure it did not live up to its billings. Thus, the choice of Kachikwu was
naturally, a thorn in the flesh for them and for many reasons.
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One, as a
system’s person, Kachikwu understands the inner workings of the parastatal and
of course, the degree of corruption that had been perpetrated where and most
likely, by whom even. Two, there was the question of capacity. Kachikwu has
both the attitudinal flare and academic aptitude, the outcome of which speaks
to his capacity in the handling of the NNPC. Three, he would not steal money
because he does not have reasons to. What this implies is that he would not
“play balls” with the establishmentarians, whose stock in trade is corruption.
But the sad
news is that the cabal had survived many governments in the country, including
even the Olusegun Obasanjo regime, which initiated the Economic and Financial
crimes Commission (EFCC). It, however, started to stutter, albeit erroneously
when it reckoned that the Buhari regime would maintain business as usual by
acceding to their antics of corruption by possibly replacing the head of that
office on the basis of their professional advice – someone who would come into
the system and be easy to initiate into their folds. But all this
extrapolations evaporated with the appointment of Kachikwu, a man of no small
means, who would have no reason to stoop to them for anything. That’s the good
news.
 
His
credentials alone are intimidating. Either in the academics or the oil
industry, Kachikwu is certainly not in the same class with those seeking to see
his back from that very office. From his early school to his tertiary
educations – both home and away – Kachikwu
 has done nothing but carved a niche
with stellar performance in all of these endeavours.
Talk about
his record of service, Kachikwu had as a private citizen done the nation proud.
With a career in the oil sector that spans different departments, he has no
doubt paid his dues. For instance, he was General Counsel/Legal Adviser, Texaco
Nigeria and Texaco Overseas Petroleum Co (1984 -1994); General
Counsel/Secretary, Mobil Producing Nigeria Unlimited (2001); Executive
Director, ExxonMobil Group of Companies (2003); Executive Vice Chairman/General
Counsel, ExxonMobil Companies in Nigeria and Oversight Counsel, ExxonMobil
Companies in Africa since 2009.
Wait a
minute: has anyone pondered why a man with such experience and excellent record
has suddenly become a thorn in the flesh of some people in the industry? A few
explanations will suffice. The anomalies in the oil sector, where Nigeria
derives its main strength and sustains its foreign reserves had defiled
virtually all solutions. It is in that same sector that billions of dollars
suddenly took flight, resulting both in sharp decrease in national revenue and
scarcity of all petroleum products, a situation beyond the capacity of the
previous government.
Again, has
anyone thought about who has been frustrating the passage of the Petroleum
Industry Bill (PIB) meant to introduce a regime of sanity in the operations of
the oil sector and also stabilise the oil subsidy regime? What with the
pipeline vandalism and theft of crude oil on high seas, which peaked in the
twilight of the last administration? Yet, the culprits made it to safety, while
the mastermind smiled to the banks.
But that’s
an era that was sure to come to an end and it just did with the emergence of
Kachikwu, who boasts over 30 years of experience in the oil sector. And so far,
he has not only demonstrated his resolve to rescue the NNPC and Nigeria’s oil
sector in general, he has proven within a few months of assuming office that
change is possible, regardless of the resistance being instigated by the oil
thieves and the cabal.
Thus, in
reforming the sector, one of the defining steps that Kachikwu had so far taken
includes the scrapping of the Crude Swap Deal. With this initiative, the nation
is sure to save about $1 billion by operating the Direct-Sale-Direct-Purchase
regime. Naturally, this was resisted as it did not go well with many in the
sector, to the extent that Kachikwu was invited by the House of Representatives
to come and defend the idea.
Another
major step taken was the Review of Deep Offshore Products Agreement. Kachikwu,
as part of the need to re-organise the NNPC, revisited the fiscal terms of the
existing production sharing contract entered into by the NNPC with some
international oil and gas companies in order to seek favourable benefits to
Nigeria based on the current and prevailing realities. That is a good move.
There is no doubt that knowing the prevailing culture before now, such an
agreement will be fraught with fraud and sharp practices. A timely review will
reveal some of this.
 
Also, to
curb oil theft, the parastatal under him has put up plans to start deploying
drones to monitor the inward and outward movement of oil vessels across the
nation’s territorial waters as well as pipeline vandalism.
The most
welcoming of these initiatives is the open book policy he announced recently.
Kachikwu had declared that there would be an open accounting policy that would
allow public scrutiny of NNPC books from time to time. The practice has become
a monthly tradition. NNPC’s financial and operational statements are now easily
available and accessible online and are no longer classified state secrets or
subject of speculation and controversy.
It didn’t
stop there. In August 2015, Kachikwu cancelled all contracts for delivery of
crude oil to refineries because they were unjustifiably expensive and
investigation had revealed that due process was not adhered. That singular
action was believed to have saved the country an average of $150 million
monthly. He also held the first recorded public competitive bid for the lifting
of the nation’s crude oil by the NNPC.
The field
was thrown open for competent industry players with track records of integrity
and financial strength to bid. From about 278 local and international companies
that submitted bids, only 21 with the most responsive bids got the contracts in
a process that was widely hailed as transparent. The same open bidding process
was applied to the coastal bid and the Offshore Processing Agreements (OPAs)
bid. Analogous to this is the regime of ethnic card, which he promised to end
in terms of appointment and promotion.
He didn’t
also stop there. There have been the personal examples too. Recall that during
the fuel scarcity towards the end of last year, Kachikwu, in order to eradicate
the long queues from fuel stations, personally deployed NNPC staff to gas
stations across the country to monitor the distribution system. That was novel
in the history of that office and parastatal.
He recently
also seized the influence of his to canvass for greater corporations amongst
Africa Oil Producers. He implored member countries of Africa Petroleum
Producers Association (APPA) to close ranks and bring their influence to bear
in the global oil and gas market. It was to this end that many groups and
countries like the US have been canvassing support for Kachikwu, knowing full
well that he has come, not only to represent change but also see it happen.
With a
presidential backing, Kachikwu has unbundled the NNPC into four different
enterprises namely – the upstream company, the downstream company, Midstream
Company, and the refining group holding company. The four units are to run
their operations independently.
In addition,
Kachikwu also identified ‘20 Fixes’ that are at varying stages of progress on
20 critical issues, which when fixed would help strengthen the NNPC. They
include the need to reduce and audit operational cost, restructure corporate
centre and staffing, renegotiate existing contracts, streamline subsidy
management, boost pipeline security, enhance transparency and accountability,
achieve zero tolerance for corruption, rebrand NNPC and unbundle PPMC.
Kachikwu has
since assuming office shown credible and enviable commitment towards ensuring
that the PIB, meant to provide the legal framework for the reform of the oil
and gas industry, is passed, providing statistics which indicate that the
country is losing an estimated $15 billion per annum due to the non-passage of
the bill and suggesting that it could be split and passed in phases.
Nigeria, no
doubt, is a leading regional player in the oil and gas industry and cannot
continue to operate based on its current low standards and expect the kind of
growth that is commensurate with others. This is why Kachikwu’s leadership
reforms require the support of all the stakeholders to completely extricate the
main source of the nation’s revenue from the claws of jaw-dropping cabal. It is
the responsibility of all to ensure that the nation’s oil resources are
expended in true and genuine national service and not merely to lubricate the
greedy yearnings of a few.

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