Kachikwu forgot his magic stick

Abraham Ogbodo

Abraham Ogbodo

My outing two Sundays ago was titled: Kachikwu And Official Sophistry. It was my candid submission after observing Dr. IbeKachikwu, the Minister of State for Petroleum Resources and Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) for 10 months. After reading me, one of my ardent followers and a brother, Martins Okpalefe sent a text to add his views, specifically to defend Kachikwu against some of my assertions.

But just 24 hours after, Dr Kachikwu was on air again delivering another piece of sophistry. He said it was cheaper to import fuel for domestic consumption than to refine for same purpose. My worries returned immediately. If importation is preferred, why has there been so much noise about the massive expenditure and the administrative wizardry of Kachikwu to return the four refineries to production mode?

Now, after beating about the bush for 10 months, Kachikwu accepted only last week that he is not a magician and that it would take magic to even solve the current scarcity of petrol in the country. “One of the trainings I did not receive is that of a magician…” he told journalists after taking leaders of NUPENG and PENGASSAN for a meeting with President Muhammadu Buhari on the continued scarcity.

So, he, Kachikwu didn’t know he was not a magician when he was talking big like one and giving definite timelines, in weeks and months, for the turn-around of processes and institutions that took decades to disintegrate. In addressing the issues of the industry since coming on board last year, at no time had Kachickwu spoken like a lawyer or even anoil technocrat who understood the extent of rot in the system. He was always sounding like a voodoo practitioner that could circumvent scientific principles and force results from nowhere.

His narrative had followed a magic pattern. Something like this: Refineries will work at full capacity all year round; pipelines will be protected from vandals using drones; the very best hands shall take charge at all posts at the NNPC; the NNPC itself shall go offshore in search of business the same way Total, EXXON-Mobil, Chevron, Petro bras, Statoil, Agip and other International Oil Companies (IOCs) are in Nigeria for businesses; the NNPC shall be made profitable again; subsidy cabal shall be dismantled; products scarcity shall end and so on.

But the magic narrative effectively ended last Wednesday. And now in a reality mode, Kachikwu told Nigerians to start learning how to live with fuel scarcity for at least another two months. He explained that the major product importers, who were previously yanked off the procurement process to allow the NNPC a monopolistic advantage and also save good money for government from subsidy payments, are fully back in the mix. In fact, he said, these importers have been restored to do the job without the meddlesomeness of the NNPC, which is returning to a new role of creating strategic reserves for the nation.

You see, magicians do not easily lose traction. The man started talking big again like a man with a magic wand, even as he struggled to explain his ordinariness to his listeners last week. What is strategic reserve? Is it a thing to be decreed or developed? Where are the midstream storage facilities that can sustain peacefully that idea in a country where domestic consumption is almost always ahead of all the mechanisms at ensuring steady supply?

If truth be told, the infrastructures for an arrangement to bridge supply shortfalls do not exist as of now and it will take magic to achieve same in the short run. Put differently, the combined capacity of private tank farms and NNPC storage facilities, which is less able to sustain a daily domestic consumption of 40 million litres, cannot offer a spare capacity for strategic reserves.

The concept of Strategic Petroleum Reserve (SPR) began in the US in 1975 following the energy crisis of 1973. In doing so, the American energy secretary did not wake up one early morning and decreed into existence storage facilities that could hold up to one billion barrels of crude oil and ensure energy supply in the US for up to 115 days in any event. It was a process that included the enactment of an act – the Energy Policy and Conservation Act (EPCA) – to situate the initiative in a legal and regulatory framework. And it was not until July 1977 that the first consignment of about 412,000 barrels of Saudi Arabia Light crude was dumped into a storage facility to effectively begin the United States Strategic Petroleum Reserve programme.

I am pointing this out so that Kachikwu does not return tomorrow to say he didn’t have the magic to deliver what he had promised. The other thing he did not quite explain while debunking the magician theory is the fact that the marketers who have regained the fuel importation business are not Fathers Christmas. They cannot import at the prevailing conditions (forex scarcity inclusive) and sell at N86.5 per litre of petrol decreed by government.

And so, I want to use this golden opportunity to say what Dr. Ibe Emmanuel Kachikwu with all his textbook brilliance could not say last Wednesday to Nigerians. We are returning to the regime of fuel subsidy. How the Buhari government plans to achieve subsidy payment without appropriation (nothing like subsidy is captured in Budget 2016) is a different matter. It is a bridge that would be crossed at destination. For now, Kachikwu should back off from talking big and face the reality of the situation, which is that nothing will change (and that includes disappearance of fuel queues) if the petroleum sector, especially the downstream continues to enjoy protection from complete deregulation.

I am consoled by the fact that my brother, Martins Okpalefe, mentioned the Petroleum Industry Bill (PIB) somewhere in his text to me. The bill has remained in the legislative works since 2008 when it was introduced. It has journeyed through two National Assemblies and it is almost a year into the third and its passage is still awaited. The bill has actually begun to lose character. It now looks more like a proposal for political horse-trading with all the attendant intrigues than it looks like a piece of law intended for the efficient management of Nigeria’s hydro-carbon resources.

This is the crux of the matter. In scope, substance and spirit, the PIB aspires to answer all the difficult questions that Kachikwuhas been struggling so badly to put in the right perspectives for close to 10 months. If this is so, why then is it taking all the time to create the legislative consensus to move the PIB into law? I shall explain. It underscores the choking grip of a rogue group on the resources domiciled in a part of the country. The National Assembly is enjoying the endless debates on the PIB but doing little or nothing to push through the very instrument that will launch the Nigerian oil and gas industry into global competitiveness.
And so, I ask my brother, Martins Okpalefe: Which is easier and cheaper to achieve; push forth and back with nebulous administrative reforms at the NNPC or take it a notch higher by ensuring the passage of the PIB to create a legal and regulatory frame that will speak to the associated issues in the downstream, midstream and upstream sectors of the industry?

Kachikwu should climb down and do the needful. Someone close should tell him that what was not magic at Exxon-Mobile may be big magic at the NNPC. And so, instead of talking big and pushing forth outlandish proposal of creating a strategic reserve where there is already acute starvation, he should keep his eyes on the ball. The ball is the passage and signing into law of the PIB. All other things shall fall in place and the oil and gas industry will remember him for just that.



20 Comments
  • Yahaska

    I am beginning to sense (from the above beautiful piece) that the honourable minister is struggling with terminologies (not legal) in the oil industry without proper comprehension but wants to “talk big” if only to prove to himself his academic (in Law) prowess as first class student?
    I guess it means there is a big gap between the steps required to workout idea to practice in legal profession and steps / processes needed to execute a “project” in oil and gas industry? The minister seems to need urgent help to be tutored in ‘this magic”…..
    I rest my case!

  • amador kester

    It had been a nation of ceremonial and sympathetic magical manipulations, where yes meant no and south pointed east but it never sustainably worked and cannot. And hapless casualties abound too. Thus kachikwu was right in bringing the bitter reality home. But lets try one magic spell in this surreal land of magic. Lets go for modular refineries which one gentleman scientist is already producing and lets diligently and technically endorse,,regulate,,standardize,monitor and supervise the development of indigenous refining capacity by private citizens not only in the nigerdelta but elsewhere.. Thats pragmatic functional magic

    • Abdulwasii ilyas

      It’s a virtue to learn to see the good in all things. Bros ogbodo has done a remarkable and commendable job in putting matters in the right perspective and proportion. A human error of ten against eight, doesn’t debar the write up from illuminating citizen’s troubled mind and shouldn’t prevent from tapping from his genius.

  • A. Ishola

    The Hon. Minister has raised so much hope and dashed it at the same time. How do you plan to reserve a commodity that is not sufficient. From all indications, we cannot afford to be sentimental in this issue. We need to approach the challenge honestly and diligently so that the whole system do not collapse in our face. A little suffering now for a future ‘abundance, is better than patching things up. ,

  • Sammy82

    I really wanted to read your Editorial but when I read the first two sentences and saw this fallacy “It was my candid submission after observing Dr. Ibe Kachikwu, the Minister of State for Petroleum Resources and Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) for 10 months” I lost all interest.

    Kachikwu was made GMD of NNPC in August 2015, that’s 8 months ago and made Minister of state for Petroleum in November, 5 months ago… How you came up with 10 months befuddles me to no end.

    Apparently your disdain for this regime restricts you from being factual and that is the reason I didn’t get past the first paragraph.

    • Damilola

      Ohhhhh…. 10months…. 5months…. did he bring up points or not? Has Kachiku performed up to your expectations? If yes, good for u man, u can start buying PMS to drink garri.

      • Do you mind the man? Leaving the message and asking for the messenger’s head! I think the author has separated the wheat from the chaff, giving the Minister a clear perspective in the labyrinth that he has found himself. Kudos to the writer!

    • Abdulwasii ilyas

      It’s a virtue to learn to see the good in all things. Bros ogbodo has done a remarkable and commendable job in putting matters in the right perspective and proportion. A human error of ten against eight, doesn’t debar the write up from illuminating citizen’s troubled minds and shouldn’t prevent you from tapping from his genius.

  • Moses Ajuyah

    The article above is well appreciated. My candid take is. The functions on Kachukwu should be designated to man only NNPC group not with petroleum ministry. ExxonMobil is a unit of NNPC operations. Stakeholders should see to this.

  • Asuk

    Kachikwu ‘s style is in consonance with that of Apc: PROPAGANDA! PROPAGANDA!! PROPAGANDA!!!

    • Iskacountryman

      so tinubu is wrong…

  • Efeturi Ojakaminor

    “It is cheaper to import fuel for domestic consumption than to refine for same purpose.” My God, am I losing senses or how does one react to such an assertion?

    • Iskacountryman

      just sit down and take a deep breathe…then yell chanji dole!!

      • Efeturi Ojakaminor

        My broda, I tire ooo…

        • Iskacountryman

          i am not ya broda…i am a muslim…who does not like change…

          • Efeturi Ojakaminor

            I am sorry. I did not know that one cannot be my broda only because he does not practice my religion. I was brought up to believe that all children of God are my brothers and sisters.

          • Iskacountryman

            keep believing what you like…but i am not sharing my virgins with you…

  • Edim Asekong

    Kachikwu, what ever the name means in his native village is synonymous with plenty grammar. That’s why the man is always getting himself into all sorts of wahala.

  • Abdulwasii ilyas

    Kachikwu’s gaffe underscores the perennial lack of will by public servants to do their home work before making appearances. When his attention was drawn to the point that Nigerians are in the dark about whether this government has any economic direction, presidential spokesman, femi Adesina; dismissed that as the giving of the critics of the government, and I was maniacally bewildered and stunned to my seat, that a man of such learning could be unaware of the three cardinal legs that support the table called government; the leader, team and vision. A dearth or absence of any of them spells doom for any system. I think the competence of some of these men is questionable to say the least.

  • Iskacountryman

    kachikwu cannot pass the pib…that is the job of the apc controlled national assembly…did tinubu pay you to press this button?

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