Nigeria’s Oil and Gas Policy is Woolly

Joseph Ezigbo, professor of medical parasitology and managing director, Falcon Petroleum Limited, which provides a range of oil and gas engineering, design and consultancy services, talks with Anayo Ezugwu, Realnews reporter, on a variety of issues in the oil and gas industry in Nigeria. In Ezigbo’s view, Nigeria’s oil and gas policies put in place to guide and protect oil business are woolly. Excerpts:

Realnews: As an oil and gas expert, how has it been doing business in Nigeria?
Ezigbo: Thank you. Let us start from the beginning; business in Nigeria is a bit tough. The playing field is particularly not very level, in this case, the policies that have been placed to guide, protect and direct the business in the oil and gas is very woolly. Not only are they woolly, in some places, they are not specific and not directed towards the oil and gas business. The policies that were made several years back have not been able to stand the test of time. As we are today, we need new policies and directions to be able to participate fully in the oil and gas business. But it had been evolving; past governments that have tried and done quite a lot to streamline the business starting from the time of former President Olusegun Obasanjo, who did a lot to bring in Nigerians to do business and also created a level playing ground for everybody. But again, it is a long journey. As they say a journey of one thousand miles begins with a step. So, I believe we have taken the first step. If subsequent administrations, can borrow a leaf from what has happened, then the chances that we are getting it right is there. I know the current administration is trying to do a lot through the minister, to streamline a few things, but the non-passage of the Petroleum Industry Bill, PIB, is delaying a lot of things.

Realnews: As an indigenous company, how have you been coping with foreign competitors doing the same business?
Ezigbo: The point is that when people are entrenched in any system, it is difficult to uproot them. It is difficult for them to open doors to allow others to come-in. But that is why the past administration said this is what Nigerians want; this is what we want to do irrespective of what those who have dug-in are trying to do. We have a lot of problems; what I think we should do is to create a level playing field and allow Nigerians to participate. But because we are still very young, that is, Nigerians coming into it. Others who are so old in it should find a way of encouraging those who are growing to get to the level of those who are already there so that they can compete favourably at the same level, that is what is absent today in the industry.

EzigboRealnews: You are involved in the construction of pipelines and maintenance of facilities. How often do you carry out maintenance services on the pipelines?
Ezigbo: Our main job is natural gas distribution; when we got the Ikorodu franchise, what we discovered was that to ameliorate the level of maintenance when we lay stall pipes, we choose polyethylene pipes. Polyethylene pipes are maintenance free. They last for a hundred years. So you can bury them once they are protected from sun light. They can last for hundred years, they don’t rust and you don’t maintain them. The chances that the pipes will collapse are not there. But in a situation where the pressure of the sun lights is too high, we use stall pipelines. The life span of a stall pipeline is between 25 to 30 years. So as long as the pipes are well coated on the outside, nothing will happen to them. Having said that, once in a while, like once every year, we pick the stall pipelines and clear them up and inspect them and because we don’t want a situation where we have an accident happen on the way. So we ensure that we inspect our pipelines to make sure that it is the way we left them. When there is need for repair, then we can repair before any damage comes in.

Realnews: Are you not bothered about the rampant vandalisation of pipelines in the country?
Ezigbo: The solutions are there. The point is having the political will to carry it out. So, we know what the problems are. There is a friend of mine who cracked a joke once. He said the moment the country started running away from its responsibilities and when you ask them what are you doing about the agricultural problems, they will tell you it is in the pipeline. Why are the students still at home? It is in the pipeline. Then people started going to the pipeline to look for the solution. But that is on a lighter note. What is important is this. I will tell you a story of what happened when we moved to Ikorodu to try and alleviate the problems with the community we were working with. When we got into Ikorodu, the first thing we did was that we went to the schools, spoke with the school children to tell them that we are coming in because the protection of your infrastructure starts from the children, the youths and to the elders. During the visit, we found out that the roofs were leaking, we wrote to the school authorities within where we built our station that we wanted to renovate the school. Having done that, the town invited us for a meeting. We went to the meeting and they took us to the market place. And the first thing we asked them was where is your town hall? They said they don’t have a town hall. They showed us the one they had started building and we completed it. That was before we started laying our pipelines. The point is this, if you go to where our pipelines are, you wouldn’t find them even though our signposts are there. When anybody starts digging around there, because we have subsidised the youths and the people there, anybody that sees them calls us immediately. Not that they are vandalising it but they are digging near our pipelines. Our men would go there to stop them and explain the dangers of putting a hole in a gas pipeline because of explosion.

The second thing we did was to take 60 women and train them in all trades. They were 60 women selected but only 58 finished the training in cooking, event management, bead making and so many other businesses. When they finished last month, we bought them the necessary equipments like bead making machines, ovens among others for them to go and start their own businesses. So, the business has started to the extent that a woman whose kids were driven out of school, when she started the trade, she thought she wouldn’t make it. But it got to an extent that she employed three people even before she passed out and today her kids are back in school. So, when you understand that the community is one leg of your business and your staff is another leg, then we can make progress. Apart from the fact that we trained and equipped them, we are also monitoring them to ensure that the business will not collapse. Because we are looking at the positive impact, train a woman, train a nation. Now we train 58 and one of them employs three when she was learning, now she has finished, she will probably employ two more. If others employ five each, multiply it with 58, you can see the multiplier effect on the families it will impact. We didn’t even stop there, we had a meeting with the country manager of Stanbic IBTC that came in from South Africa, and they have agreed to give these women more money if they have a bigger business plan, to fund them and expand their businesses. At the moment, we are training them on bookkeeping and basic business managements, at least for them to manage their finances well.

EzigboThese are the things we are doing. By next year, we will move to the youths and train them in all businesses as well. The moments we do that, imagine the multiplier effects on the people, when we will train 4000 to 5000 people in a community. There is no way we would do all these for them and they will allow people to attack our pipelines. This is the story I’m trying to sell to our people. When you move to a community where you want to lay pipelines and you give the chiefs N1 million or N10 million, it is nothing. You are impacting just one part of the community, the youths, adults and children are left out and that is not right. So, we need actually to understand the mentality of our people; if they are engaged, they will not go to the pipelines.

Realnews: What do you think about the local content policy and the role your company is playing?
Ezigbo: I thank God you mentioned it. We have a young man, Mr. Nwapa, who is in-charge of it. He is working hard. He is trying to make an impact but you see it is a critical thing to do because those who are there before like the IOCs, they are so entrenched in the business that they would not want to bring in Nigerians. But that is not the problem. The fault is in us not in them. We keep shouting the IOCs are doing this or that. It is not so because when you are making profits, we don’t want any other person to come in. It is the responsibility of the government to say this is what I want my people to do, if you say no for Christ sake, then go. The moment you say no please leave us because we have capable Nigerians in all spheres of oil and gas business, they will sit up. The best of engineers that work for them are Nigerians. Go to America, UK, Canada and so many other places, you see Nigerians. Some of the best medical doctors in the world today are Nigerians. Some of the best engineers in the US are Nigerians. So what are we talking about here? What we need is for government to legislate good laws that would allow Nigerians to participate in this system. Some of them believe that when you give Nigerians contract to go and buy this computer they will still go abroad to buy it. That is not local content. Local content is the full participation of Nigerians in every aspect of the oil and gas business that is what local content is. I’m glad that Nwapa is focused but we need help from the government to drive it.

Realnews: The Petroleum Industry Bill, PIB, has been generating a lot of controversies across the country, what in your view is the problem of the bill?
Ezigbo: As I said earlier, the tendency is for those who are already into the oil and gas business to prevent others from coming in. And the only way they can do that is to prevent changes in the system and that is what the PIB wants to do. I want to use this opportunity to thank Diezani Alison-Madueke, minister of petroleum resources; she is a wonderful lady and she is taking the bull by the horns. For the first time in Nigeria, an Amazon, that’s what I have to call her, has taken everybody head on and she is ready to fight for it. But the problem is our people. Are they willing to see the light and help her fight the IOCs over the PIB? The IOCs have their concerns; there is no doubt about that. Nothing is perfect, no law is perfect, but let us start with the PIB. Let them allow her push through this PIB, and then we can come back and amend the lapses. Let us put in the Bill first to be able to correct the lapses, that is what we should do not stopping it. If the IOCs say if you pass the Bill, we will leave, let them leave. For me, it is a very simple thing because if they leave today, Nigeria may have problem in the next three to four years but we will get it right. All the engineers working for the IOCs are Nigerians; they do the drilling, production, distribution and everything. Who gives them the impression that we cannot survive without them? If we start and make mistakes, we will correct it and learn from it as well and then within the next five years, Nigeria will be a country of its own where everything will be in the hands of Nigerians. That is what we are asking for. That is what we are asking the National Assembly to please come together and say enough is enough for once. Let the north and the south come together and think of Nigeria first.

EzigboRealnews: Efforts to stop gas flaring in the country do not seem to be working, what do you think is the cause?
Ezigbo: That is why we are talking about old laws that are obsolete. Nigeria is one of the countries that still allow flaring of gas. Most countries would tell you, you cannot flare. If you cannot drill and use the gas, forget it because it is embedded in the agreement. They have proper plans to deal with the gas when it comes out. But in Nigeria, it is not the same thing, their interest is to get the oil as soon as possible; whatever happens to the gas is none of their business. So, they flare it and in Nigeria the laws preventing flaring is not very strong and they prefer to pay the penalty. But imagine if we flare approximately $2.2 billion every year. Just think of how much we have flared over the past 50 years. Imagine if we have been putting it into economic use what it should have done for this country. Like us, what we are trying to do is to use all the available gas and pass it to the industry so that flaring can stop. But you see the infrastructures are not there and the laws that would enable more Nigerians to come into the business and do gas gathering and move out all those flared gas into the industrial areas are not there. So, the economic will and political will of the government to actually do that is lacking. So that is our problem.

Realnews: Is it true that gas flaring has been reduced to 20 percent?
Ezigbo: You see when you put percentages on the volume of gas we flare, there have been a reduction, but to tell me that it’s only 20 percent, I’m not sure. But whether it has been reduced significantly, yes, but for only 20 percent, I want that to be reviewed again before I can accept it.

Realnews: What is your assessment of the nation’s oil and gas sector at the moment?
Ezigbo: It is better than yesterday because a few of us have come into the system and doing well. But it can be better.

Realnews: Could you give an overview of what your company has been doing in the past 19 years?
Ezigbo: Falcon started from a very humble beginning 19 years ago in Port Harcourt. We opened shop in 1994 and we have grown to where we are. We converted about 90 percent of all the industries in Agbara, Otta and Lagos to Ikorodu to fire natural gas. We started with internal piping and converging of facilities to fire natural gas. We converted Cadbury, the first company that started firing in Lagos. Eventually, with the blessing of former President Olusegun Obasanjo, we got our franchise. Today, we are distributing gas at Ikorodu. We are growing and branching off into other areas; we are planning to go into CMG, marine business and also moving outside the shores of the country. We are planning to go to Ghana, to send NLG to Ghana. So we have grown and I am praying that we will grow into a conglomerate that can impact on lives wherever we are. That is what we are looking for.

Realnews: Next year, your company will be 20 years, how do you intend to celebrate it?
Ezigbo: Well, we hope to come out and show the people what has happened to us from our beginning to where we are today. Business has been tough but good; we give glory to Almighty God for giving us the patience and the tenacity to be able to withstand all the buffeting we received in the system. We went through all the buffeting and I’m glad we can sit down today with our head held high that we have done everything within the system in an ethical fashion and without cutting corners.

— Oct. 14, 2013 @ 01:00 GMT

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