By Dr. Emmanuel Ibe Kachikwu
*Puts in focus a “blueprint for Niger Delta’s development that can be sustained for posterity”
Let me welcome you to an 8 parts serial podcast that will look critically at the 7 big wins that were instruments of our intervention in the oil industry when we came in and see how we fared in each of those and what we need to do going forward.
All over the world these 7 big wins has been praised as a right model for intervention. But, let us now go neck deep and get a 3D view of what really has happened. In this edition, we are going to focus strictly on the Niger Delta security issues; what we met, what we did, what the future holds for us.
His Excellency, the President was kind enough and gracious enough to appoint me with the twin positions of both the GMD of the NNPC and the Minister of State for Petroleum. Niger Delta was a burning issue at the time. There was key unrest in Niger Delta, a huge amount of militant activities going on. There was reduction in production volumes, so much reduction leading to a consistent loss that led us almost to a cripple in the oil industry. Actually, at the lowest point we were down to about 800,000 barrels. All the infrastructure that we had were compromised; vandalism and militancy compelled the integrity of the infrastructure to disappear.
These sustained attacks continued for over a 10-month period. In February 2016 for example; the Forcados oil export line was breached, leading to very major attacks in other oil and gas assets. In May 2016, the Nembe creek truck line was attacked; in November 2016, series and series of attacks.
What else did we meet? We met the complete absence of a coordinated effort at developing the Niger Delta development model. There was, therefore, a consistent lack of investors’ interest in Niger Delta area, because of what really had happened was that with all the militancy attacks, uncertainties on policies, the lack of coordination in terms of development, everybody basically watched for what the next alarm bell was going to be.
The sheer amount of problems that we inherited in Niger Delta meant that literally if nothing was done, the country was getting crippled; no money for investments, no money for infrastructures, no money to run the budgets. We had to move in very rapidly with the support of His Excellency, the President.
We dealt with three main fundamentals. We decided to deal first with the environment and security issues. What were we going to do about that environment, the issues that had been burning in all the areas of Niger Delta?
The first thing we realized was that the one-on-one engagements, as good as they were, were obviously not leading us to the Promised Land. Of course, I did the whole yeoman’s job of taking a tour on the Niger Delta myself and getting into the creeks, at very great risk to my life and that of a lot of my staff, to engage the militants in their domain. I think the advantage in that was that it brought understanding and we then began a sustained community engagement.
The first thing we did was to work with the leaders of the areas to work towards the setting up of the PANDEF group. We thank all the PANDEF members; leader, Chief Clark and all of them who did fantastic work in trying to put together this Pan-Niger Delta Forum. We worked coordinating with them. So once that was set up, it was easy to have a body that could engage the Federal Government.
Then we dealt with the issue of Ogoni clean-up. The President had made a promise during his campaign that he was going to take this as a burning issue and he did and he inaugurated the Ogoni clean-up process that was launched very ceremoniously and we began the engagements and the financing that will enable us address the Ogoni cleanup. But not only Ogoni needs to be cleaned up, a whole lot of other areas need to be cleaned up. This is basically the beginning map on which we are going to work.
We came up with the Nigerian Gas Flare Commercialization Programme, which was trying to address the exit of flare. The United Nations had set a 2030 deadline; we set a 2020 deadline. We are aggressive about it because we knew that unless the environmental issues in Niger Delta were addressed, no amount of investment would get a buy-in with the people.
With all the sustained engagements that we had, we had series of ceasefires which enabled us to bring back production volumes. In December 2015, we had a 30-day ceasefire agreement. It brought back production rapidly from the all-time low of about 800,000 barrels to about 2.2 million barrels. In June 2016, we had another 60-day ceasefire agreement, which lasted for a while. In April 2017, leading up from the 60-day ceasefire that continued and working with PANDEF and other elements, and with the assistance of the Vice President’s visit; we got to a point where we basically moved our production to an all-time 800,000 barrels volume to volumes in region of 2.2 million barrels.
We looked at infrastructure and not only did we deal with repairing some of the infrastructures that were broken down to enable oil begin to flow again. We came up with the concept of what to do with the illegal refining that was going on in the region. So, we came up with the modular refinery concept. Till date, we have targeted development and approved about 10 of those; two are basically on land now and beginning to construct. Hopefully, within the next one year, we will be able to deliver real results. But we are pushing for the other eight.
The AKK Pipeline that had been abandoned for a very long time was put back. The Federal Executive Council approved this and now engagements are going on to sort out this contract and begin that construction. That AKK pipeline will enable you deliver gas from the South into the North and open up gas delivery to homes, and development in terms of petrochemicals. So it is a huge infrastructure development.
We have been able to go visit some of these modular refineries. We visited the one in Ogbele, in Rivers State; we also have visited the one in Kwale (Delta State). Those are the two that are basically on ground and ready to take off. But there are 8 additional ones that are basically all getting ready for completion for financing and moving on.
But, the area where I think we have done a lot of work is in Capacity Building and Economic Empowerment. The greatest problem of Niger Delta has been that it’s not because money hasn’t gone in. Inter-agency researches have shown that over $40 billion have gone into Niger Delta in a period of, maybe, 15 years.
So what we’ve tried to do, was working under the Office of the Vice President, to try and working in conjunction with the Ministry of Niger Delta, Ministry of Environment, NDDC, NNPC, Oil companies, everybody; we were able to show the sheer amount of money over a period of time that had gone in, and the sheer amount of money that was available still to go in. And that led to a very integrated work that produced a report that enabled us to see what everybody’s budget was and what we needed to do. It ran into trillions.
And so working under an inter-ministerial group put under the Vice President, we’ve now began to build capacity, and build economic empowerment on the grounds of that and making sure that we supervise each of those intervening government agencies to do what they are supposed to do and the oil companies to take up also their responsibilities.
But we have also gone further than that. I have gone ahead to set up State technical committees and gone from state to state to take that whole vision and give it fruition. So, in those states, with the State Governments being the Chairmen of some of those; we have had our own representatives; we’ve had oil companies’ representatives, we’ve had Government Agencies. And the whole idea is to look at the blueprint of what oil is produced in a state, what volumes are available, what opportunities for economic empowerment are there and what are the burning issues in those areas. These technical committees have been launched in three states; in Edo State, in Delta State and in Imo State, and we are looking to complete that whole process.
If we succeed in doing that, for the first time, what you are going to have is a complete blueprint, complete local engagement, complete local intervention and supervision of the Niger Delta development model and that is something that can be sustained for posterity.
So, those interventions have helped; those technical teams have helped. Like I said, we’ve done it in about three states. We are going to continue to push the envelope in other states. Now, obviously in all these have rallied from the initial work done when we first started with all the problems we had, to the Vice President’s visit that was monumentally successful and helpful; to obviously the presidential cloak that has been given to this to make it succeed.
Where do we go from here? A lot of work still needs to be done, let’s not kid ourselves. What we have done is take a very difficult environment and bring some sanity to it.
So today, when we celebrate over 2 million barrels, when we celebrate $75, $77 price in oil, when we celebrate enhanced and increasing reserve size for this country, when we celebrate the highest capital budgets that this country has seen in decades, it is all because we found a way to find sanity in this very, very difficult environment. But we still have a lot of work to do.
Those engagements we talked about with the state technical committees are a key pivot; we must sustain and complete the process. And thereafter, there must be active; and there must, on a month-to-month basis, explore what the opportunities are, and ensure that the local populace are getting those opportunities.
There are regulatory interventions; the Assembly is working hard at PIB, and there’s Host Community Bill they are also doing. All these Bills, when passed, will give legal parameters to some of the interventions that are essential and create a sustained platform for these interventions in the future.
The President is completely committed to the success of this and we are working with the Ministry of Environment to continue the Ogoni clean-up. I have just directed that funds necessary for this must be released with a very short period of time so that this Ogoni clean-up can actually move from the drawing board to actual practical realities. And I’ve called on both NNPC and the oil companies to fund this sufficiently for us to move forward.
We’ve also began a programme to engage the Ogonis where there has been substantial problems, to get the community buy-in; to get the community’s participation. A few weeks ago, we held the Ogoni re-entry meetings. We are going to get into some of those, and not just Ogoni, but a lot of the areas to see how we can get people to believe gain and have faith in the processes that we are rolling out.
We are currently working on a framework for community-based participation in the protection of oil and gas pipelines, and oil and gas assets. How do we get the communities to take ownership of these pipelines, protect them, ensure an efficient delivery without complications and also ensure that in future they get benefits from some of the economic interventions that come out of all of these?
So, a whole lot of work needs to be done. It is almost like you are looking at the bill of rights in some of these areas. How do we develop things that people are entitled to; people execute, communities are involved, constant engagements continue, and the Government’s interest in this continues to ride.
But this where we met security, this is where we met the Niger Delta, this is what we have done in the two and a half, three years that we have been there. But like I said, the work continues.
What we can say is that provided Government continues to focus, provided the oil companies continue to focus on their key social responsibilities in these areas, provided that Government Agencies that are given responsibilities for intervention continue to carry out their jobs, provided communities realize that, at the end of the day, destruction of platforms leads to nothing but confusion and mayhem; but that working together with the Government, we can create an equitable problem-solving mechanism, provided State Governments and security apparatus carry out security intervention for peace in a manner that respects the fundamental human rights of citizens; we actually can take leverage from the total world attention that is looking at the work that we are doing in this area and get Niger Delta to where it should be.
Thank you very much for listening.
Kachikwu is the Honourable Minister of State for Petroleum Resources
(Podcast on May 23, 2018)