Mrs. Deziani Alison-Madueke, Nigeria’s Petroleum Resources Minister, a passionate Nigerian is promoting Nigerians participation in the oil and gas industry. Her collections of achievement, including the promotion of the PIB are testimony to her leadership prowess
Nigeria being one of the top 10 producers of hydrocarbons in the world, it is better known for its oil and gas assets than for its fascinating culture, people and heritage sites. President Goodluck Jonathan is doing a lot to bring attention to and develop the Fascinating cities, culture and people of Nigeria. He is also working hard to “Nigerianise” the oil and gas industry and minimise the impact the industry has on the environment. As more Nigerians are involved in the sector, infrastructure is being improved and the method of operation is more environmentally and socially friendly. Under his leadership Diezani Alison-Madueke is possibly the most transformational Minister of Petroleum Resources in the history of Nigeria.
Undoubtedly one of the most inspirational women in Nigeria, Minister of Petroleum Resources Diezani Alison-Madueke has achieved much in moving the oil and gas industry forward. She has worked hard to transform an industry that is vital to the future of her country but which, at the same time, has been burdened with inefficient and environmentally damaging practices, and a reputation for corruption.
Four flagship initiatives head the list of her achievements.
Reduced Gas Flaring
When in 2011 Nigeria was unable to meet the requirements of new gas-fired power stations, the country faced a gas emergency. Mrs. Alison-Madueke turned necessity into opportunity. By encouraging the recognition of natural gas as not only an existing resource but also as a catalyst for growth, she has enabled Nigeria’s gas production to reach an all-time high by utilising gas for power generation, and industrial gas consumption. There is also planning to encourage much greater gas use through processing as fuel for vehicles and industry, and supply to households throughout the country. New gas pipelines have been completed across the nation, linking up with those of West Africa as a whole.
The country currently flares a significant amount of associated gas. For decades this has had significant impact on the environment. The current administration has put in place robust mitigation strategies to reduce gas flaring and enhance gas industrialisation strategy. Over time, it will compensate for carbon emissions. The minister’s Gas Flare Down Campaign has been successful in reducing gas flaring. Gas flaring is now reduced to about 1 billion cubic feet per day, from an all-time peak of over 2 billion cubic feet per day in previous years. Continuing its crackdown on gas flaring, the ministry has installed pilot gas flare meters on some lines, to enable the government to establish applicable penalties for gas flaring. New gas-based industries such as fertilisers and petrochemicals production are in the advanced planning stage.
Petroleum Industry Bill
In 2012 Mrs. Alison-Madueke championed the new petroleum industry bill to modernise and consolidate outdated legislation governing Nigeria’s oil and gas industry, aiming to put it on an efficient new footing for the 21st century, to stamp out corruption and to help protect the environment. Her tenacious advocacy and support for the bill has helped many people to recognise the massive potential it holds for unlocking further development in Nigeria, to the benefit of her people.
Increased Local Content
One of President Jonathan’s key policies has been to increase “local content” – that is, to ensure that Nigerians get more opportunities to participate in the country’s economic development. The petroleum industry represents a litmus test for the success of this initiative; 30,000 jobs for Nigerians had been created in the sector by January 2013.
In the aftermath of environmental damage in Ogoniland, a by-product of oil production, Mrs. Alison-Madueke established HYPREP, the Hydrocarbon Pollution Restoration Project, aimed at restoring all communities impacted by hydrocarbon contamination in Nigeria and introducing reforms to avoid recurrence. Already HYPREP has seen the completion of all the transitional phase objectives, and the 2013 budget includes sufficient funding to continue its important work.
The Local Content Act
The modernisation and expansion of Nigeria’s oil and gas industry provide a major opportunity for economic growth. But the administration of President Goodluck Jonathan has seen potential beyond simply increasing financial and fiscal income for the government. With the passage into law in 2010 of the Nigerian Content Act to promote increased Nigerian involvement, both physical and human, in the petroleum industry, the government set new guidelines to ensure real opportunity for home-grown talent and industry. Now overseas companies operating in the Nigerian oil and gas sector must source a stated proportion of their resources in Nigeria itself. Through this policy, Nigeria will see its industry rise to meet international standards and its young people benefit from opportunities for training and jobs previously reserved for expatriates. It is a visionary policy, designed to gain the maximum effect for Nigeria and Nigerians, and implemented and overseen by dedicated and far-sighted officials at the Nigerian Content Development & Monitoring Board (NCDMB), whose work and achievements are featured in this section.
For Ernest Nwapa, executive secretary of the NCDMB, one of the finest examples of local content being developed in Nigeria is the pipe mills. “In the history of the oil and gas industry in Nigeria, we had never used Nigerian-made pipes until 2011. All, without exception, were imported,” Nwapa said. But because of the Nigerian Content Act of April 2010, companies wanting to acquire pipes had to buy them in Nigeria, if they were available in the country. If not, a company could gain a waiver for up to three years.” Nwapa stressed that such attempts to increase Nigerian content have been made before, but the difference this time is that they are being implemented.
In shipping, the drive to transform the ownership of assets used in oil and gas production has a specific urgency: when crises have blown up, such as in the Niger Delta, where many international companies pulled their vessels out, the cost to the Nigerian government was extremely high, since 90% of the vessels were foreign-owned and a large premium had to be paid. “So the target is to get indigenous participation,” noted Nwapa.
Nigerian companies are gaining the benefits of economies of scale, making them more competitive against international equivalents and raising the quality of products and services.
The result is that manufacturers are looking to partner with Nigerian companies; Nigerian students are taking courses in engineering, geology and other petroleum-related subjects, helping to increase the skills pool; new dockyards, inspection pits and workshops are in prospect; and there is a very clear push for the economy in general. “With this programme, we believe that employment is growing. Because of our human capital development programme every project has to have a percentage set aside for training and understudy by Nigerians…The climate for indigenous companies is better than it’s ever been.”
Local independent companies account for just 100,000 barrels of oil per day, only 5% of Nigeria’s output, but this figure is growing, partly because government policy aims to put a larger share of output into domestic hands and partly because major international companies are divesting their mature onshore fields. There remain 9 billion barrels of oil in Nigeria onshore and in shallow water, in areas in which the majors are not interested in working. If these are exploited, total Nigerian oil production could rise from around 2.5 million barrels per day to 4 million, turning the country into the sixth-largest producer in the world.
Ernest Nwapa confirmed that the proportion of contracts awarded to indigenous companies has gone up from 70% to 85% in the two years since the law was enacted.
The Nigerian Content Act makes it expedient for upstream companies to have a clear idea of what their exploration and potential development requirements would entail, and the feasibility of procuring the necessary goods and services from Nigerian sources. Failure to meet local content obligations would result in penalties and could prove a disadvantage should companies need to apply for a permit or license.