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How oil ministry came under the presidency

By Eric Teniola
03 May 2023   |   2:57 am
Of all appointments to be made by the President Elect, Asiwaju Bola Ahmed Tinubu, none will define his presidency, than the appointment of Minister of Petroleum. There are Ministers and there are Ministers but the Minster of Petroleum in this country is in a class of his own.

Of all appointments to be made by the President Elect, Asiwaju Bola Ahmed Tinubu, none will define his presidency, than the appointment of Minister of Petroleum. There are Ministers and there are Ministers but the Minster of Petroleum in this country is in a class of his own.  He or she holds the key to the nation’s treasury. We shall know by the appointment the direction of his government.

Petroleum subsidy to be not to be, our refineries, will have great impact on our future and these are issues that the next Petroleum Minister will have to determine.

Asiwaju Bola Tinubu has several choices over the appointment. He could appoint himself like General Abdusalam Abubakar GCFR, President Olusegun Obasanjo GCFR and President Muhammadu Buhari GCFR all did. Afterwards he is from the oil industry. He could appoint someone either inside or outside of the oil industry. Or he could appoint someone from the South South region so as to compensate to the people of that region. Afterwards the oil comes from their area. The Minister of petroleum is not just an ordinary person in this country or outside of this country.

I remember Sheikh Zaki Yamani (June 30, 1930-23 February 2021) who was the embodiment of the ascent of the Arab Petroleum Power and the face of oil embargo of 1973, who brought the Western world to its knees. I was in the Presidency during the Sani Abacha era and I knew the influence of the then Petroleum Minister, Senator Dan Dauzia Loya Etete (78). We still remember the power and the influence of Mrs Diezani K. Agama Alison-Madueke (62) during the Goodluck Jonathan Presidency.

Let us take a look at the schedule of the Minister of Petroleum. My last check showed that he has more than twenty schedules of responsibilities. They are formulation and implementation of policies and programmes, supervising NNPCL, supervising National Petroleum Investment Management Services (NAPIMS), Crude Oil Matters, OPEC Matters, Nigerian Gas Company, Nigerian Liquefied National Gas, Department of Petroleum Resources and Nigerian Petroleum Development Company.

Other responsibilities are Integrated Data Services, Eleme Petrochemicals Company, National Engineering and Technical Company, Petroleum Training Institute, Petroleum Equilisation Fund, College of Petroleum Studies, Chairman, Ministerial Tender’s Board and Postings, Research and Development(R & D), Abuja Offices and Housing Projects and African Petroleum Producers Association Matters.

The seven agencies under the Minister of Petroleum Resources are Nigeria National Petroleum Corporation (NNPC) is now known as the Nigerian National Petroleum Company Limited established April 1 1977, Nigerian Upstream Regulatory Commission (NURC)—established August 16, 2012, Petroleum Training Institute (PTI) established 1973, Petroleum Technology Development Fund (PTDF) established 1973, Nigeria Nuclear Regulatory Authority (NNRA) established August 3 1999, Nigerian Content Development Management Board (NCDMB) established in 2010, and Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) established August 16, 2021.

The powers of the minister of petroleum resources under the Petroleum Act extend to all segments of the industry and span the policy, regulatory and commercial spheres. For example: in the commercial sphere, the minister is empowered to set the prices of petroleum products; in the policy sphere, the minister sets the policy priorities for the industry through policy pronouncements and directives; and in the regulatory sphere, and arguably most importantly, the minister has extensive powers to make determinations, prescribe anything required and make regulations and policies for the industry.

The minister is the apex regulator of the industry, imbued with wide discretion. The Department of Petroleum Resources carries out the day-to-day regulation of the industry on the minister’s behalf.

The culmination of the minister’s powers in the commercial sphere and his obvious conflict of interest may be seen in his appointment as chair of the Nigerian National Petroleum Corporation (NNPC), the national oil company.

To my knowledge the Minister of State for Petroleum or special adviser to the President on Petroleum matters may carry out any of these schedules as may be delegated by the Minister of Petroleum. No wonder General Abdusalam Abubakar (80), President Olusegun Obasanjo(86) and President Muhammadu Buhari(80) placed the Ministry of Petroleum Resources under their direct supervision.

In 2002, the then House of the Representatives, under the leadership of Alhaji Ghali Umar Na’Abba(64) from Tudun Wada Constituency in Kano queried President Obasanjo for appointing himself as Minister of Petroleum. That was when the House of Representatives could bark and bite unlike now when the Speaker of the House of Representative is the one opening the door of the aircraft for the President Elect.

The query then was that “Mr. President has refused to appoint a Minister of Petroleum Resources which action has occasioned the following: (a) that since inception of this Government in 1999 Mr. President refused, failed and or neglected to appoint a Minster of Petroleum Resources contrary to the Petroleum Act cap 350, laws of the Federation as amended by the Petroleum (Amendment) Act No. 22 of 1998 and thereby authorizing the performance of or performing yourself the functions of the Minister of Petroleum Resources (b) that in breach of Section 9 (1) d III laws of the Federation 1990 appointed the Committee which has increased the prices of petroleum products which function is that of a Minister of Petroleum Resources under the said Act, which Act constitutes a gross misconduct (c) that a process of establishing the refineries through bidding was established and provisional licenses were issued without the approval of the Minister of Petroleum as required by 3 (1) of the Petroleum Act which Action amounts to gross misconduct”.

President Olusegun Obasanjo’s response was that “Under Section 5 of the 1999 Constitution, the Executive powers of the Federation are vested in the President who may exercise same directly or through the Vice President, Ministers or officers in the public service of the Federation. It is apparent from the wordings of this section that it is within my discretion to exercise these powers directly or delegate same to certain functionaries.

In the same vein, Section 147 (1) of the Constitution makes provision for such offices of the Ministers of the Government of the Federation as may be established by the President. This clearly gives me the discretion over which office of Minister to establish. The Constitution does not specify the Ministries which I have to establish or the powers which I may delegate to Ministers.

It is therefore within my constitutional powers to choose not to establish the office of the Minister of Petroleum Resources and directly exercise executive control over petroleum matters. It is immaterial that the office of Minister of Petroleum Resources is provided for in the Petroleum Act as the provisions of the Constitution take precedence over that of an existing law in the event of a conflict”.

President Olusegun Obansanjo GCFR made his reply on September 7, 2002.
The appointment of Petroleum Minister in this country has always generated controversy.  The pioneer Minister of Petroleum was Colonel Muhammadu Buhari GCFR in 1977. It was during his tenure that THE PUNCH Newspaper published an alleged loss of 2.8 billion naira oil revenue in 1977. Chief Festus Remilekun Ayodele Marinho (December 30, 1934- January 21, 2021), Papal Knight of St. Sylvester, was then the Managing Director of the NNPC.

In 1977, the military head of state, Lt. General Olusegun Obasanjo, set up a crude oil sales tribunal to investigate the operations of the Nigerian National Oil Company (NNOC), which metamorphosed into NNPC same year. The tribunal found out that in three years, NNOC had failed to collect its equity share of oil produced by Shell, Mobil and Gulf. As a joint venture partner, NNOC was entitled to 182.95 million barrels of oil production. But NNOC did not find buyers for its own share, thereby losing a potential income of $2.8 billion.
The way and manner the press reported the story angered Colonel Muhammadu Buhari.
To be continued tomorrow
Teniola, a former Director at the Presidency wrote from Lagos.