Wednesday, 27th September 2023

Esele: Government should jettison idea of importing crude from Niger

By Collins Olayinka
25 December 2016   |   3:03 am
Many Nigerians would see the move as responding to the challenges in the Niger Delta indirectly, by empowering a section of the country over the other.
crude oil

crude oil

Peter Esele is a former President of the Trade Union Congress (TUC). In this interview with COLLINS OLAYINKA, he counseled government against importing heavy crude from Niger. Rather, he wants the Federal Government to reposition the refineries to operate efficiently.

What is your response to the planned importation of crude oil from Niger Republic to the Kaduna Refinery?
Many Nigerians would see the move as responding to the challenges in the Niger Delta indirectly, by empowering a section of the country over the other. Let me quickly say that though that may not be the intention. I think that this thinking is largely due to lack of effective communication of government ideas. Government has not let the people know why it is doing what it wants to do. Actually, the Kaduna refinery was built to refine heavy crude, which is largely got from Saudi Arabia and Venezuela. The kind of crude Nigeria has is the sweet crude, which Port Harcourt and Warri refineries are built to refine.

What do you think were the factors that influenced government building a refinery Nigeria did not have product for?
I think that government at the time looked at the possibility of having a refinery that produces both types of crude oil. The challenge in running a refinery, especially at this time of economic recession, is to ask if Nigeria could afford three billion dollars to construct pipelines from Niger Republic to Kaduna? One of the factors responsible for this is that there are too many round pegs in square holes. Another factor is too much bureaucracy. There is also too much political interference and then corruption. When people say the NNPC is corrupt, they fail to find out that the way government has been running its affairs, particularly when NNPC is responsible for everything in government. If government wants quick fix and wants money to appear from the skies, they go to NNPC. So, when money is taken in an unaccountable manner, people get opportunity to keep some of the money.

You are saying that government has to communicate more
One thing we must always look at is looking at governance and government from a holistic perspective. When we have issues in the Niger Delta, what are the factors responsible for the issues?
How do we address and solve them? Again, what is the guarantee that the issues in the Niger Delta would not resonate in the northern part of the country when the importation of heavy crude begins? Are we saying there are no possibilities of people breaking the pipelines in the north? Whether we like it or not, poverty is one factor that runs through the length and breadth of the country. Poverty does not know who is Northerner or Southerner; once there is poverty anywhere, there will be acts of misconduct. For me, I am not interested in joining issues about whether it is a game or a step to favour a particular section of the country, but a step to get an alternative of providing succour to our people in view of what is happening in Niger Delta.

There is militancy in the Niger Delta, there is Boko Haram in the north and there is the Shi’ite crisis from the Kaduna axis. All of these require a quick and holistic solution through dialogue and negotiation.

But the bottom line is how the NNPC is going to raise three billion dollars to finance this project and who will inject that kind of money at this time of insecurity and economic challenges the country is passing through right now. This amount the NNPC is proposing can build a new refinery of over 100,000 barrels per day within a very short period. It is possible that those behind the initiative are looking at meeting our energy needs, but we should look at the numbers. How profitable will running a pipeline from Niger Republic be to Nigeria and the refinery at this time? If we want to embark on such a venture, we must ask ourselves what is the capacity of the Kaduna refinery? I am aware that the refinery is not performing at optimal level because there is no refinery in Nigeria today that is functioning optimally.

How about empowering and legalizing illegal refineries?
One of the things that we don’t do well in this country is domestication of ideas. Necessity that is the mother of invention cliché seems not to have meaning to us here. What those guys are doing may be illegal because they do not have license and the necessary qualification to do what they are doing. However, what I expect government to do is to find out the technology they are using. Even in advanced societies, things start from illegal level before government get hold on it and turn it around for the benefit of their people. Government can then involve the universities to do a study on it with a view to upgrading them. Government has said it wants to support the establishment of modular refineries, but how many people are putting money in the project? It will be difficult to get anybody to invest in this environment. We need to ask ourselves what serious businessman would want to invest here? At this time, Nigeria operates like four forex systems. What is the policy of government as far as foreign currency is concerned? That is why nobody would bring money to do anything here. Ordinarily, our population should be an advantage, but the unstable policy is rubbishing all those advantages. Therefore, NNPC can have a very wonderful plan on paper, but how would NNPC raise three billion dollars for this project?

Another germane question is, should this be the focus of this government at this time? Until government creates the enabling environment, we are not going to have businesses that would turn the economy around.

The Dangote refinery that is primed to come on stream in 2019 or so would eclipse all the NNPC refineries. I think all that the NNPC should be doing now is to position the refineries to work efficiently. Nigerians may no longer need all these refineries by the time Dangote refinery comes on board. I am a Nigerian and I don’t want NNPC to disappear but I still don’t think the corporation is anywhere near where it should be.

I don’t support a monopoly but government can raise necessary laws to take care of a monopoly. That has been done in many parts of the world. What we need to ask ourselves is whether we are in a place we should be? We must understand that there is no society that can grow in an atmosphere where there is no competition and enterprise. If care is not taken, in about 10 years we may be drinking our oil. Why? This is because the United States no longer buys crude oil from us, because they have shale oil. When Obama was elected he said he was going to work towards massive reduction of United States’ importation of fossil oil and he has achieved that substantially. Donald Trump has also said he will allow more explorations. Very soon, the United States will also start to export crude oil, which will lead to glut in the international market. Technology is also coming as more countries worldwide manufacture more electric cars and Norway has set 2025 for stoppage of cars using gasoline. Now, that is a serious threat to us as a mono-cultural economy. The earlier we start thinking the better for us as a people.