Date Published: 07/19/11

The Return of Allison-Madueke: Ray of Hope For A Critical Sector 1 by Jackson C.U Akpan

Mrs. Diezani Allison-Madueke, Nigeria’s Petroleum Minister

For a minute, the reappointment of Petroleum minister, Diezani Allison-Madueke seemed a long shot, no thanks to a barrage of negative and unsubstantiated allegations of ineptitude and gross official misconduct bandied by a section of the media, on the part of the minister.

But while the attacks, apparently sponsored by those averse to her radical and progressive policies as it affects the sector, she held her cool, and continued to push for reforms fashioned to turn around the most important sector and major economic artery.

There is no doubt that her background prepared her for this onerous task. The Howard University, United States of America, graduate of architecture was first female Executive Director for Shell in its 70 years of operation. She was also External Affairs Director at Shell. She cut her teeth in construction management, facilities maintenance and management and project management all in the United States.

For instance Alison-Madueke detailed the plans for a new stage in the development of the petrochemical industry by creating a national industry for the by-products of the petroleum industry. She explained that over the next few years, full implementation of the entire gas master-plan agenda will result in about $25bn worth of investments in gas processing, transmission and downstream gas utilization projects.

Already, the three projects on which the revolution is anchored will result in foreign direct investment as high as $10bn.

The petrochemical project alone will be the largest industrial complex in Africa with products that will enable the growth of numerous downstream plastic manufacturing industries. With these, secondary industries such as the high end printed circuit boards, car dashboards etc. can be established here in Nigeria.

Multi-national oil companies were said to be at the forefront of the campaign to stop President Goodluck Jonathan from reappointing Allison-Madueke, into the federal cabinet.

The oil majors which virtually control the economy are said to be worried by what they see as Allison-Madueke’s determination to pull the rug off their feet through the implementation of Local Content Act as well as her determination to see that the Petroleum Industry Bill (PIB) is passed.

They deployed all manner of tactics, including lobbying and outright mudslinging to blight her chances of making the ministerial list. The oil majors are said to be trading on a familiar, as they were said to have stopped the appointment of Mr. Chris Ogiemwonyi as minister in the same ministry of petroleum resources in 2007.

The grouse of the multinational oil firms with Allison Madueke, who until her appointment into the federal cabinet in 2007 was a top executive with Shell, is her insistence that some sensitive areas of operation in the oil industry which have hitherto been the exclusive preserves of expatriates be opened to local participation.

The Local Content Act provides that only those skills which are not available locally should be done by expatriates, a measure aimed at reducing expatriates’ quotas in the industry. Billions of naira are leaving by the country annually to the huge amount being repatriated home by workers in the industry. The PIB has been stalled in the Senate for a long time following what is widely seen as the hand of the oil majors who fear that their overbearing influence on the economy would be whittled down as soon as the provisions of the proposed law became effective.

With the passage of the PIB in place, the texts of all licenses, leases and contracts and any of the changes to such documents will no longer be confidential.  Nigeria will move to one of most open and transparent in the petroleum world. This is because payments to the government of Nigeria will be through public information.  It will not be through any secret or hidden agenda.

The Local Content Act also provides for mandatory development of local skills in the oil industry so as to increase local participation in the day-to-day running of the oil multi-nationals.  The oil majors are not comfortable with the emergence of wholly indigenous companies, which are proving to be key players in the industry.

A careful study of the bill reveals at a glance that it establishes the legal and regulatory framework, institutions and regulatory authorities for the Nigerian Petroleum Industry. It went further to stipulate guidelines for operations in the upstream, midstream, and downstream sectors and for other purposes relevant to same.

The benefits of the bill include measures to ensure the government increases its take from a growing number of deep-water developments.  Review of the royalties on gas by creating a new fiscal regime separate from rules governing oil.  Changes to the way tax breaks are applied for new developments.  Oil companies will be encouraged to refine at least 50 percent of their production in Nigeria by the end of the decade.  In addition, new rules to boost employment of Nigerians in the oil industry.  Also incentives to encourage development of marginal fields as well as improve community programmes .

At her screening she demonstrated a lot of knowledge and capacity to take the sector to the next level. She told the Senate Nigeria’s energy reform bill will need further revision by lawmakers, , which could add to years of delays that have cost billions of dollars in lost investment.

The Petroleum Industry Bill (PIB) is a mammoth piece of legislation aimed at overhauling Africa’s biggest energy industry but its wide-ranging policy plans have prompted drawn-out negotiations between stakeholders.

According to her “The particular bill in front of you will need a certain amount of review because it does need to be looked a little more,” she said.
“Despite being Africa’s largest crude oil exporter, Nigeria imports most of its gasoline and other fuel because its dilapidated refineries cannot meet domestic demand.
“Those three (new) refineries should be up and running in 36 months and will ensure we are producing another 700,000 barrels per day to add to what our traditional refineries will be producing – about 350,000 barrels per day in two years “In three years time Nigeria should be a net exporter of products,” she added.

In a confident performance despite series of recent bad press, Alison-Madueke also said progress was being made with analysis of potential oil deposits in the north of Africa’s most populous nation. She said experts had told her they would find oil in the Chad Basin within two years.

Alison-Madueke has been a victim of series of damaging corruption allegations from a section of the Nigeria media ever since it emerged that she might be returning to her former job in President Jonathan’s new cabinet.
“Latest in the expose is that she failed to sign up for the compulsory National Youth Service Corps (NYSC) programme after her graduation from the university.
Her traducers also allege that as minister for petroleum resources, Diezani Allison-Madueke trampled on due process in awarding crude lifting contracts and arbitrary awarded oil lifting contracts to obscure companies.  Facts on the ground however, did not support such assertions.

Minister Allison Madueke has the same similarity with Timothy Geithner during Geithner  senate hearing, pundits raised a lot of issues but  the United States Senate prevail on the fact the President Obama convince the senate that Timothy Geithner is the right person for the secretary of Treasury. President Jonathan Goodluck believe that Minister Allison Madueke is the right person for petroleum ministry, she has performed remarkable well as Ministry of Petroleum


The signing of two critical agreements between the Federal Government and international oil companies in Nigeria has guaranteed 70 percent supply of the total power sector gas requirements in the country.  The agreement is significant in the sense that it would guaranty steady supply of the much-needed electricity to power the economy.

Furthermore, gas supply agreement negotiations between Chevron joint venture and Nigarjura fertilizer company has also been finalized to pave the way for the take off of the fertilizer project while the Nigerian National Petroleum Corporation (NNPC), Chevron, Xenel of Saudi Arabia are currently in Houston, Texas; looking at the conceptual engineering options for the petrochemical and central processing facility.

These new initiatives are part of the several steps taken by the Ministry of Petroleum under the leadership of Alison-Madueke to ensure that the Nigerian petroleum resources in the last one year are maximally utilized to the benefits of Nigerians through the creation of employment, steady supply of fuel and economic growth, and by extension increase the gross Domestic Product (GDP).

There are plans that additional 20 refineries are being conceived for implementation by the government. While the execution of the Pan Ocean/Egbin gas supply agreement was a major achievement last year, the latest agreement is even more significant. The  ministry is executing gas supply agreements between the top two gas supply joint venture (JV) in Nigeria namely the NNPC/SPDC and NNPC/CNL JVs. Collectively, these two JV’s will be supplying about 70 percent of the total power sector gas requirements.

According to the minister “In essence, having fully negotiated the terms between these two JVs and an anchor power plant- Egbin, we are now in a position where we can very rapidly replicate these agreements across all other power plants that will be supplied by these JVs namely Olorunshogo, Sapele, Omotosho, Alaoji, Delta, to name a few. Although it has taken a while to close the negotiations, the knock on effect in terms of other agreements that can be immediately executed is phenomenal,”

All these together will ensure supply to power sector in a sustainable manner and more importantly ensure that the journey toward creating over 500,000 jobs as promised by President Goodluck Jonathan has begun in earnest.

Alison-Madueke further said  on that occasion that one other thing that no one can take away from this administration is the fact that fuel supply to all parts of this country has been sustained and sold at same price all over.

Unfolding the agenda on gas last June, Alison-Madueke had stated that the Federal Government was now more focused as ever to ensure expeditious implementation of the Nigerian Gas Master Plan to attain clear-cut short-term and some medium-term objectives, as well as to position Nigeria as a major player in the global gas market by securing the Final Investment Decision (FID) of the Brass Liquefied Natural Gas, while refocusing on the Olokola Liquefied Natural Gas project.

The minister had listed the objectives of the two-pronged action for gas to include sustainable supply of and delivery of gas to the power sector, implementation of a sustainable commercial framework for domestic gas through a review of the gas pricing to encourage investors by enabling them secure bankable agreements and the transformation of Nigeria into a regional hub for gas-based industries by signing up world class investors in the petrochemicals, methanol and fertilizer sectors.

Explaining the newly approved gas pricing regime, she said: “Currently, the price of gas to power is two cents ($0.2) per mmbtu of gas, and that by the end of last year, the price of gas would increase to $1/mmbtu. The price would graduate to $1.50/mmbtu by 2011 and $2/mmbtu by the end of 2013, adding that beyond 2014, it would increase based on inflation rate.”

Speaking on the local content act in relation to efforts of the present administration and the future of the industry’s growth, analysts readily recall that it was only in the last one year that the Nigerian Content Act which had been clamored for, for almost 10 years could only sail through the legislative processes and finally passed into law.

The passage of the Act into Law, interestingly, was to mark a significant landmark in the Nigerian oil and gas industry. The former minister, who incidentally doubled as the chairman of the governing council of the Nigerian Content Development and Monitoring Board, had at several fora restated that the Nigerian Content Act was not intended to indigenize the industry or nationalize assets of investors in the Nigerian economy.

Rather, the Act sets out provisions that guaranteed that investments made in facilities within the country will be fully utilized and that will ensure that the rights of every investor was protected under the laws. The targets set out in the Act presented substantial opportunities to establish new facilities in Nigeria, upgrade existing yards and develop human capital to take advantage of the imminent expansion of the industry, following the expected passage of the Petroleum Industry Bill (PIB).

The implementation of the Act in the past one year has, therefore, provided immense inspiration and the confidence to adopt the various pilot schemes which are already making positive and immeasurable impacts. With job creation now a priority of President Jonathan’s administration, the Nigerian Content implementation has pledged to create more than 300,000 direct and indire ct jobs.