Rilwanu Lukman: The Controversial Mr. Fuel Scarcity

“Time will tell!” This is one of the elder’s saying when there is a major controversy over a particular issue or a person, what they are saying in essence is that there is no offence in waiting for the person to come up with proof and true picture that will provide the basis either for rejection or acceptance of the good or bad allegations against him/her.
This is the case of Nigeria’s longest serving Petroleum Minister, Hon. Minister of Petroleum Resources, Dr.Rilwan Lukman, who was appointed by the present ailing President of Nigeria, Umaru Yar’Adua in the late 2008 after a cabinet shake-up in which 20 ministers were relieved of their positions.
He has a very rich academic background that will earn him accolades anywhere in the world. In Nigeria, his visibility in the corridors of power with one appointment or the other provides support and breakthrough for successive presidents to put him in a sensitive position of higher responsibility.
However, in reality and in practice, the opposite is always the case when it comes to assessment of his performance in office. And that is why most analysts have described him and former governor, Dr. Sam Egwu as the worst ministers in President Umaru Yar’Adua’s cabinet.
Lukman has severally been criticized by eminent Nigerians for accepting to serve as Minister of Petroleum when his name was submitted to the Senate in 2008 because of his long stay in the corridors of power and his health condition which Nigerians don’t know. On his health condition, a petroleum industry insider submitted that “Dr.Lukman must have been really touched by the national embarrassment caused by the fuel scarcity, but I can tell you that nothing will happen to the management of the NNPC even if the scarcity lasts for another 12 months. His ties with the NNPC Managing Director, Mohammed Sanusi Barkindo can be traced years back, and besides, the old man is not exactly in good health shape to take the fuel crisis head on.” He has his excuses, though, of travelling abroad for one international conference or most often for medical check up.
His power acquisition story started when he was appointed by the then former Head of State, General Muhammed Buhari in 1984 as Federal Minister of Mines, Power & Steel. He also lobbied his way into the cabinet of General Ibrahim Babangida as Federal Minister of Petroleum Resources of Nigeria between 1988 and 1989 and as President of the Organization of Petroleum Exporting Countries (OPEC).
He was Minister of Foreign Affairs of Nigeria,1989-1990, Chairman, Board of Directors, National Electric Power Authority (NEPA), Lagos,1993-1994, Secretary General of OPEC, Austria,1995-2000, Presidential Adviser on Petroleum & Energy, Nigeria,1999-2004, Pro-Chancellor & Chairman of Council, Nasarawa State Univeristy, Keffi, Nasarawa State, Nigeria 2004 – date, honorary Presidential Adviser on Petroleum & Energy, Nigeria, 2007-2008. Chairman, Presidential Committee on Oil & Gas Reform, 2007-2008. Now he is the Minister of Petroleum Resources of Nigeria since 2008 till date.
As at the time of his appointment in 2008, it was exactly five years when former President Olusegun Obasanjo removed him as Presidential Adviser on Petroleum & Energy when he could no longer contain his failed “chicken” policies responsible for the incessant fuel scarcity between May, 1999  and September, 2003, and then the establishment of Petroleum Products Pricing Regulatory Authority (PPPRA).
Suddenly, after his unceremonious replacement with Dr. Edmund Daukoru as Presidential Adviser on Petroleum, fuel began to flow in all the filling stations as marketers embarked on fuel importation to support output of the refineries belonging to the Nigerian National Petroleum Corporation (NNPC). Within a short period, Nigerians, particularly Lagosians forgot the pains of long queues for fuel until recently. We should not forget cases of kerosene explosions in Lagos and Benin during the period and performance of the refineries below 30 per cent which led to the sack of several top shots of NNPC by Jackson Gaius-Obaseki, former GMD. This particular action was carried out by Obasanjo without his consultation. In response to the protest, he was advised to resign.
Perhaps, in some quarters these days, they prefer to call Lukman “Mr. Fuel Scarcity” and to support that label, he travelled out of Nigeria during Christmas holiday despite the directive of the then Vice President, Goodluck Jonathan that he should stay back during the holidays so as to ensure improvement in fuel supply. His cronies that cut across both upstream and downstream sub-sectors of the Nigerian oil and gas industry fear him like God to avert his wrath on suspicion of disloyalty. And to compensate loyalty, he is good at giving them appointments that will sustain the relationship. One of such loyalty appointments recently was the confirmation of Dr. Bello Gusau as executive secretary of Petroleum Directorate in January 2009, even though the National Assembly is yet to pass into law the Petroleum Industry Bill (PIB) that gave birth to the directorate. Today, Gusau, a member of the Oil and Gas Implementation Committee (OGIC) is a senior government official managing an illegal office not approved by law yet.
Another beneficiary of Lukman’s loyalty is Dr. Barkindo Sanusi Mohammed, GMD of NNPC, who was technical assistant and later acting secretary general of OPEC. The controversy still rages in the petroleum ministry over his appointment by Lukman as governor of OPEC along with his position as GMD of NNPC. This position since joining of OPEC by Nigeria is reserved for the permanent secretary of the Ministry of Petroleum Resources. And for protesting against the appointment of Barkindo as governor, the former permanent secretary was redeployed and later retired last year. It is also good for the record to mention the recent appointment of former Head of Media at OPEC secretariat in Vienna, Austria of Mr.Umar Farouk as his special assistant on media and communications. The appointment, according to industry sources, is temporary because the actual target is for him to be the spokesman of the NNPC.
To ensure that he has his boys in control of the downstream sub-sector, Dr. Abiodun Ibikunle, technical assistant was also appointed recently as the executive secretary of PPPRA. And that is why the ostentatious stakeholders forum organized by the NNPC having Lukman as Chairman barely a week after the forum organized by Mr.Odein H. Ajumogobia, Minister of State for Petroleum Resources, who was saddled with the responsibility of downstream sub-sector a week before the departure of Yar’Adua for medical treatment in Saudi Arabia. However, three weeks after the forum, Nigerians now stay longer at the filling stations to queue for petrol.
And for those that refused to play along with him, the reward is denial of appointments. Indeed, he always ensures they are far from getting any key position and that is the case of Dr. (Mrs.) Donu Kogbara, former member of OGIC from Rivers State.
If his refusal to honour  the invitation by the Senate on four occasions and the fine of =N=4,000 he was asked to pay last year is an indictment that will remain in his file, what will be the fine for supporting the NNPC to create shortfall in fuel supply? If in reality, it is clear that NNPC can only supply 47 per cent of the daily demand requirement of fuel, why will Lukman support several lies of former TV talk-show hosts on NTA – “The Sunday Show,” Dr.Levi Ajuonuma, Group General Manager (Public Affairs) that the corporation has 31 cargoes of fuel on the high sea when there is actually none.
If all is well in the oil industry, National Assembly should ask “Mr. Fuel Scarcity” why NNPC cannot support multi-national oil companies in early completion of damaged gas pipelines after the amnesty deal so as to increase gas supply to the power generating stations of the Power Holding Company of Nigeria (PHCN)? It is clear that the failure of the Federal Government to achieve 6,000mega watts (mw) target on December 31, 2009 lies with the NNPC under the direct supervision of Dr.Rilwan Lukman. He should be held responsible for the failure of the 6,000 mega watts (mw).
At this stage, what is good for him is to resign voluntarily because when the pressure of problems created by his expedition for power becomes too much for him with his fragile health condition, the beneficiaries of his office, would not be able to help him hedge on to power. The sudden withdrawal of support by former President Obasanjo for Yar’Adua should serve as a lesson.
The feeble Dr.Rilwan Lukman will do better as an adviser and therefore it is better for him to join the Eminent Elders Group and allow talented, skillful, agile and energetic young Nigerians like Kola Karim, Femi Otedola, Uche Ogah, Sayyu Dantata and the amiable Wale Tinubu to manage the petroleum industry. He should stop providing cover for NNPC in the mismanagement of our crude oil resources. There are several Nigerians from the North if Yar”Adua must insist on producing a Minister of Petroleum for the region. And that is why the Senate should take the lead to sustain the plans to move Nigeria forward by taking a cue from the success of Oando PLC, Shoreline Energy Int’l by young Nigerians. The hope of Lukman lies in the quick recovery of the ailing President for him to remain in office. Lukman should quit the stage while the ovation is loudest.

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CHEVRON CORPORATION BACKS OUT OF SALE OF CHEVRON NIGERIA TO DANTATA

When on 19 September, 2008 the media relations unit of Chevron Corporation USA circulated a press announcing that its subsidiary, Chevron Africa Holdings Limited had agree to sell Chevron Nigeria Holding to Corlay Global SA, the press release carried a caveat in compliance with the Cautionary Statement Relevant to Forward-Looking Information for the Purpose of “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995.

The cautionary statement informed readers that:

“Some of the items discussed in this press release are forward-looking statements about Chevron’s activities in Nigeria. Words such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “projects,” “believes,” “seeks,” “estimates” and similar expressions are intended to identify such forward-looking statements. The statements are based upon management’s current expectations, estimates and projections; are not guarantees of future performance; and are subject to certain risks, uncertainties and other factors, some of which are beyond the company’s control and are difficult to predict. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.”

The caveat may just be appropriate because in the wake of the announcement of the agreement of sale of the downstream operations of Chevron Nigeria to Sayyu Dantata’s MRS, the intensity of the legal battle which had dogged the process of bidding for the 60 percent holding of Chevron Corporation held through Chevron Africa, moved some more notches and in the light of this, it is believed that the Chevron is considering appropriate channels to announce a reversal of its announcement.

Femi Otedola, Zenon Oil and Gas and Africa Petroleum Chairman had secured an injunction at a Lagos Federal High Court restraining Chevron from selling the 60 percent holdings without recourse to his 19 percent minority holding which, he claimed, may be jeopardized if the contested 60 percent holding was sold to another bidder who may lack the required expertise and resources to profitably operate the business.

Despite the injunction, Chevron parent office in San Ramon in the United States of America had gone ahead to announce the agreement to sell to Dantata’s company in defiance of the court order. Industry insiders reasoned that the announcement might have been a pre-emptive move to undermine the legal process in Nigeria. But beyond this consideration, industry insiders have argued that Chevron must have been emboldened to make the announcement in consideration of the influence of the backer of Sayyu, a profiled wealthy industrialist whom Chevron believes could pull the right strings in Nigeria to side-step the court proceedings and to also get the backing of the political power base in the country to talk Otedola into surrendering his claims to Chevron.

As was expected, Otedola initiated, through his lawyers, contempt proceedings against Chevron at the Federal High Court but last week Wednesday, he dramatically applied to withdraw the contempt proceeding in the court. This had sent some confusing signals to a growing population of the bid for Chevron.

A source close to Otedola, however, informed that the withdrawal of the contempt charge was strategic.

“The contempt proceeding had to be withdrawn because it may turn out to be a distraction from the main issue of the case.” The source said.

Another source believes that application to stop the contempt proceeding in court may not be unconnected with new revelations that Chevron Corporation, the parent company of Chevron Nigeria may have, indeed, stalled the process of transfer of the 60 percent holding in Chevron Nigeria to Dantata’s MRS in part, because of the on-going legal tango, and in part, because the required sum of money to consummate the purchase have not been made to it.

“The fact is that most Nigerian banks that are supposed to finance the acquisition have backed out, so it’s as if it is difficult to raise the fund locally.”

Any one of the two reasons for the reported abortion of the sale agreement might have thrown the spanners into what the initiators of the MRS bid for Chevron had planned by way of making the Nigerian public pay indirectly for the funding of the 60 percent shares of Chevron Nigeria.

“The strategy to my mind is simple. If the banks financed the acquisition of Chevron, it would have been easy for Sayyu and his backer to pay back the banks simply by selling 25 percent of the holding of Chevron to Nigerian investors through the Nigerian Stock Exchange. This way, they will still hold majority holdings in the company and they would have used money raised from ordinary Nigerians to pay back the money the banks used to finance the initial acquisition.” The source reasoned.

Meanwhile, Chevron has also made public its intention to sell its downstream operations trading under the Caltex brand name in Kenya.   According to AP, the front runners eyeing Chevron’s elaborate retail network include State-owned National Oil Corporation of Kenya and Gulf Africa Petroleum Corporation (Gapco). The two control a paltry 3.65 per cent and 2.65 per cent retail market share respectively.

Speculation is also rife that the cash-rich Oil Libya is equally an interested party, perhaps seeking a foothold in the Mombasa-based Kenya Petroleum Refinery Limited (KPRL), which has been much sought after by big multinationals, and is partly owned by Caltex.

The law, as spelt out under the Kenya’s Energy Act, requires Chevron to notify the Energy Regulatory Commission (ERC) of its intention to divest or transfer the licence to another oil marketer.

Previously, only the Treasury was notified in the event of divestiture by any firm.

“If the sale of Chevron will be through competitive bidding, this process may take some time to be concluded,” said Mr Peter Nduru, Head of Petroleum at ERC.

Treasury is reportedly pushing for Chevron to sell off only its Kenyan business unit to National Oil, despite plans by the global petroleum giant to sell its Kenya and Uganda operations as one bundle.

The AP report, however, observed that unlike in Kenya, this sale transaction on Chevron Nigeria was closed quickly when Chevron Nigeria hurriedly announced the agreement to sell to MRS.

BETRAYAL! WHY OTEDOLA, DANGOTE FALL APART

The prospect of Mr. Femi Otedola and Alhaji Aliko Dangote engaging in direct business competition is already exciting Nigerians across the economic strata.

Until about two months ago, Otedola and Dangote have been known to be buddies in both the social and business senses. A source that had trailed the relationship between the two observed that though Dangote had had preeminence in the nation’s economic sphere before Otedola, but as soon as Otedola emerged in the big league of business owners about six years ago, he and Dangote became a pair both in public places and business alliances.

 In the early days of Transcorp, Otedola and Dangote were on board of the company, positioned back then as Nigeria’s answer to the dominance of the multinationals. Perhaps the most high profile business alliance between the two was the Blue Star Consortium, a special acquisition vehicle the two had used to acquire controlling stakes in the Port Harcourt and Kaduna Refineries. The acquisitions, were, however, revoked soon after Alhaji Umar Musa Yar’Adua assumed the office of the nation’s president.

Beside, though Dangote is known to be the face of Obajana Cement Company, a cement manufacturing concern propositioned to be the biggest in production capacity in Africa, Otedola, his friend has also been mentioned to be part of Obajana in terms of stake holdings.

But now, it would seem that the business collaboration between the two may have been put under pressure arising from what sources close to the very moneyed men describe as betrayal of trust.

 “I think it all has to do with the battle to acquire Chevron Plc, the downstream arm of Chevron Oil and Gas in Nigeria.” A source close to the two said. “Of course, you know by now that Femi had an intense interest in the acquisition of the company. The benefits to him were obvious, if he had acquired Chevron, he would have become the indisputable dominant operator in the downstream sector of the oil and gas industry. He would have merged Africa Petroleum, (a downstream behemoth in its own right after it was merged with Zenon) with Chevron Plc. With the two you can only imagine Femi’s competitive edge in the market place” The source revealed.

“Before the divestment of Chevron Oil and Gas from Chevron Plc was made public, Femi had apparently got information on the move and had shared his desire to buy Chevron with his friend, Dangote. I know that initially, Dangote was all in support of the scheme by Femi to acquire. But that was until Sayyu Dantata came into the picture.” The source said.

Sayyu Dantata, aside being a former business protégé of Dangote, is also related to Dangote, so it would seem natural that the balance of emotions by Dangote would tilt in favour of Sayyu.

“As it turned out, I am not too sure if Femi thought along that line. At least, he and Dangote had been at the Chevron thing for a while so there would have been no suspicion of Dangote’s shift of loyalty. So as the negotiation and bidding for Chevron proceeded, Femi constantly updated on his next moves and strategies. As issues evolved, he got to know that Sayyu’s MRS Group, the company that eventually won the bid was always outflanking him. The long and short of it is that there is the suspicion that Dangote might have availed his cousin, Sayyu of information Femi had shared with him.”

The same source said there had been a confrontation between the two where Dangote explained that Otedola could not have expected him to go the whole hog with him in consideration of his (Dangote) relationship with Sayyu.

“You know these people are matured men, you don’t expect them to bring their small fights to the public place, what I know is that Femi has decided to review and locate any opportunity in the economic space that enable him contribute to the economic advancement of the country. So all these talks about Femi taking on Dangote in competition by deciding to go into establishment of cement manufacturing plant is principally about expanding his business horizon. It has no direct bearing on the role Dangote played in the bid for Chevron.” The source explained.