‘Challenge In Oil And Gas Industry Is Attitudinal’ | Independent Newspapers Limited
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‘Challenge In Oil And Gas Industry Is Attitudinal’

Dahiru Mohammed
Posted: Jul 5, 2016 at 5:45 pm   /   by   /   comments (0)

The Executive Chairman of Damagix Nigeria Limited, an indigenous service company, which is dedicated to the provision of services to the Nigerian oil and gas industry, Mr. Dahiru Mohammed, in this interview with CHARLES OKONJI and CHINYERE ABIAZIEM, explains some of the challenges facing the petroleum industry.


Since President Muhammadu Buhari assumed office, he has taken some steps, which are presumably believed to be a reform of the oil and gas industry. As an expert in the industry, how would you evaluate his reform agenda in the industry?

The fundamental thing in my belief in a system like Nigeria and with all the attempts by the president and federal government to restructure NNPC is that the situation is not the structural problem. Our problems are largely attitudinal. It does not matter how a structure is, but if the attitude is not right, it is not going to work. To me I say it wherever I can that I would rather spend all the energy and time that I have in changing the attitude of workers of the oil and gas industry, including the workers in the Nigerian National Petroleum Corporation (NNPC).

One thing I asked NNPC senior executive to tell me is: what is wrong in the structure of NNPC today? He has no answer for me. It is said the problem is not the structure, but you are the same destroying the so called structure that is going to operate the new sector. So, clearly in my mind, the government or anybody who wants to bring changes in this country must change the attitude of the workers. As a matter of fact, I do not see anything wrong in the structure. What is wrong is the approach in operating that structure. It is like putting a square peg in a round hole. You have people posted in places where they do not know what to do. It does not matter the beauty of the system, it takes people to maintain the structure. So, more time should be given in changing the attitude of the staff.


The Petroleum Industry Bill (PIB) is believed to restructure the entire oil and gas industry, which is why experts are agitating for it. Don’t you think it will restructure the industry?

It will certainly. I agree with that. I must give in that there are certain structure requirements that are not paramount. The issue is that even if you have the PIB, we are going to talk about local content. The people operating the system have to work in line with the PIB laws and regulations. If they don’t want to do it, then there is not going to be efficient.


The multinational oil and gas companies are seen not to be buying the idea of PIB, as they tend to object to a lot of provisions there. How would you react to this?

It is very simple. It is still an issue, of course. In a few fora this issue came up. The oil and gas industry is a business operation. They want to take most of the profit. It is left for you, the other party, to ensure they do not take it. So, both parties want the bigger part of the cake. I do not blame the oil companies doing what they are doing. If we are to sit or stand on our feet and take the laws and regulations and enforce them, the oil companies will do nothing than to abide.  The issue I once said is that no oil company wants to leave this country because they are gaining much. But we are not enforcing whatever rules and regulations that we have. We are the people giving them the room not to abide by the law and, of course, everybody wants to take advantage of whatever lapses.


The Niger Delta Avengers’ bombing of oil installations have reduced the nation’s crude oil production from 2.4 million barrels per day to 1.1 million barrels per day. What is your reaction to this and how do you think the Federal Government can tackle this challenge?

You see there is something they say, nipping a thing in the bud. That, also, is attitudinal problem. When a problem is small you tackle the problem, but when you allow it grows big, then it becomes a big problem. The issue is that of attitude because everybody in the Niger Delta region believes that the oil belongs to them. I fault that claim because oil cannot belong to them for so many reasons. It was the national wealth that was used to find oil. So if you have a business partner and you put money down at a certain level, but the person says the business is his because it is found in his area. That cannot be.

Unfortunately, Nigerians did not address this issue at the beginning when it started coming up. Rather, we were laughing at them, but now they are strong and waging war against their own country.  We should have told them, though it is not too late, that they should tell us how this oil came to be. It is national wealth. We cannot put our wealth and you come and say it belongs to you. It does not make sense; it is nonsense. Secondly, and very fundamental, I am talking now as a professional geologist. This oil has been there for more than a million years. How old is the human being?  Less than a million years. Now this oil has been there well before the human beings came to earth. You cannot say it is yours because it is in your backyard. It was only awarded to you to develop because it was created well before we were created.

For me, this is actually treason. When you go to destroy the wealth of a nation it is a treasonable offence and if I were in charge or if I were the president, I will take it like it is a war between the country and them. Some people will say dialogue. For me, dialogue does not work for some people. But then, of course, we should look at both sides. If dialogue does not work, then war with them will work. This people must be stopped and they must be educated as well. I will give you another example. I worked in the oil and gas environment before I retired. If the Niger Delta people are making accusing the companies that they are destroying their environment and their demand is that the money from oil and gas industry should be used to remediate their environment, one will sympathise with them. The whole world will rise in their support because their environment is devastated. But they are making the wrong case because they are saying the oil is theirs because it is in their backyard. Mind you, this oil is found three kilometres down the ground. So, whose backyard is three kilometers down the ground? My advice is that we use force because they are using force.


There was an expectation that Damagix would soon establish a pipe factory in Nigeria. Is that dream still alive and what is the update on it now?

The project is in comatose. The issue, of course, it has been our intention to do that even before the local content law, though we need to do it definitely. Other countries that have these mills do not have any local content laws but the challenge in this country is that it is very expensive to establish pipe mill. Though we have the market, we cannot buy the technology because of money and we cannot borrow the money because we do not have the collateral. This is the challenge actually; it has been so and it is still the same.

To borrow money to invest, we have to get some collateral. We need some 15/20 million dollars and the collateral will be equivalent to this amount. If we have that we probably would not even borrow. So, the challenge is the money to invest. We do not have the money to invest. We are hoping that if we have some major projects to do, we will set our mill; we need finance from the project either by using the projects as collateral to get the money. So, we are waiting for resources.