We dare NNPC to take $1.5 billion loan —Senator Magnus Abe

Senator Magnus Abe, Chairman, Senate Committee on Petroleum (Downstream), in this interview, speaks on the Petroleum Industry Bill, the plan by the Nigerian National Petroleum Corporation (NNPC) to obtain a $1.5 billion loan from external creditors, among other issues. Taiwo Adisa presents excerpts: What is happening to the Petroleum Industry Bill (PIB)?
The PIB is here in the National Assembly. It has not been slated on the order paper contrary to insinuations here and there. There is no problem, as far as I know, with the PIB. It will be treated like any other law that comes to the floor of the Senate. It is already being taken care of in the House of Representatives and it will definitely come up in the Senate.
So, there is no North/South dichotomy on the bill?
Like any other law that has the kind of impact and consequence that the PIB would have on economic life of this country, it has elicited interests across the county. It is not just North and South, there are all sorts of interests in the PIB. The multinationals have interest; the indigenous oil producers have interest; the oil-producing communities have interest and of course, every state in the country has an interest in the PIB because of the idea that it will one way or the other affect the revenue that accrues to the country. It is not a bill that anybody would take lightly. So, I see the interest of all sections in the PIB as healthy. The law is the aggregate of what Nigerians agreed upon that is binding on all of us. So, I think that whatever misgivings or interest that people have in PIB will come out and be addressed. But what I know is that almost everybody agrees that there is the need for us to take a second look at the way we have been dealing with our hydrocarbon resources in this country. I don’t know of anybody, whether from the North or South, who believes that what we are getting now is the best that we can do. So long as we all believe that there is a way we can improve on what we are doing currently, I think the PIB has a place in everybody’s heart and it is finding that place that is the challenge of legislation and that is what we are here to do.
But why is it taking so long to treat?
What happened is that, as you will remember, the day the PIB was slated on the floor was the day after the aircraft crash involving General (Owoye) Azazi and the late Governor of Kaduna State and everybody felt that it was not appropriate to discuss such an important matter on a day immediately after such a tragedy. Nobody was in the mood to talk about PIB that day, including myself. So, it was agreed that it should be stood down to another legislative day. If it were any other law, it wouldn’t have raised any eyebrows, but because it was a PIB, there have been all sorts of insinuations as to why we did not take it on that day.
So, when will it come up?
It will be introduced. By the nature of the Senate and how issues are picked, there are a lot of things that have been outstanding and I really can’t say for certain because I am not the chairman of Rules and Business Committee. But I can assure you that the PIB will come up because it is already here.
The governor of Kano State said recently that the PIB should be killed because it is against the interest of the North. What do you think?
I haven’t heard the governor of Kano say that. You are quoting him to me and I don’t think that the interest of the North is not protected in the Senate. There are senators here from the North. Definitely, at the end of the day, what we will pass will be what Nigerians agree upon and we won’t know what Nigerians agreed upon unless we discuss the issue. The PIB is important to everybody in this country and if you hear reactions from the PIB, you shouldn’t deal with extremes. Definitely, in any piece of legislation, there would be extremes, but it is the compromise positions that become the final position. Some of the oil major producers are also taking an extreme position: ‘if you pass the PIB bill, in fact we will stop investment in Nigeria.’ If you hear the executive talking, they are also having some kind of extreme position that this is the minimum that Nigerian government must get from its oil revenues. So, all over the place, people are taking positions. If any governor has a position, he can say it out, but I can give the assurance that the PIB will be discussed in the National Assembly. And at the end of the day, it is national interest that will guide our deliberations in the Senate and National Assembly, and not the particular interest of anybody. At the end of the day, what is good for Nigeria will be good for Kano. The whole idea of the PIB is to improve Nigeria as regards our hydrocarbon resources. You cannot improve the position of the country without improving the position of every state that benefits from our hydrocarbon. I don’t think there is a way that any state will not benefit from greater improvement of our hydrocarbon. For example, today, Nigeria is producing less than 2.6 million barrels per day. There are lots of people who believe we can do more than that if the atmosphere is right. If we do 4.6 million, won’t Kano get more money from that than they are getting from 2.6 million? So, it is when you take the law and apply it to the general situation of the country that you find out what is good or bad about it. But I am open-minded about it. If people are able to convince all of us that the law would be bad for Nigeria, I would not support it.
Last year, your committee conducted a probe into the regime of fuel subsidy management, but we are yet to see the report. Is the report dead?
The report has been concluded and submitted in the open, not privately. It was submitted to the Senate of the Federal Republic of Nigeria. So, as chairman of the committee, it is when I am called upon by the Senate to present the report that I will do so. When I present the report, then, you know whether I have been settled or not. But like I said earlier, it is not the place of the individual senator to determine what the Senate would discuss. That is the function of the Rules and Business Committee. The report has actually been slated twice for discussion, but we couldn’t take it. There are so many reports, bills, motions that are before the Senate. I don’t think there would be any time when anybody would say that report would not be discussed in the Senate. It will be discussed because it is a document that is with the Senate.
Can you give an insight into the report?
As far as I know, the report is a public document. If you asked the Clerk of the Senate, he could give it to you and you can look it and draw your own conclusions. You can decide whether it is relevant or not. It has been submitted to the Senate, which is a public institution. I believe by now, it is covered by the Freedom of Information Act. So, if you want to see it, you can ask the clerk of the Senate, but for us as a committee, we concluded the assignment. We were aware that the House was carrying out a concurrent investigation and we tried to avoid duplications. There are a lot of issues with the way the oil subsidy issue was being managed and what could be done to improve it. We tried to look at those things we considered the core of the challenge and tried to deal with them on a once-and-for-all basis. That was the nature of the report. Thirty-three senators sat down and looked at these issues and we came up with what we considered to be common-sense solutions to those problems and we passed on our views and recommendations to the Senate. So, at any point it is put on agenda and we are called upon to come and present it, we will do so. We have discharged our obligations to the Senate and the Nigerian people.
Can’t you give an insight into the report?
Like I said, the report is with the Senate. If you asked the clerk and you cannot get a copy, come and ask me; I will ask him.
Why are you shying away from discussing the report?  
Are you here to make me discuss the findings? I have told you where the details can be found. The report is with the Senate of the Federal Republic. Get a copy from the clerk and read it yourself. I don’t want us to keep going backward and forward. You want me to say this is what we recommended. What I would say is: get a copy of the report, read it and draw your own conclusions. It is a public document.
Are there benefits the country will derive from the implementation of your report?
It will be self-serving for me to say something like that, to the extent of our own wisdom, understanding and knowledge of what the problems are. We have made certain recommendations, one of which was that Nigeria should, as a matter of policy, introduce a first-line charge on all oil crude produced in this country for local refining, so that if you build a refinery in Nigeria, you don’t even have to talk to the government. Once you show capacity to actually refine crude oil here, it is possible. You have the right to buy Nigerian crude before people who are taking it out unrefined and that rule applies in a lot of countries, including the United States of America, but you can take it out of Nigeria. But if you have a rule like that, it would help people who are uncertain as to what the climate would be in terms of investing in building a refinery here. Are you going to actually have access to crude to fix stock to run your refinery and even in the PIB? We are going to try to push some of these things to make it legal and be backed by law because it exists in other places. So, you must add value to our crude before you can take it out and if you are prepared, you will get preference over those who are not adding value. This is a common sense solution and it will help to fire up refinery business because it will compel those who are drilling in Nigeria to invest in trying to refine in the country. So, there are lots of common sense recommendations that we have made to try to place the country in a position where we may not have to face some of these challenges again in the future. We have discharged our duties and I don’t think it will be appropriate for me to sit here and begin to analyse one recommendation after the other. We have tried to make what we considered to be commonsense recommendations.
How much is being spent on fuel subsidy now?
I don’t want to hazard a figure because I did not arm myself with that figure before this interview, but as of the last time I spoke to the Minister of Finance, she was emphatic that all legitimate claims had been met. And when I spoke to PPPRA (Petroleum Products Pricing and Regulating Agency), the response I got from her wasn’t much different from what the minister said except that certain other claims were either being disputed or processed. But those that have been cleared have substantially been paid. Now, we are hearing that NNPC is trying to take another loan of $1.5 billion to pay existing debt and we have told them in clear terms that that transaction should not proceed without the approval of the National Assembly. I don’t mind what kind of business entity that NNPC think they are, the debts of NNPC are invariably the debts of Nigeria. So, nobody has the right to commit the country to that indebtedness without the approval of the parliament. All the relevant committees in the National Assembly met and took a position that we need to be briefed on that loan before it can proceed. Last week, they were to come to explain, but unfortunately, a lot of us were not here. We could not make that appointment. We still expect to see them, but in the meantime, we have agreed that we should do a formal letter directing NNPC not to proceed with that loan without approval from the National Assembly. That is where we stand.
But the NNPC, in press statements, has defended its decision to collect that loan. Is it not late for the parliament to intervene?
We have debated this issue between NNPC and the National Assembly publicly and privately. The constitution is clear as to what NNPC is. So, to think that anybody can create a corporation that can drain the resources of the country without parliamentary oversight or approval is an illusion. And I dare NNPC to go ahead and commit this country to $1.5 billion debt without the approval of the parliament. It is not possible and we will not allow it. That argument has been overtaken by the constitution. It is clear in the constitution and the National Assembly will not allow it. If it means going to court, so be it. If they are going to commit this country to a debt of $1.5 billion by whatever means, they need to come and explain to us as elected representatives of the Nigerian people how this debt was incurred, how it is going to be paid and how it will not affect us. We must understand that before they can proceed. If you are doing something that is transparent, why should you be afraid of the National Assembly?
The NNPC believes that its business could be hampered without that debt and that could also affect domestic supply?
I am part of anything that makes Nigeria a better and organised society; that makes Nigeria a more accountable society. Nobody would say that what happens to oil can be a private business of anybody in this country. The economic life of the county depends on what happens in NNPC, so, I don’t know how the corporation can think that the country would allow them on their own to do whatever they want and nobody would ask questions. It will not happen. What happens in NNPC to that magnitude is the business of Nigeria and what is set up by the constitution to protect the interest of the country when it comes to financial and monetary matters is the National Assembly. I have read the legal opinion of the NNPC and I have responded to it. The constitution is clear on this issue.
What will happen now that the NNPC appears bent on taking the loan?
When it comes to contention between institutions, sometimes, maybe it is good to challenge one another and you discover the limits of your powers. So, if NNPC wants to challenge us in the National Assembly, they are welcome to try, but our position is clear: don’t go ahead without explaining to us exactly how this will benefit Nigerians and how this helps us as a country.
Last year, your committee also went on oversight tours of refineries, how far with local refining now?
Let me use this opportunity to commend NNPC on the improvement on the refineries over the past one year. If you go back now, you will be impressed as to the sustained capacity that the refineries have achieved since we had those interactions with NNPC. They have focused a little more to increase their output. Those are the reports we have gotten and we intend to go back and verify some of these things.
Let’s talk about your state and 2015. How is the zoning arrangement working out as regards the gubernatorial contest?
I am not in the position to discuss zoning matter for obvious reasons. First, zoning is not provided in the constitution of the Federal Republic of Nigeria, the political party that provides for zoning is the Peoples Democratic Party. Other political parties may have other arrangements, but within the PDP, zoning is provided for and it is only the party leadership in the state that can say what has been zoned and what has not been zoned. So, as I sit right here, I am not in a position to speak on that.