Privatize the oil industry of Nigeria? Easier to say than to do

by Sophie BOUILLON

A major competitor in NigeriaThe presidential election next month has promised to privatize the country's oil industry, but it is a promise that may prove difficult to meet, say some observers.

The energy chamber calls on OPEC members to cut back on their production

Atiku Abubakar, the opposition party's main candidate, pledged to dismantle Nigeria's National Petroleum Company (NNPC), which he described as a "mafia organization".

The NNPC and other state-run organizations have been widely criticized for having served as a makeshift fund to successive governments, particularly in the run-up to elections in the state of Nigeria. OPEC in Africa.

Abubakar, vice-president of Olusegun Obasanjo between 1999 and 2007, made his last remarks at a conference on the economy in NigeriaThe economic capital Lagos last week.

"I said that if we do not dismantle these mafia organizations, we can not progress, we will privatize them," he said.

"I am engaged in these privatizations, as I have said. I swear that even if they will kill me, I will do it.

The current President, Muhammadu Buhari, who is running for a second term, has made the fight against corruption a cornerstone of his first election campaign.

His badistant minister of oil, Emmanuel Kachikwu, told AFP: "In terms of corruption, he (Buhari) has done his best."

– Climate of fear –

But it's Kachikwu himself who denounced late 2017 what he called the "climate of fear" at the heart of the NNPC since the president appointed one of his close badociates, Maikanti Kacalla Baru, general manager of the group.

Last April, he also spoke out against public subsidies to reduce the cost of fuel for motorists, claiming that it cost the government $ 3.9 billion a year.

In fact, the NNPC, which totally controls the distribution, has been accused by many activists of overestimating the number of liters used by an exorbitant amount in order to make more money for the government.

"The NNPC monopoly on fuel distribution is not an ideal situation and will have to stop," said Kachikwu.

"And then some of the corruption in the region will also end."

But he warned: "If we do not solve the problem, we will go bankrupt."

Kachikwu reports directly to Buhari, who, in addition to being the head of state, has himself taken over the Minister of Petroleum's portfolio.

Buhari is about the same line of fire as his main rival, Abubakar.

At an election campaign meeting on Wednesday, Buhari promised a redesign of the NNPC to recover billions of dollars of looted public funds.

Kachikwu entered Buhari's government as a novice in politics but as an expert in the field. He previously held the position of Deputy Chief of ExxonMobil for Africa.

He believes that to reinvigorate the country's oil industry and bring production to four billion barrels a day, it would need to invest between $ 25 billion and $ 30 billion.

According to him, the only way to achieve this goal is the privatization of the NNPC and the liberalization of the sector as a whole.

"Nobody needs the government to do its business," he said. "The NNPC oversees the entire production chain, from pipelines to export or distribution."

It also seems powerful enough to have successfully blocked all political attempts to reform an organization that carries about a million barrels a day, or 50% of the total volume of oil production of Africa's largest oil producer.

– Campaign discussion –

"Talking about the privatization of the NNPC is a campaign discussion aimed at foreign investors," said Benjamin Auge, an badyst at the French Institute of International Relations.

But it is not a vote and has no impact on the real root of corruption – the granting of gas rights, he added.

Each year, the NNPC badigns a series of traders to crude oil exports. And each year, with each successive government, new names or new companies, sometimes completely unknown, appear on these lists.

The rapid enrichment program could be limited by the creation of a new local refinery, promised by Nigerian billionaire Aliko Dangote, several times, which would reduce crude oil exports.

The refinery, announced for the first time in 2013, would produce 400,000 barrels of gasoline per day, compared to 100,000 currently.

"But the lobby of the traders is so powerful that one can even doubt that the project will see the light of day," said Auge.

This example of the strength of the oil lobby – and the huge sums of money involved – casts doubt on politicians' claims that the NNPC can be dismantled as easily as voters and investors would like.

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