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Mrs. Diezani Alison-Madueke needs no introduction. She has the unique distinction of holding a ministerial post for eight unbroken years under two successive administrations. But it was her tenure as the Minister of Petroleum Resources from 2010 to 2015 for which she would be most remembered. In her position as minister and Chairman of the Nigerian National Petroleum Corporation, her tenure was riddled with controversies, allegations of corruption, mismanagement and opacity that would take years to live down. She was deemed aloof, inaccessible and an absentee minister who was hardly at her desk. She was reviled and blamed for much of the ills – real and imagined – of the oil and gas sector.

But in this rare, unrestrained and unsparingly brutal two-hour interview with Ijeoma Nwogwugwu, she finally addressed several of the questions that had been begging for answers. Among other issues, she spoke on her accomplishments and the structural problems of the petroleum sector, Emir Mohammad Sanusi II and the $20 billion question, the PwC forensic audit, her attempts to turn around NNPC and its exploration and production subsidiary NPDC, the efforts to end the fuel subsidy regime and privatise the refineries, the contending forces and personalities whom she came up against as minister, her stand off with the National Assembly, her current absence from the country, and the general perception and rumours that swirled around her stewardship. Excerpts:  
There have been so many things said about the Petroleum Ministry and the Nigerian National Petroleum Corporation (NNPC) – about the corruption, inefficiency and what have you – during your stewardship. What were the major challenges and why was it difficult to transform NNPC to become self-sustaining financially and better positioned to become a truly national oil company?
I think that quite clearly in terms of NNPC, we strove from the beginning due to the historical challenges that NNPC had. As you know, over the past 25 years, NNPC has been severally known to have a non-transparent opacity about the way and manner in which it does its business. Some of these might be perceived, a lot of it also real. So when we came in 2010 to 2011, the intent was to very quickly look at ways and means to open up NNPC in particular, because NNPC is the core parastatal with operational and legal parameters binding it.
The NNPC Act gives it operational independence and gives the Group Managing Director a lot of powers as well. So we moved very quickly to try and ensure that we moved it towards what we would consider an entity that operated along private sector lines. In other words, we tried immediately to move it, even with our first reform processes, before we even went into the Petroleum Industry Bill (PIB) to try and pull out areas that were inherent in the original PIB for reform processes. Some of the measures such as the Gas Master Plan, Local Content Act, amongst other areas, were introduced. I think we did that all very successfully and we immediately ensured the passage of the Local Content Bill and moved aggressively to establish that, against a lot of push back from multinationals and other established oil and gas entities, especially the foreign ones.
We opened up the sector to ensure that hundreds of Nigerians came into the downstream sector and that so many areas hitherto handled by foreign subsidiaries were taken up by Nigerian marketers in the downstream service sector. The number of marine vessels owned and operated by Nigerians rose substantially, the number of rigs owned by Nigerians rose substantially, pipeline fabrication, pipe mills and other varied areas of supply and fabrication within the downstream sector also grew, such that over 300,000 direct and indirect jobs have been created over the last four years. In the same vein, we ensured that our support for local content also permeated the upstream as well, such that for the first time in history, companies and multinationals such as Shell, Chevron, etc, began to divest their producing assets to Nigerians within the upstream operating sector who could actually take on those assets and who could actually meet the very stringent fiscal terms needed to operate those assets and also take up those area of intense capacity building and expertise to begin to operate in the Nigerian upstream market.
Not exactly. To some extent, originally, many of the multinationals wanted to get out of some of their onshore producing assets because of the militancy, but particularly because of the communal issues which had plagued the oil and gas industry in the last 30 years and more. But in this instance, a number of the multinationals were now veering into the deep offshore which has much more optimal potential for them in terms of production volume, cost, etc, and wanted to move out of these onshore blocks or out of the shallow offshore blocks which they felt were no longer optimal in terms of production and it was in these areas that they were prepared to have Nigerians come in.

With the support of government, for the first time, we were able to push quite a number of indigenous acquisitions in this area. You will recall that these were pretty much headed by the Seplat acquisitions which was signed off finally when we first came on board in 2010, Afren, etc. So we were very pleased that we were able to support Nigerians both in the downstream sector and also in the upstream sector in terms of acquisition of these blocks which no doubt will continue in the short to medium-term as we continue to move forward. This is very important because these are not marginal blocks, these are actually producing entities; as you acquire and you come up to speed, and you are already putting production volumes into the market. So that was on the one hand.
On the other hand, we moved straight into the Gas Master Plan and pulled it out of what was originally the PIB. Now, the Gas Master Plan when we pulled it out ensured that we began to look at things from a very structured way of how we deploy gas, and gas infrastructure particularly for the purpose of supplying domestic gas in Nigeria because it was quite clear that over the years, government had sort of gotten it wrong in terms of domestic gas. Whereas we were doing very well in terms of our export LNG potential and the revenue derived from that, in terms of domestic gas, we had not put infrastructure in place to even pipe that gas to the various independent power plants (IPPs) which were to come on stream over these next few years and in fact as you know, have been coming on stream over the last few years. So we came in 2010- 2011 to find out that there was no infrastructure for our gas pipelines and we therefore had to go backwards and begin to ensure that we established that pipeline infrastructure and over the last four years, we have put in place almost 500 kilometres of gas pipelines without which we could not possibly begin to service all the requisite independent power plants with the required gas that we were trying to ensure goes from gas-to-power. Now, because this was not done when it should have been done, which should have been in the last seven to eight years, it meant that we were working backwards and we engaged entities such as the International Finance Corporation (IFC) to help us with the feasibility studies and later on to bring in financiers for investment purposes in the pipeline infrastructure.
And so far, we did pretty well with that and by 2018 we expect that another 500 kilometres of pipeline infrastructure would be in place and that every major IPP should be linked up to the requisite pipeline infrastructure across the country. We also have major, and I think historic tranches of pipelines such as the Obibi 3, the AKK pipelines and others, which are now either in place or being put in place, and should be put in place in the next three to four years. It is expected that if we maintain the current state of pipeline infrastructure, by 2018- 2019, Nigeria would be almost completely linked up to the gas pipeline infrastructure network in terms of gas-to-power, assuming all other factors on the power side – transmission, distribution, etc, are adequately taken care of, so our power issues should be a thing of the past.
Again, on the gas side, we did pretty well in terms of the basic domestic gas tariffing and pricing; it was a fundamental area we had to address from the beginning and as you know we went into various areas of tariffing to ensure that we got to a point where our gas pricing for domestic gas was competitive with anywhere else in the world. That was to ensure that multinationals and other suppliers of gas would be in a position to come on board and supply the necessary volume of domestic gas for gas-to-power and also for gas industrialisation which was beginning to move on as well. We also went into a historic first time discourse with NERC (Nigerian Electricity Regulatory Commission), the Power Ministry and the CBN (Central Bank of Nigeria) to ensure that N36 billion in legacy debt that was owed to gas suppliers and was holding us back, was also cleared by the CBN. So in terms of gas, a lot has been done and like I said, a lot would be done if we keep up this pace over the next four years.
Also, we moved from January 2012, when we realised the problem we were going to have in the sector and this was to try to move away from the areas where we thought there was inherent corruption and non-transparency in the sector. And one of the key areas from the time we came in, was the area of subsidy payments. We said from the beginning that the subsidy on petroleum products was not addressing the root cause of the problems that it was put in place to address. What we found when we came in was that the middlemen were acting as the fat cows and they were usurping the benefits of the subsidy we were paying and in many cases, there was major round-tripping taking place and the actual man and woman on the street buying those products were not getting the products at the subsidised price that they were expected to get it at. In view of this, in November 2011, I signed to remove 92 throughput marketers from the list of PPPRA (Petroleum Products Pricing Regulatory Agency), through whom PMS (petrol) allocations were made because it was becoming clear to us that among these throughput marketers, it appeared that round-tripping, among other sharp practices were taking place.
By January 1, 2012, I had directed, with the approval of the president, that the Executive Secretary of PPPRA move for complete deregulation, meaning that subsidy would have been removed entirely and with it, the scourge of corruption and opacity that had followed it all these years. We moved for complete deregulation to also ensure that the funds that were entrapped in the economy for subsidy which actually do not get to the bottom-line users would then be deployed for critical things in the economy such as health, schools, and others. And this is a standard case everywhere in the world, as it is stated very clearly that subsidies, in general, are not fiscal processes that are useful to the bottom-line polity in any economy. Unfortunately, even though we moved for complete deregulation, there was a complete push back again on it within the polity and we were not able to completely deregulate, although we achieved partial deregulation.
Again, there was an area where there was clear malpractice, clear corruption being meted through this process and again we moved to remove it at that time. We moved from that very speedily again by trying to reform NNPC, so we revamped the PIB in 2012. I sat nights and days with the committee handling the PIB in a bid to create a bill that will truly unbundle NNPC, which would for the first time create a national oil company that could operate along private sector lines, that would have private equity holdings, that would ensure that NNPC or the national oil company would have to answer to the Nigerian people in terms of its equity shareholding and because of that, would have to operate like every other competitive private company – it would have to make its revenue, its profits and its books would be open for the entire country to look at and peruse. I thought that would be the clearest, direct and most aggressive way to entirely remove or cut to the barest minimum, the age-old scourge regarding NNPC’s corruption, its non-transparency, its opaqueness, etc, and indeed, the PIB would have done that.
Not only did we do that, the PIB would have created two regulatory bodies with only dotted line answerability to the minister. In the current organogram, the Department of Petroleum Resources (DPR), which is the regulatory body, reports directly to the Minister of Petroleum or to the Ministry of Petroleum Resources. We felt it was not proper and that just like NERC, we should have an upstream and downstream regulatory body that only has dotted line reporting to the minister. We created an Asset Management Company, which would hold the joint venture partnerships and assets and we felt that should have a new shareholding as well. We tried to do everything possible to ensure that the various units we created under the PIB would clearly and very concisely unbundle NNPC completely so that the corporation that we see today will no longer exist and that in fact, the various elements we would see would be elements that are private sector-driven, open and transparent. So these were all areas that we moved very aggressively on from the beginning of this administration and it was our hope that once these areas moved forward, they would have created not only sustainable structures, both in terms of revenue, policy and process framework for the industry, they would clearly have created a completely new framework in terms of the way a national oil company operates for Nigeria in terms of sustainably into the future.
Let me also add that even in terms of the refineries and refined products for Nigeria which has been a major problem for us over the years in terms of the optimisation of our refining capacity and the run down state in which we found the refineries when we came in between 2010 and 2011. When we looked at the situation and digested it in every possible manner, it was found that just like the power sector, government has no business being in major areas of infrastructure such as refineries. It is inefficient for government to be there.
So while government should in fact hold a certain percentage, in terms of its ownership structure so that it has a stake in the refineries, these refineries should be opened up to private sector entrepreneurs who can take them and run with them, and create them into models of private sector efficiency for the benefit of the nation in terms of refined products deployment in the short, medium and long-term. Accordingly, we moved in 2013, prepared the framework for the privatisation of the refineries to ensure that indigenous players could come in and turnaround our refineries, recreate them and begin to give us the needed distribution and supply of products. With the president’s approval, we moved on this aggressively. Unfortunately, as we tried to deploy it, there was a major push back again, this time from the unions, who were completely against the privatisation of our refineries and as you can see, over the last one-and-a-half years, it has been difficult to optimise the usage of the refineries because the funding to invest in them from the government side is just not there. And unfortunately, we have seen over the last one year, a drop in the price of crude oil by almost 50 per cent, which means that our funding level has almost been depleted.

On top of that, there have been rising cases of vandalism and sabotage, even more now than oil bunkering, because bunkering has reduced. But this vandalism means that for a great period of time, the multinationals and others would have shortened and deferred production, meaning that our volume of production continues to remain low. That has of course affected even our excess crude savings and our budget. So these are all the areas that we had zoomed in on in terms of trying to ensure that we opened up NNPC and created a much more transparent and competitive oil and gas sector.
Unfortunately, as I pointed out, on virtually every of these fronts, we were pushed back very strongly and aggressively by the same polity that we were trying to protect by moving forward with these major changes in the fabrics of the oil and gas sector. Having said that, even with the major push back on the PIB which has languished in the National Assembly for two years, we still were able to carry out reforms in the gas sector through the Nigerian Content Act and supported Nigerian operators and marketers as aggressively as possible to ensure that in most areas in the oil and gas sector there was actually a boom in terms of the presence of Nigerian downstream service providers and operators.
You said there was considerable push back even with the PIB, what led to this push back? Was it political by certain interests in the National Assembly or was it commercially driven by the IOCs (International Oil Companies) and their governments and why couldn’t you do more to get it passed into law as the minister; after all, it was your bill?

I think this was one of our biggest setbacks over the last four years, considering the fact that we put so much effort into the PIB to unbundle NNPC in all of its ramifications. The push back I think was a hydra-headed issue. On the one hand, the multinationals, of course, were not happy with the new fiscal terms we were putting on the table. Those fiscal terms were based on the fact that the 1993 production (sharing) contracts signed by Nigeria were extremely punitive towards Nigeria. It meant that higher revenues from the deep offshore, which we should have been enjoying now as a country, we are not enjoying.
The 1993 production sharing contracts meant that we were getting very little revenues back from the production sharing contracts in the deep offshore and these are highly profitable contracts. So we tried to change the fiscal template to ensure that Nigeria gets a bit more in terms of profitability from the production sharing contracts, and that was the major bone of contention. We did not actually change the template of the joint venture returns or equity returns. We left those ones. It was the production sharing contracts that the multinationals worked against. Even at that, I issued a directive that NNPC and the committee should sit down and take a closer look at the concerns raised by the IOCs. But at the time this was happening, the bill was already before the National Assembly.
Now, of course, there would be many other interest groups with a bill as far reaching as the PIB. A bill that is as far reaching as far as the communities and other stakeholders, both national and international, has so many interested parties. So it is very difficult sitting in one place to pinpoint the interested parties and the areas that were set up against the bill. We worked very hard on that bill and I made sure what we put forward was the best at the time. Unfortunately, like I said, once it (PIB) leaves the executive, it is no longer under my control. So the moment it moved from Mr. President to the legislature, I had no control over it. All we could do was to offer any assistance in resolving areas where there were unclear issues with the National Assembly if they so required. Beyond that, it is virtually illegal for me as Minister of Petroleum Resources to interfere with a bill that is under the purview of the National Assembly.
But this is an executive bill and so you should have lobbied to get it passed?
Oh we continued to do that. Every step of the way, we continued to interface, we continued to have discussions and we rendered ourselves available for any interaction on the PIB. But despite that and despite many meetings on the issue, it still remained unpassed by the National Assembly. Like I said, beyond all these areas of trying to support and assist, it was out of my purview to do anything other than what we tried to do to push the bill through.
Back to NNPC, you said you tried to introduce a number of reforms, but in spite of your best efforts, the parastatal could not rise above certain issues. There was the allegation of the missing $20 billion made by the former CBN Governor. Don’t you think that some of these allegations had to do with the fact that there was institutionalised corruption, mismanagement and insufficient transparency in NNPC, which you chaired as the Petroleum Minister?
I agree completely and again this goes back to what we tried to do from the get go when I came into the Ministry of Petroleum Resources. Like I said, from the moment I came in, I looked at the historic precedent set by NNPC and the fact that over the last 25 years, NNPC has been majorly seen as a corrupt, not transparent, opaque institution and that was why I moved aggressively to try and open it up as quickly as possible, and to truly reform the NNPC. Right now, the NNPC is not a competitive organisation and it cannot be a competitive organisation unless it is run along private sector lines, is profitable and is made to compete against other similar entities, not only in Nigeria, but in other parts of the world as well for it to be able to stand.