There are simmering concerns in Nigeria’s petroleum sector and the National Assembly over the appointments to the two regulatory agencies established by the Petroleum Industry Act, insiders have told PREMIUM TIMES, with fears that powerful individuals are exploiting access to President Muhammadu Buhari to capture the country’s more important upstream sector.
President Muhammadu Buhari on September 16 forwarded two letters to the Senate President, Ahmad Lawan, seeking the confirmation of nominees to the boards of Upstream Regulatory Commission and Nigerian Midstream and Downstream Regulatory Authority.
But two lawmakers separately told PREMIUM TIMES that there are concerns that the competencies and backgrounds of the nominee chief executives are unfitting for their respective agencies.
Sarki Auwalu, currently the Director of Department of Petroleum Resources, with decades of upstream experience, is nominated as the chief executive of the midstream and downstream commission, and Gbenga Komolafe, Group General Manager, Crude Oil Marketing Division of the NNPC, as the chief executive of the upstream commission.
Mr Komolafe had previously held senior managerial positions at Pipelines and Petroleum Marketing Company (PPMC), Petroleum Equalisation Fund (PEF), and Petroleum Products Pricing Regulatory Agency (PPPRA), the agencies merged with the downstream section of the old DPR to form the new midstream and downstream authority.
In addition to his former role at the NNPC’s crude marketing, Mr Komolafe, insiders said, is more suitable for the midstream and downstream authority. As PPRA’s operations general manager, he was credited for having successfully coordinated a seamless supply of petroleum products nationwide with multiplier sectorial effects in the Nigerian economy.
Mr Auwalu, on the other hand, is an upstream specialist, and in that area, as DPR director, established acreage management strategy and ultimate beneficial owners’ register for petroleum assets. The agency under him also launched the National Improved Oil Recovery Centre and added 3.6 trillion cubic feet of gas in reserve; recovered outstanding royalties of over $800 million owed by independent producing companies; and implemented the deepwater and inland basin act and generated additional $280 million for the government.
Yet, Mr Auwalu and Mr Komolafe were nominated for positions that do not match their respective backgrounds and competencies, our sources said.
“The president wants a round peg in a round hole,” a source familiar with the development said. “But he was manipulated and you can critically review the two letters.”
In the two letters, seen by PREMIUM TIMES, “Commission” was used in the closing prayers, whereas the PIA in sections 4(1) and 29(1) says that the upstream agency shall be known as “the commission” and the midstream and downstream agency as “the authority.”
“They perhaps knew the limitations of the president and they knew seeing ‘commission’ in the letter bearing Auwalu’s name would make him assume it was the upstream body,” one source said.
Behind the shenanigans, our sources said, are connected individuals led by Sabiu ‘Tunde’ Yusuf, regarded as one of the closest aides of Mr Buhari. Another person mentioned is Abubakar Funtua, son of late Isa Funtua, a close ally of the president. They are believed to be cooperating with a senior petroleum official and a businessman.
They are said to be bent on controlling the upstream sector, which covers the management of petroleum reserves and installations, and exploration, production, and development activities within onshore, frontier, shallow and deepwater offshore acreages as well as all the licences and commercial regulations for the upstream purposes.
However, the Sabiu Yusuf-led group is said to be “uncomfortable” with Mr Auwalu, who is said to have exhibited an “unyielding” attitude in handling regulatory matters.
“An example is the Addax (oilfield) licence issue in which DPR was overruled after having earlier revoked their licence for not meeting agreed targets,” an insider said.
PREMIUM TIMES reported how the NNPC launched a blistering tackle on its sister agency, DPR, with a strong appeal to Mr Buhari to reverse DPR’s revocation of the Addax’ OMLs and reject a reallocation to another company.
Femi Adesina, a spokesperson for President Buhari, did not answer calls placed to seek comment for this report.
Meanwhile, an official close to the Minister of State for Petroleum Resources, Timipre Sylva, said the minister was miffed by the development as he was not carried along in the process leading to the nominations.
NNPC spokesperson, Garbadeen Mohammed, did not answer calls seeking his comment for this story.
A member of the Senate upstream committee, Phillip Aduda, said his committee would consider the qualifications of the nominees when they appear for confirmation hearing to determine an outcome.