Port Harcourt Spectator Newspaper recently had an exclusive interview with the Rivers State Commissioner for Energy and Natural Resources, Dr. Peter Medee where he explained issues surrounding the State Gas Master Plan and other activities of his ministry.
Excerpts
Can you tell us about your ministry?
Medee: This ministry is divided into four operational departments. We have the Petroleum Department, the Natural Resources Department and the Safety and Conflict Resolution Department. Although like every other ministry we have the department of planning, research and statistics. We also have the department of administration; we also have the accounts department. Then we have the Permanent Secretary’s Office and Commissioner’s Office. These are the structure of the ministry. The first four are the operational departments of the ministry while the others are the administrative departments. Now let me take the departments’ one after the other. The petroleum department deals with everything that has to do with petroleum products. There we have to monitor to see that every player in that sector is complying with the regulations and guidelines as specified by the Department of Petroleum Resources (DPR). Like you know, most of the items of this ministry are under the exclusive list and that means that there is very little we can do. Hence we try to work with all federal agencies and we relate more with the DPR. The Gas Department is also a sister department to petroleum. You could recall we always hear of oil and gas, that department also depends on the activities of federal agencies in the state. But as a state we have been able to develop a gas master plan. The idea is that there are a lot of deviations from fossil fuels and petroleum which is kerosene to gas especially for cooking and other related activities and power. Now, from the Gas Master Plan, Rivers State is divided into two franchise areas. We have one franchise areas that covers from Trans-Amadi down to Nigeria Ports Authority (NPA, Reclamation, Choba and the Greater Port Harcourt City. Then from Onne down to Petrol Chemicals, refinery up into main Port Harcourt and up to UTC junction is also the other franchisee area. The first franchise area is being handled by the Central Horizon Gas Company (CHGC) and Oando Power while the other one is handled by SHELL Nigeria Gas. Now as we speak, the CHGC already have a 17kilometer pipeline from Trans-Amadi that criss-cross the state, supplying gas now to most of the companies. So most of the companies operating in Trans-Amadi area such as PABOD Breweries and virtually all the companies are powering their equipment, ovens and all other apparatus of productive activities from the gas of the Rivers State Government including the BUA cement.
Interjection: And that’s a lot of revenue for the state government?
Medee: Yes that’s huge not just in terms of revenue but also industrialization. Most industries strive on gas and so when you hear Lagos is booming, this company has done close to 200km of gas round Lagos for which the companies in Lagos are using. So here we have about 17km, producing about 50 million cubic metres of gas every day. So you can see the effort the state has done in the area of gas. So beyond the flyovers that people are seeing, beyond the health facilities, the efforts in urban renewal, the efforts in the educational sectors that people can see physically, His Excellency, the Governor of Rivers State, Chief Nyesom Wike has done so much in terms of productive activities of the state because most of these companies would not have been here if they have not had this alternative source of generating power for their productive activities. Also, one thing that has been seen globally in most industrialised nations is gas that is being used. Infact, in most developed and industrialised countries, they are using the gas including for cooking, so they have converted even the Liquified Petroleum Gas (LPG) into people’s houses. But where we are now it is the industries that are using it . So when you now use the gas to produce, you produce goods at a lower cost and you know when you produce at a lower cost, it will affect the cost you will sell the product to the generality of the people. Now because the gas is there, you will see the opportunity to invest and produce more. When you also produce more, especially at a lower cost, you end up increasing supply and when supply increases as against demand, price will come down and by so doing solving inflation. Now, because of these opportunities that exist, a lot of companies are coming into the state. They are now employing Rivers people to produce in these companies. Some of the companies are running three shifts and you know what that means in terms of employment generation. So when you generate that level of employment you end up solving unemployment. So when you solve inflation and solve unemployment then you have enhanced the misery index of the state so you can see the economics of the state is one key area His Excellency has done well but people don’t seem to see it. People see more from infrastructure and politics but from the economy he is a guru and this is huge so that’s why we are talking. If you were not here now you won’t know that that has been done.
Question: What role has Nigeria Liquefied Natural Gas (NLNG) played? Do they have any contribution to what you are doing?
Medee: Well the NLNG are more into LPG and most of what they do is majorly in terms of export and has nothing to do with the domestic economy and one very disadvantaged area Rivers State has suffered even with the NLNG in the state is that the major players that uses and does the conversation of the gas are in Lagos. So you end up seeing people leave Rivers State here, go to Lagos to buy the gas into the gas plant here before they can even give it to the outlets before the outlets can now sell to individuals. So the gas you use in cooking in your house, they take it from NLNG to Lagos first, from Lagos they buy it back to Rivers State and then from there they will now get it into the gas plants, the gas plants will now put it into cylinders and then sell to the gas outlets and end users.
Question: Is there anything the Rivers State Government can do about that area?
Medee: Well, the Rivers State Government has also granted lots of opportunities in terms of ease of doing business and that enabling environment for most of these major gas plants to come into the state. For example, if you go to Rumuji today you will see the Greenfield Gas Plant which is a replica of what you have in Lagos where they go to buy gas so in a short time you will see that people will begin to buy the gas directly from Port Harcourt. We also have one in Iwofe area, the one in Iwofe area is already on now while that of Rumuji is taking off very soon. So you can also see that this administration has opened the state up for that to be able to cut-off that colonialism. Then in the LPG market, the state government is very concerned about explosion. You heard the other time there was an explosion in Kaduna and in Lagos but here we have been on top of it because we have taken the drive to make sure that unsafe and illegal practice in the LPG sector of the gas industry is discouraged. So for the LPG area, what we are doing is putting in our very best to control and monitor how illegal activities thrive in the sector. For example, if you know what is called decanting of gas? There is a gas plant where you are supposed to take your cylinder to and then they will fill your gas for you and you take it home to go and cook or if you have license from the Department of Petroleum Resources (DPR) to own an outlet where you can stock like 50 or 30 cylinders of gas, you take this cylinders to a gas plant, they fill it for you and you bring it to your shop then when people come just like those days when you bring your cylinder they exchange it with an already filled one but what we see today is a situation we called decanting whereby the man goes there and buy the gas in that 50 bottles and comes back to his shop with a small equipment and share those gas into another 30 so instead of selling 50 now he will be selling 80. Now as he’s sharing those gas through this decanting, next to his shop there, is a restaurant where they are cooking, next to his shop there, is a woman frying akara (bean cake), that is also being done in a residential area where maybe if it’s a three storey building, on top a woman maybe cooking and by so doing, you endanger the lives of the people and that’s why you’re seeing some of the explosions. In fact, the one that happened in Kaduna, a professor was lost in that incident. The professor was eating in the restaurant and they were decanting gas in a nearby shop. Infact, somebody could be smoking and passing bye or there could be a welder shop where they are doing some spark. That was how the explosion happened and the innocent professor that was eating in the restaurant was consumed including other persons. So his Excellency sworn to the protection of lives and properties of Rivers State and so what we have done as a ministry is that we have been able to set up a Gas Monitoring Committee made up of very responsible people. We have selected and screened them, sent them to security agencies for profiling and the result is out. Some of them have been disqualified and those who scale through the process have been invited and we have done their documentation with the ministry and as soon as we get the necessary logistics, they are going out now to check each of the gas outlets if they are complying with the security guidelines, their location and if they are doing decanting. Another very important one is if you drive into a fuel station where you’re suppose to buy fuel you see by the side they are selling gas. Before that can be done there is supposed to be certain specified distance you keep between the gas point and the fuel dispensing point. Is being complied with or not? Everybody is crazy about doing business but you must do it inline with the guidelines. So the committee would go out to check all that and one thing we have taken away from the committee is that they are not to enforce sealing or closing of the shop because that’s where they will be compromised. So they will only observe, do a report back to us at the ministry then we will now get to DPR for those ones not complying then DPR will go and seal it. So we are not empowering them to go and seal any station because that’s where you see the conflict and kind of crisis you have in other tax forces. Also, they will go to gas plants and look at the location. We have a few petitions here where a gas plant is situated in a residential area which is not supposed to be so. Today we see gas plants in residential areas, so who approves that? In some instances, it’s possible that the gas plant may have been approved before people started building there. Ok! if it was approved before people started building there did you put a sign post showing that that is a proposed site for gas plant? If the signpost was there and then you now see it and go and buy land and build your house there, then the man is not at fault. So all that we would check. Then also through that decanting we have been able to see the operations of the gas plant because it’s the gas plant that’s expected to sell gas into bottles to the outlets. Now the outlets you sell gas to, do they have the license to buy that quantity of gas? Because if you take two or three gas bottles from your house to go and buy gas no problem but if someone comes with fifty gas bottles to buy gas you should ask, this fifty gas cylinders you’re buying where are you taking it to? Do you have a license and where is the license? And the gas plant is expected to photocopy that license and put in their file so that when we check your book those days ago you sold 45 cylinder of gas to one person, who is the person? You should be able to show us a photocopy of his license showing that he can buy larger quantity and resell. Now another very interesting area is the cylinders. You know these cylinders have expiry dates. The cylinders you’re using to buy gas in your house do you know how old it is? Is it still valid or it has expired? So when we engaged with the association, we made them understand that they can invest in that area to get equipments that can detect a gas cylinder that is expired and the one that is not expired. So all that are what we are bringing to the sector and I can assure you that God helping us we will be able to monitor the sector in Rivers State and what’s happening in other states may not happen in our state. So in the petroleum and gas sector, we have a lot of inter-relationship.
Question: Any legal framework to sustain the process you have started?
Medee: Government is a continuum and so it’s left for your predecessor to continue from where you stopped or not but if you have a program that is the pride of the people you don’t need anybody to tell you that you will continue with that program. For example, I came here and on my table now we have license of refineries that was granted for Rivers State Government to build. Though the license has expired but I am making efforts now to renew it because you cannot have that kind of opportunity and you throw it away. So there are policies and programmes you do that your predecessor would come and may not see anything good in it but the kind of thing we are building here it would be very difficult for any person to come and throw it away. But if you do a program that is not sustainable it can be abandoned. If you watch His Excellency the governor of the State, most of the projects that were started by the previous administration, he has completed them. There are some that he didn’t give priority to like the monorail, you can’t give priority to that because it’s a white elephant project that if you go into it can swallow the whole administration. All the monies His Excellency is using to build five flyovers now if you put it nobody will see anything in it so at the end of the day, thesame traffic problem you want to solve with it is what he is solving with the strategic points flyovers. So the point I am making is if your program is sustainable, the programme would speak for itself and as such it’s difficult for anybody to discontinue it.
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Question: Your successes in the Petroleum sector?
Medee: In terms of petroleum, we have been able to put together the respective filling station owners in the state and we have their leaders and representatives working with us as a ministry and we have a very robust Relationship with them. When we came on board, there was something that was really challenging. We discovered that most of the filling stations in the state were charging fifty naira stamp duties to users in the state and as an economist I’m very very informed about that and that is why it’s good to use technocrats sometimes, that the stamp duty is a merchant fee and not a customer fee. So for a filling station to now expect every customer that comes to their filling station to buy fuel to pay fifty naira which they are supposed to pay then it means they were taking undue advantage of Rivers people. So we had a meeting with their leadership and we told them they need to stop. They explained how difficult it is to stop and how much they are spending. We were able to get back to the Central Bank of Nigeria and we interacted and we made them understand that if you charge from one thousand it’s difficult and in a shorter time the policy was now reviewed to start with ten thousand but even when it was to start with ten thousand they were still charging the fifty naira stamp duty. So we were able to be on them and gave them one week ultimatum and the leadership of the union helped us and under one week all the filling stations in the state stopped collecting the stamp duty. So people started saying what about other states that are still collecting, so I told them yes! other states may not have the opportunity you have as a state for His Excellency to bring in a technocrat to look at it and it only takes the eyes of a technocrat to see some of these exploitations. His Excellency has made ease of doing business here very robust such that double taxations that other people are suffering we don’t suffer it here. So you don’t take advantage of what is happening in other states with their double taxations and you also do those things and so we stopped it. And I can assure you today that people in Rivers State are not paying the fifty naira stamp duties. So all the filling stations and tank farms are working with us and we are controlling in terms of product quality, in terms of under dispensing, selling adulterated products. Another very important area is the issue of soot in Rivers State. Yes it’s an environmental problem but it’s from the economics of oil theft that that environmental problem came about so we are also doing our best to see what we can do to stop that and by so doing as a ministry we are proposing a program where we would take the competition to them. Taking the competition to them have the advantage of taking the market from them because you are aware Federal Government has done a lot in terms of using the military and force to stop them and they can’t stop. They burn down this station today, they build another tomorrow. So we are saying that if you take the risk to steal crude, take the risk to cook and nobody to buy the next day you won’t go again so that’s why we are looking at possibly some mega filling stations that the state government will get going then at the end of the day we would be able to see where we can have a situation whereby we will be selling the right product, right quantity, right quality as a station and selling at convenience relatively without cash because without cash we can do 24 hours. If we do 24 hours that means you can buy fuel at anytime and because it’s cashless no armed robbery would go there, so you can sell overnight. In that case, people will seem to patronize the state owned stations than the privately owned stations that are patronising the people involved in oil theft. So if you go to the state owned stations and you are sure of the right quantity, right quality, people would now prefer to buy more from us than from those other stations and so if anybody from the other stations have gone to buy one truck of “kpo-fire” petroleum and he cannot sell it in six weeks, then it means that you have now dealt with the rate of turnover and by doing so you are taking like seventy percent of that market from them, once you take that off them you will see that gradually they have been incapacitated and nobody will tell you that that business is not flourishing again. So we are interested in doing that and we are proposing that that would be done and by God’s grace we have a robust plan for the ministry in terms of the petroleum sector.
Question: Do you mean that Rivers State is planning to have Mega Filling Stations?
Medee: It’s a proposal we are making and you know it would go through stages and an enabling law to back it up. So once that is done and it comes on stream, every issue that has to do with this patronage of “kpo-fire” business would be out because like you know we have also proposed the modular refineries but we are not in control of that. It’s controlled by the Federal Government and as such they may decide to give you license or not. But what can the state do and that’s what we are looking at which is the policy of taking the market away from them. So instead of confronting them we are going to compete with them.
Question: The major challenge is with kerosene. How are you working to make sure kerosene is available to discourage people from patronising these illegal refiners?
Medee: Well, like I said, that’s on the exclusive list of government so the state has little or nothing we can do in terms of the supply of those products because it’s Federal Government business. So all we can always do is if there is a product meant for the state, we ensure that it’s not diverted, we monitor to ensure that it’s evenly distributed. Moreso, you are aware that most of the refineries in the country are not working and you know these products are being imported.
Question: Tell us about Natural Resources?
Medee: You know the in-thing today is about diversification of the economy. Petroleum has been the only thing everybody talks about but beyond petroleum there are a lot of other natural resources that abounds in Rivers State but people don’t seem to know. So what we are looking at is we want to see how we can do a geophysical survey. We are talking with the Miners Association of Nigeria, their national leadership was here last week so we are planning to do a joint geophysical survey, so the survey would be able to uncover which of the natural resources are available, there location and in what quantity. So when that is done, we would be able to open our doors to the international community’s on what we have for them to come in and invest. We have clay and others that the geophysical survey will uncover. The state is so endowed so we want to uncover them, harness and exploit to the optimal benefit of Rivers people, that’s part of what the ministry is doing. So, by the time the result of the survey is out we would be able to reposition the state’s economy on the part of diversification from petroleum and gas. As a ministry, it’s our mandate to be able to uncover them. Today if you go to Ogun State, most of the tiles you have in your house is being produced there from natural resources and with same quality with the imported ones. You have silica, sand, gravel and glass all there in the state but until the analysis is done we can’t tell you where and in what quantity they exist.
Tell us about Conflict Resolution?
Medee: You can see that before we came there have been incessant strikes, NUPENG, PENGASSAN, IPMAN and every other unions involved in activities that has to do with the ministry. The major among them was the conflict between the whole Eleme and the petroleum tanker drivers. There was an election conducted and the person who won was allegedly shortchanged and because he is from Eleme, he went back to the community and said he was being removed because he is not from Yoruba or Hausa and the community took it upon themselves and went and lock their office in Eleme. The ministry moved in, and we appealed to our people and they released the keys to us and we opened the office. Today the tanker drivers are working. Also, you are aware that there used to be conflicts between tanker drivers and soldiers where tankers were impounded and some even burnt. We have been able to intervene. We had a meeting with the General Officer Commanding of the Army, Civil Defense, DSS and all relevant security agencies and we were able to set up a small committee which is working that’s why you’re not seeing most of the tankers now being destroyed because before any tanker would be arrested by the soldiers the committee would go and look at the product they are carrying and in fairness, some of the products are stolen crude oil and when we get those cases, those involved are recommended straight for prosecution. There are cases whereby the density of the product maybe suspected and in that case the committee would go in and see if it’s within the specified DPR density range and we allow it. In so doing we have been able to mitigate against conflicts that had existed between the security agencies and the union and several strikes that were threatened averted. Also trucks that were impounded by the just disbanded taskforce on illegal motorparks were released by the efforts of the ministry and by so doing also reduced direct confrontation by the drivers and taskforce.
Question: When you arrest this people with fake crude what do you do with the crude?
Medee: We don’t arrest. What we do is that if those products arrested by the security agencies are compromised, they take it to their base and start investigation. But the ones that are being suspected and by the time we do the on-the-spot measurements and we see that they are within the approved range of DPR we plead with the security agencies to release them and they have been releasing them.
Your final word for Rivers people?
Medee: If you see any illegal activities or decanting of gas in your area reach out to the ministry because if you think it’s not your business, then the day anything will happen the Governor will not be there to be consumed, the commissioner will not be there to be consumed. If you’re not there then your relative or friend might be there so don’t keep quite when you see these illegal activities. Everybody that must do gas business in Rivers State must do it with strict compliance to the DPR regulations and guidelines.
