Experts have differed on the need for the country to shift towards the global practice of bringing petroleum and power under one ministry to create a single energy ministry to fully reflect the breath of the portfolio. The experts say this approach would be more effective as Nigerians crave for real momentum in the energy sector.
At this moment of low oil price, crude oil production from Nigeria’s big fields has matured and is beginning to decline; there is urgent need therefore, to find new oil. In addition, electricity supply is abysmally poor and recurring petroleum scarcity persists.
Analysts say these challenges need a wholesome energy policy approach.
“The model of junior ministers with a de-facto super minister or a president, who doubles as petroleum minister is no longer adequate, given the realities facing Nigeria today.
“It is time to face the reality of having a single, empowered, capable energy minister”, said an energy analyst, adding that what is needed is joined up thinking about energy policy and delivery, rather than duplication of energies.
“I am not entirely sure that the coupling of the ministries of power, works and housing is an impeding factor to momentum in the energy sector”, said Dolapo Kukoyi, transactional lawyer and partner at Detail Commercial Solicitors who currently works in the power sector.
Kukoyi added, “there is some momentum though, it is not apparently as aggressive as the public would want it to be.”
“Even though the portfolio seems large and very challenging, it is not a factor impeding progress in the power sector. Indeed the minister for Power has very limited roles to play in a privatised power sector, as his role is largely limited to policy issues”, said Odion Omonfoman, an energy consultant and CEO of New Hampshire Capital Limited.
However, Sunny Oputa, Chief Executive Officer of US-based Energy & Corporate Africa, thinks differently. “To couple the ministry of works, power and housing, is to maintain a culture of inefficiency. It is highly suffocating and a management overload to hand over the administration of all these essential sectors under the leadership of one minister”.
Oputa adds that “not only that the coupling will lead to inefficiency and operating under-capacity, it will also breed corruption and intoxication of power, since control will become a major issue”.
In other parts of the world, the norm is to have an energy ministry that brings oil, gas and power together.
Experts however disagree on its workability in Nigeria.
“A ‘one size fits all model’ does not typically work in Nigeria. While I agree that there is an obvious need, which has become more apparent for integration to be between the power and gas sector. We have over the past 30 years or so, set up the gas and power sectors as separate, and operated them as such, until we found out that there was a need for integration, in order to have a private sector/investor friendly gas to power sector”, said Kukoyi.
“It is out of place if we are thinking that since the global best practice is integrating oil, gas and power, that it will work the same way in Nigeria”, said Oputa.
“The linkage between the oil/gas sector and the power sector is the natural gas/fuel oil used as fuel in thermal power generation plants. Thus, if your fuel sources do not involve the use of natural gas, there is no nexus with the oil and gas industry”, said Omonfoman.
Omonfoman said what is needed is a greater co-ordination, strategic planning and co-operation between both ministries to achieve the desired results. “For instance, there should be more coordination and alignment of gas development projects that would deliver more gas feedstock with power projects”.
However, the desired co-operation and integration between petroleum and power ministry seem to be lacking over the years.
There were situations where power projects were planned and developed without a clear line of sight to gas supply (gas sources and transportation) and which has led to significant amount of stranded power.
Nigeria’s energy sector cannot survive in its present shape, analysts say. They add that it can neither compete in the globalised energy industry because to all intents and purposes, the different ministers and ministers of state would be reading from different scripts as has always been the case. This simply contradicts the premise of a wholesome energy policy which entails an integrated development of Nigeria’s energy resources interlinking power, oil, gas, and other hydrocarbons with renewables for a secure energy future.
FRANK UZUEGBUNAM
