 All right, we're back. It's still the breakfast and plus CV Africa and I will have just one more conversation, quite interesting one for you before we call it a day. Well, the Nigerian National Petroleum Company Limited NNPCL, as it's known these days, has reiterated its commitment to ending oil theft as production has increased above 1.6 million barrels per day. It's quite an interesting statement by the NNPCL. Well, they re-accorded their resolve at an event yesterday, Tuesday, which was chaired by Nigeria's vice president, Professor Yemi Oshibajo, the vice president and stakeholders in the Nigerian oil and gas industry, discussed ways to solve the challenges facing the Nigerian oil sector. The meeting reflected on the progress recorded over the last 12 months, the following the introduction of the industry-wide security collaboration for the protection of hydrocarbon infrastructure. We're glad to have joined us this morning to analyze this development. Zaka Bala, Zaka Bala is an oil and gas industry analyst. Zaka Bala, good morning to you. Thank you very much for your time. Thank you and good morning to everybody. All right, all right. Production is on the up, you know, of all the oil is on the up, crude oil is on the up. Now we're hearing 1.6 million to 1.7 million barrels per day. What exactly happened? Well, you know, some of us who are analysts have always explained it. Even when people were busy discussing the petroleum industry bill and finally we had the Petroleum Industry Act, remember till this moment I'm against the removal of subsidy. I'm also against the removal, I mean the introduction of the regulation in the Petroleum Industry Act and from your prologue you could see that the increase in production have nothing to do with the introduction of the regulation in the Petroleum Industry Act. It has nothing to do with all the time that has been spent analyzing and discussing and concorting the Petroleum Industry Bill into an act. It was simply the recalibration of strategies. That was just what happened. Remember some of us said the oil and gas industry in Nigeria was expressing business climate hostility. So the only thing that was introduced was there was a meeting of stakeholders and when you talk about stakeholders, it was very clear that government was brought to the table for discussion. The communities were brought together. The oil and gas industry owners and practitioners were brought together. The communities were brought together and they decided to look at the problem and decided to address it. So what they just came up with was the concept of trying to make sure they detect the data and destroy anything that will constitute an operation in the pre-flow of food oil. Then they tried to make sure food oil was recovered. And in our own way, like I've always said, I've always used what we call the control mechanism. Remember I've always spoken about the pre-density control mechanism, the detective control mechanism and the compensating control mechanism. So in those same mechanisms, as probably some people decided to now look in on and decided that the strategies were recalibrated, which have resulted in higher production today, which is, I mean, something that all of us should appreciate and belong to us, Nigeria should appreciate and applaud. Zakabala, you said until this moment against the regulation of the oil and gas industry, you're against a subsidiary removal, but I hate to bust your bubble. We now have, at least for the downstream sector, deregulation. And I don't know if I can call a removal of subsidy, but people are paying various amounts. I mean, the government, we don't even know what the pump price of petrol is anymore. Last month, we were told by an Ipman official that the NMDP called them to a meeting and told them to sell at 179. The NMDP already denied it. The Minister of Petroleum Resources denied that they've increased the price, but we see an MPC itself, even at the petrol station, selling above the original approved pump price. And all over the country, people are selling at prices that's retail as now, the petrol market, as you want to call it that, are selling at prices, I mean, they want to sell at deregulated, if you can call it that. Nobody's following the government's directive anymore. We don't even know what the government's price is. So maybe we can say that it's been deregulated in the downstream sector now, and that maybe we will be seeing the subsidy removal, as they said later this year. You have not busted any bubbles. There is no bubble that you have busted. If you look at what is happening in the industry till this moment, all these things that Ipman and Mo Man are talking about, what people don't take into consideration. Everything you do when you run an economy, are you not tying it to disposable income? You tie everything to disposable income. So anything you are going to introduce, if you don't tie it to the any capacity of your citizen, then the whole economy around it is a waste of time. I'm the one explaining this. And let me tell you till this moment, people don't understand what deregulation is all about. Deregulation has not come into effect. If it comes into effect, many Nigerians will understand. In a deregulated market, you can sell at, in other words, petrol station A can sell at 200 naira per liter. Petrol station B can sell at 500 or 1,000 naira per liter. So what people don't understand is, don't introduce a concept that by the time you start seeing the negative effect, if you want to fight those who are trying to implement that concept by the time they take you to court, that is where you will understand that you have introduced a concept which meaning or who's meaning yourself you didn't understand. So subsidy must be tied to any capacity. If, as I speak to you now, the minimum wage of Nigeria per month is 30,000 naira, you and I know that 30,000 naira can not buy a bag of rice. You and I know that 30,000 naira cannot buy a 50 liter jerry can of this. And another thing I can tell you is this, any energy journalist, any energy economy, any energy engineer or any energy environmentalist or lawyer should take the Nigeria minimum wage, which is 30,000 naira per month. Pray this, show the amount that somebody should pay for house rent, show the amount to buy food, show the amount to pay for medical costs, show the amount for transportation, show the amount for school fees of children. If you are not able to use that 30,000 naira to show how all this can be taken care of in a month, that means that economy the enemies of that citizen is a fake enemy. And if that citizen is still surviving, that citizen is surviving through a delusional means, which probably technically can be described as corruption. All right. I mean, we're looking at 1.6 million barrels per day. The NNPC is saying that the daily production of good oil is rising. That 1.6 is quite, some will say an increase, but is it high enough compared to what we have? I think the last time we had more than, we had about 2.5 million barrels was some years ago. That was in 2003, if I'm not mistaken. So should we be celebrating where we hear that we are now producing 1.6 million barrels per day? Is that something to be to encourage ourselves with? Or can we do significantly more? And is it still a big situation as far as the production of oil in the country is concerned? Well, the first thing is to celebrate and appreciate that at least government has decided to listen. And some of us have always said we were using the wrong economic models and approaches. Because if you look at it, all I was trying to say is these recoveries are not because of the Petroleum Industry Act. They have nothing to do with the Petroleum Industry Act. They have nothing to do because government wants to remove subsidy. They have nothing to do because government decided to introduce the regulation in the Petroleum Industry Act. What just simply happened was that Nigerians decided to sit down and recalibrate their strategies and they discovered that the oil and gas industry has been experiencing business climate hostilities. And one of the hostilities has been called oil theft and vandalism and they decided to tackle that. So by just tackling vandalism and crude oil theft, they were able to recover so much because as at last year sometimes around probably July. Also, the production fell to almost 1.6 million barrels per day. But that didn't mean that the oil companies, both local and international, were not working hard. But stealing and criminality and vandalism was the principal reason why the productions were low. So only one aspect has been tackled now, which is criminality and vandalism, and we can see how the production came up. The next thing we need to do now will be to look at other areas that have been affecting production and the interest and investment in the industry. So the next thing we need to look at now should be something like contract cycles. How long should we take for contracts to be awarded? In this case, licenses. What I mean, when I talk about contract cycles, I'm talking about whenever you come out with license for new oil fields or for renewal of oil fields, how long will you take before investors are sure that they can start investing? Because some of these investors, they always get these monies or funds from their shareholders or from financial institutions. So if they get these funds from shareholders, they are expected to pay dividends. Or if they get them from finance, they are supposed to pay cost of debt. So if this contract cycle takes a long time, it will not be in their favor. So if we can induce the contract cycles, that will help. Another thing that needs to also happen is that there is a need to make sure cash-call relationships are respected. And when I talk about cash-call relationships, what I simply mean is that between the Nigerian government, maybe through NNPC and some of these oil companies, they always come together, bring their monies or cash together to carry out drilling or exploration activities. So if the government can improve in making sure she is contributing her own part, that will help. Another thing we need to look at again is the general insecurity around the access where oil and gas activities are carried out. Because we have cases of criminals, we have cases of extortion, illegal extortion by some communities. So if all these are addressed, the industry will bounce back. So if you look at it, all I'm trying to say is this recalibration of the strategies to bring back the oil and gas industry has nothing to do with the petroleum industry. All that we require is physical discipline, social discipline and professional discipline. Zakabala, interesting. Because of time, I just have to interject as I can push a few more questions to you. You've given us a fantastic expose on the other reasons responsible for this. Apart from the security aspect with the pipeline, vandalism and oil theft, Tantita services owned by government, aka General Tampolo, partnering with the government security agencies to police the pipeline. We saw all the videos of the discoveries. But what about bidding? I saw a report which said that Nigeria had not put up a bid process in place for oil exploration since 2003. I don't know if that is still the case. Also, I saw another report that said that there had been no new leases since 2007. Are these things that need to be looked at as well to up the production in the country? That's number one. Number two, the international oil players in Nigeria have been in recent times divesting their interests in onshore fields, selling them off and packing up basically. Do you think that trend can be reversed? Has that also been a factor in affecting Nigeria's daily crude oil production? Yes, all those. The two points you highlighted are truly correct. When I talked about licenses and the time it takes to award licenses while investors are holding their cash and they need to pay dividends or interest to their creditors. That was one of the points I wanted to highlight. If there is a need to award new blocks or licenses, it will be good for government to put processes in place that will make sure the award is carried out in a fast, transparent and inaccessible manner. That's something that government needs to do. They need for improvement. No matter how good you are, improvement is very good. Even if you will do that because of changes in technology, then the other aspect that you were trying to talk about, all the areas you highlighted make a lot of sense. The investment by the IOC, some of the IOCs of their onshore assets here. The reason why they were running from onshore, when you say onshore, onshore simply means carrying out drilling and exploration activities online. If you look at it, most of the crude oil vendors and thieves were carrying out those activities or they were vandalizing the production online and swamp locations. So the losses became so huge and the companies, whether local companies or international operating companies, could not cope with the losses. That was why they ran away. And that was the reason why sometimes ago I said government of Nigeria should not be telling her citizens that the oil companies are divesting. Divesting means you have discovered new opportunities and you went into renewables. In the case of Nigeria, they were not divesting. They were running away because their losses were too huge. And that was why I said if government had been telling the citizens, the citizens would also follow and support in checking the vendors and the thieves just like what Governor Wike was doing. So if criminals are trying to threaten our activities, whether in the oil and gas or education or health, government should not hide it. What government was saying, they were divesting. They were not divesting, they were running away because the losses they were experiencing from criminality and theft was becoming unbearable. All right, all right, all right. Moving on from that divestment or divestiture, I think you would agree, we are out of time, but I think you agree that the exploration of oil activities in northern part of the country, northern basin, we want to call it that, may also be a solution. Recently, this month or last month, we heard that they discovered oil in Nassarowa state. They are pushing for oil in Sokota state and all that. And the NNPC Limited is ahead of this, at the front of this, to make sure they discover and find oil in northern part of the country. So let's see what happens. Zakabala, thank you so much for your time. We really enjoyed your expert analysis, as always. Thank you very much. And that's the size of our package right here on the breakfast in Plus TV Africa. Do make sure to follow us on our social media platforms, on all the social media accounts we have on Facebook, Twitter, Instagram, and we're on YouTube as well, at Plus TV Africa. We have a second YouTube account, Plus TV Africa lifestyle, lots of content for you. You can also check out our website as well. My name is Kofi Bartels. I'll return tomorrow, same time, good morning.