 Thanks for staying with us now. Referencing Siamtia Insight, a research publication website, despite being an oil-producing country, Nigeria heavily relies on imported petroleum products due to the inadequate refining capacity of its domestic refineries. Now in the third quarter of 2022, the oil sector's contribution to the country's GDP reached 6.33%, indicating that the oil sector contributes in no small measure to the country's GDP despite several challenges faced in the country or in the industry. Despite the contribution of this oil sector, there have been various challenges ravaging the industry, some of which include oil theft and pipeline vandalism, corruption, lack of infrastructure, environmental degradation, frequent oil spills, gas flaring and improper waste management practices have also resulted in pollution, deforestation and demand to or rather damage rather to the aquatic ecosystem affecting local communities and biodiversity. It is ironic that oil which is supposed to be a blessing to the nation through mismanagement has caused so much chaos and confusion in Nigeria and today we're asking what is the role of this petroleum industry right in nation building and please let's hear what you have say remember you can join the conversation send us an sms or what's up this way one 8034663 can also tweet at us at we show after one of the hashtag we show so I'll bring in Basi in a minute Andre I just want to hear your thoughts with you when we say petroleum industry right has it really helped in developing our nation it's a double-edged sword it's a blessing and a curse has it brought us a lot of money absolutely has it then allowed us to become a single income economy absolutely there are many ways you can look at it now we're heavily reliant on petroleum we've gotten to a point where all our effects seems to be tied to this one thing today even when you look at the way we have treated it our focus has been about pulling it out of the ground and selling it it has even so blinded us that even to continue refining for our own personal use right we didn't even achieve that right so it almost was like you know when you're taking medicine and the medicine is sweet and you keep taking it because you've forgotten that it's actually supposed to be fixing something and you're just enjoying the taste of it so it becomes a one-sided thing and then eventually becomes detrimental that for me is what it is so does it have a lot of positive aspects or impacts on it yes has it put Nigeria on the world stage yes has given us a lot of income yes as it increased our income per capita yes I mean all of these things but then you could also talk about the negative sides but we're talking today about the positive let's try let's try to stay there please you want to say something quickly before I bring in our guest I mean I don't think I'll add anything to what Uti just said you know she just really took off the words of my mouth and even more it's just everything she said honestly okay all right so let me bring in our guest Andrei Basi is the managing director and the CEO of Igzium onshore a company with over 10 years experience in the Nigerian oil and gas industry providing turkey business advisory services to indigenous and multinational energy companies he holds a BSC degree in industrial relations and personal management and successfully oversaw the turn around and profitability of a failing downstream energy services services provider in Lagos within a 14 month period is an active and leading participant in citizen engagement and advocacy programs seminars and talks around across the country and he's very passionate about advocating technology in governance now he's joined us live in studio thank you so much for joining us Andrei I apologize but this is an interesting conversation it's just happening that is not really apt because you were supposed to come on the show I think two weeks ago or something happened we had to cancel so it's almost like okay this is the right time in the right timing for the conversation because again we know what is happening with the petroleum industry right we know the capacity like Uti has rightly said is almost like a curse and a blessing for us right but we still believe strongly that there's so much that can happen if we get it right I mean so if you first of all want to give a summation of what is happening with the petroleum industry the announcement of the president saying that the subsidy is off and all of that maybe you just give us a small background you know what you think is happening and you know your own two cents on that so are we talking about the good news only ah let's talk about both okay so I'll just give you a brief you know when it comes to the petroleum industry we are overly focused on the downstream sector because that's where directly affects the energy and so you allow the Austrian guys to sit pretty I see if they are not a part of the industry but I'll just give you a brief Nigeria has of before now we've had the capacity production capacity or refining capacity of about 450,000 miles a day I think about 200 in Port Haco they have 125 in Worry Kaduna has 110 or they're about so combined you know we have that capacity a little below what dango tea has about 200 difference unfortunately those refineries as we know became maribond they don't work so it exposes us to the challenge of taking the crude out and bringing back just three products now each part of crude has the capacity of giving about 17 different products so we only get to get back three and we lose out from about 14 or there about okay so that's just a brief on where we are today now um because we've been importing this product into the country of course it affects our exchange rates and npc or petroleum products already accounts for about 95 percent of you know servicing our budgets so we depend heavily on petroleum to be able to survive as a country so whenever anything breaks the petroleum sector we will all cry because it trickles down to even the rice and everything you find so um yes it has been a blessing in a way over the years and because of our negligence it has now become more of a cost to us than a blessing now this is not a bad thing to say that it cannot be fixed definitely can be fixed and I'm sure what we are going through now we should have done it a long time ago it's unfortunate just another 10 years ago to just remove the subsidy but now everybody would have eased it off nicely ah well because you see we weren't quite ready to accept the pain that comes with removing subsidy now it's like you enjoying some sort of free money and the day it is removed you feel the pain because the reality of where you are today suggests that this must be accounted for so we have to account for all these things we've been doing all this year so that's where we are today it's so interesting you know it's interesting he mentioned something around the all the refineries because I saw an interview when dangutis refinery was launched otetola was saying that they had actually bought you know they came together to buy um the refinery and some magumagu happened and it was taking away and today see what dangutis has put up you know and imagine if they had allowed them to um was to continue with the process of acquiring it and now running it up and he was saying that you know government had no business in in in business right they should just leave um those what's called infrastructures and all of that for private companies to run you do agree with that right if you if we if we want to look towards maybe like solutions right now to the current challenges that we are having because we still need all those refineries that's why the fact that they are not working now if we have investors coming to say they want to take over those refineries how would that impact if those refineries are working would it change some of this hardship that we're already facing when it comes to you know put in fuel in our cars well there are different models to refining first of all um you have the actual refineries which you know have the capacity of reviving 100 000 or thereabouts then you also have modular refineries that can be in little clusters let's say three of us own marginal fields for now and those fields have probably the capacity of maybe five thousand variables per day and instead of me to go and site my refinery in probably uh let's say the location is in Lagos so there's no need for me to site the refinery in Akiti and I'm as well cited here so that feedstock is Lagos there I mean allows you to refine locally for the consumption of the people you have around you now outside the level is very correct because at the time I mean during the time of president uh Oba Senjo there was a consortium um set up called I think the blue or red star consortium it was the an emergency company so that company was supposed to um acquire all the refineries unfortunately they didn't go through the Bureau of Public Procurement properly so everybody thought it was a scam because we didn't quite trust the government but then um in the last 20 years Nigeria has been suffering or struggling with the petroleum industry bill now that bill was supposed to unbundle the entire petroleum sector so that it allows um individual players to come into the industry now what would that do first of all um when this bill was passed um last year or 2021 rather by president uh Buhari yeah we all embraced it because it was really something we've been waiting for now that bill allows two things one it allows the um entire petroleum industry to be divided into two sectors it was being regulated and managed by the department for petroleum resources just one uh paracetam but when the industry bill became an act um the petroleum sector had two regulators one upstream the upstream um commission and also um the downstream downstream and downstream petroleum regulatory agency which seeks to only cover regulating prices importational fuel and what have you now as soon as this um subsidy is out what it gives um um um opportunity to is allowing individual players if you have money come into the picture import your own fuel come there let's compete in prices so when competing prices the law of demand and supply will take its cost and then not without the taste of that game but let me take a break although you know what he did with sugar not with him in that game ah ah don't even try it let's take a break ooty i think ooty has a question we'll come back and we'll take more questions all right thanks for staying with us there if you're just too new we're discussing nation building and we're asking what the rule of the petroleum industry would look like you know especially developing and building our nation and we have with us andrey basi now please let's hear what you have to say remember if you're enjoying the conversation send us an sms or what have to do with 1834663 you can also do that as a way show i've got one with us and we show let's see so we're left us on the cliff hanger just before the break so don't go to it right uh we know that he can't meet demand and i love that you talked about the regulators because in my humble opinion i think that the marketers are standing on our necks and somebody needs to stand on their necks and i know you're in the industry so you probably have a different opinion right because yes like i said but the question for me is now that we found ourselves in this situation we can't we can't turn back the hand of time we can't reverse it we are moving forward we've seen the hardship the toil what is the rule that the regulators are going to play how do we make this price as cost efficient if you were listening but when the show started i was talking about how can we make this price as lean as possible what are the things that are inflating that price today so yes the effects conversation is on one side right but how do we make sure that this pump price from the perspective of a Nigerian who by 200 or even 2000 percent doesn't trust this government how do we start to make this process maybe not even transparent but at least give me a sense that i'm not being duped every time i get to the pump okay let me break your heart you see when any commodity i want you to see refined petroleum products as a commodity it could be gary it could be anything yeah now when any commodity is deregulated you cannot control the price now it's impossible for any of the regulators if you're upset somebody is saying control the price i'm saying how do you make it as cost efficient so i'm going to the pump today somebody has told me 488 or 500 and whatever depending on what the nmpc has said wherever you are in nigeria i don't have any marker to say is this the best possible price like you said if i deregulate nobody should be setting price the most you can do is tell me here is the margin if your if your landing cost is this you can't go beyond 20 percent or 30 percent right but so that's what i'm saying it's not about setting the price it's just i don't want to feel like i'm being robbed every time i go to fill up my time well that that can not change unfortunately so i don't i don't want to tell you something that will make you happy now allow me to learn on the points i wanted to make before you came in now nmpc limited runs as a business now it's no longer nmpc as the government now the prices you saw on an nmpc platform limited nmpc limited is them putting their prices as a profit making venture now if you are able to buy from nmpc good for you which sales are probably 488 legos and a couple of other differences in other parts now that doesn't stop other entities from fixing the prices at what they think they would make their profit from exactly my point so i say i'm sorry to disappoint you that question because the fact is nmpc said 488 and all the other marketers went with the price i don't know what their margins are i don't know what they've paid they literally one guy one company said this is what we're selling and everyone just went for it and that's that's because nmpc is actually the lead company in this industry when it comes to petroleum services so it is believed that they might have the best price that's the belief that they might have the best price remember that i said that i don't want to go to the pump and live on the belief i want to be clear that somebody you ask you you say please let me just break it down i'm not the today import you will be marketer i'm not you bring for me i mean nmpc is an old government company i'm not supposed to be the most efficient so if a marketer had come and said you know what the price is 400 i'll say okay this guy has been commercial all the while so i want to believe he's efficient and i want to believe that he's not stabbing me in the eye but then the nmpc just picks a number and everybody runs with it and your cost sold the same so unfortunately that that margin or those chains of margins have not been disclosed ever to the public to see see that that's what i said it's what you see let me learn on that yeah so unfortunately we don't all have that in the public space now maybe over time as other investors begin to come into the space maybe that may be clear i would put this as a normal business entity you know every regular business may not tell you the back end of you know their business in terms of profit and margin what the markups would be and all that so think of it as a business in that light but if we have if i'm going to answer a bit of that question we know what the standard rates for in terms of voyage in terms of what i mean by where i mean it's great in terms of we don't learn the cost of it you know you know all the stuff yeah you can put that but the actual cost that comes from the difference between what nmpc pays as subsidy and a couple of other things unfortunately it's not in the public space but then shouldn't the regulator be setting a margin because that means that as a marketer you today in the abroad if you build a house and it costs you 200 000 you can't sell it for more than 200 and something thousand days in margin right it's not talking about your your profit or whatever it's just here is how consumer protection yeah i think it's a good feedback from a good Nigerian like you so i'm looking for investors i have to bring in a vessel i will i will sell my own price 200 trust me well you're welcome to the game the only thing that you see the only thing that the only problem i have that is that if they will let us uh import clear good and everything bribe free you see all this bribe in a order that increases the money well that's it that's it there are certain there are certain uh words i may not be able to use so i allow you use this word i'm telling you that your controller general setting of 3.2 billion era e-system to end 3.2 billion dollar e-system to end corruption yeah and to make sure that the system is transparent i mean if they will give let me tell you something let me tell you what bring the price of things high in this country a builder a real estate person a realtor will build the property how much will he pay first of all the money let how much will he bribe all the government these are also all those factors comes to the consumer like maybe not petio that's what would he say thank you strip of all these bottlenecks and we will see the exact cost that this thing comes to nobody is saying we should not be profitable as a business but don't don't don't profit at my own death because if one of us die will we buy the petro now this is where this is where the paa comes in now the paa has already paid provision for all these um um things you have mentioned so when like i said when other players come into this industry that's what i'm trying to tell you that that would allow you to see how you can see all this in between and rake can i tell you why i'm saying that other players might not work in this country let me tell you something right even with the government we've seen how they have set up some kind of structures of policies that continue to enrich certain kinds of businesses and businessmen you cannot have it's why even economy like that you must give everybody the opportunity to be able to become if tomorrow i have investors and you're willing to give me money to trust me to bring in this business and start up a petroleum and business i should be able to run my business freely without the fear of somebody coming to monopolize the market so that's the point you cannot have that one so don't just leave all those independent whatever we are just we are your messy let us just have fasting and praying that god will touch their hearts and they will give us a decent price to buy this petrol from okay or else we relocate glory so my question is with the removal of subsidy i mean everyone is anticipating that things will get better um some of the funds that were diverted towards subsidizing the importation of fuel will be used to grow the economy i share the same sentiment but then again we know Nigeria when it's negative it's easy to feel the impact but when it's positive it's almost like it becomes slower so what do you think i would like to also know your thought with respect to that do you think the removal of this subsidy really in the nearest future will start seeing positive impact of this step taking well i i would say on paper yes how we have um what the plan looks like on the pia allows um most of these monies that were channeled to to subsidy payments to go into other aspects of the society or the sectors like uh healthcare education infrastructure you know and stuff like that however there's still that gap of trust now Nigerians are already burnt over the years so we don't even trust you when you say that this money would be appropriated for this reason so and that's why that question would always hang over the necks of every government official everybody who is in this space that we do actually do what you say you do with this money now until we see those things work in actual sense or in reality um that is when i can say okay your question has been answered but for now it's still very tentative and it works perfectly on paper so let's come back to this topic right the role of petroleum industries in nation building i remember driving to i think it was here still but did i get a finite lamp yes oh my god ah i was speechless that's the boy goes in the lights so the place you could i i actually just knew that enter the different territory like the place was so you know so many beautiful structures the roads if you see the the um the kinds of roads on that i saw them thank you just help me to summarize the english i was trying to look i saw the money yeah right so if we want to really say that what nation building would look like with petroleum money what should nigeria look like well we should look like kata we should look like we should look like all these other countries who have adequately deployed you know the benefits or the gains of uh you know the the the the political seats into infrastructure because what you have seen mostly is infrastructure that is what most companies use their their profits from petroleum uh to to do so let's just even streamline to host communities let's not see the whole nigeria let's see maybe delta state or where else are any of these places that have now um the law allows every operating company to give up three percent of their profits into community development and where you decide not to there's a penalty you pay then the community in turn have the responsibility of also protecting the investment so that it becomes a good partnership but most companies would rather pay that penalty than putting that three percent down because maybe a company that is flying gas for instance it's more it's more expensive for you to be able to compress the gas bottle it and sell rather don't flood because it's cheaper for the operations so um most of them actually do give the three percent but even we are on the enemies because the leaders of those environmental communities save the money build you know their mansions get all they can build one bubble for them can all they get and you know and just give a little to the society so i wouldn't say per se that um um the government has done well in terms of providing infrastructure that should come with the petroleum industry however it's both sides because the community by law already has something that comes to them but unfortunately um they don't use it so you've just opened another kind of worms because with every law enforcement without enforcement the law is useless it's it's words on paper so if you continuously see that something isn't working right so we're taking away the subsidy today we are hoping hoping as we hope as Nigerians that we're going to see the benefits like we were driven to as she saw the money we don't know yet whether we're going to see the money because all the other places that suck up money nothing has been proved but let's not digress it is clear that even that three percent who has gone back to assess whether three percent is enough who has looked at the profits to say you know what this three percent actually should be ten percent who has looked at the impact of gas flowing to say you know what if you're going to fail the gas here's a fifty percent penalty who makes it less attractive to fly the gas and to give more money and then where is the law that says how are we going to track and trace this money I mean when you see these things I hear you but all I'm hearing is more and more problems and it means that we just do things half-baked I agree thank you for agreeing I agree I totally agree with you now when I actually read the petroleum industry act there's so many gray areas there's so many gray areas I I do not know if we even have the capacity to be able to carry out you know most of the same like you rightly said now even if you deploy three percent how do I account for three percent when the companies are even unable to declare what their real profits are so how do I know what three percent is now even then I said okay three percent comes to which unit of the society is there an association is there that is accountable to the people to see it's not enough to just throw in one bubble it's not enough to draw in okay I put roof on it on the secondary school or something that is as basic as that but it still falls down to the fact that that act has to be we adjusted we visited so that we will see the impact of that particular clause in the act for now we are not able to maximize you know the potential of that act because we don't have anything to do so so there's really no enforcement following that order to the letter who is supposed to impose it like I said there are two regulators now okay so there's a downstream the upstream yeah so when it comes to production when it comes to exploration production and all that so it's the upstream now the downstream of course comes to the time for an importation sadly hopefully the importation will end then you know and refining and what have you yeah so I was just going to ask you that uh because the president had given a statement that he's commanding all the service chiefs at the school and end oil theft in the country again the thing you know I don't understand it because oil theft is not me and you that we steal oil oil is not something I can put in this cup and hide under my blouse and go I have to I have to have money to be able to steal oil so I saw the model for Dubai one time I remember that report that came out remember how the guy the shake with pride they show you the leader I said to the very last drop yes of oil they know we are everything they pattern please is it possible for us to have that because again we don't speak into the point that you said they are not able to declare profit they're not able to do these I mean if we have those kind of structures I believe that's what's done what is supposed to put them because if you go and put the the a cake system they will still rub him there and the company will go comatose right I am believing that he has a modern technology to be able to monitor to the last drop of the the barrel right so how do we how do we start to probably think um um think about the restructuring of the petroleum industry to say okay we need to be able to build up this kind of structure because if custom is telling me spending 3.2 billion dollars just for a system it is way I believe that that system I will see that it is really system right so I mean what do we do you know if you want to like wrap it up nicely to the petroleum industry that would help us to say you know what I think we are on the right track towards you know um proper structures that in the next 20 years 50 years from now we'll see you know I think first things first it took away from the hands of the government entirely nmpc limited it's still government it's still government yes yes it yeah so um I mean stakeholders there's the ministry of petroleum and also the ministry of finance so they're both government entities but to to see what form of uh monitoring system we can use it starts from the upstream like I said won't start this conversation we leave them alone and we let them sit pretty but that's where the problem starts from because if we continually use the same model where sheaves just go offshore carry this product go to wherever we refine it bring it back it doesn't work now we can't account for even what our consumption is in Nigeria any business days today we refuse to tell us because they want to keep using it to collect the city so that's the thing so if we put in technology technology makes life easier you know makes everything easier so the the picture you pay into that out there go to and create and all these other countries that monitor the technology they know how many the capacity of each well head and they know that this well head can produce x amount of crude and when this crude comes in it can be refined to x amount of refined product so it's simple mathematics so you can tell but we don't want to do that because we want to commute to the system right he doesn't want to say don't want to help him I'm not going to say what can they do for me I really love the conversation unfortunately we ran out of time but I get you technology would have to bring you back thank you so much for joining us I mean why it goes conversation even though I feel like one is a very multi thing that's all I'm going to say thank you thank you thank you thank you so much and now before we go I show you follow us across all our social media and this Africa you can interact with us for the drop a comment and more importantly follow like again with some social media like share and invite your families and friends to watch and follow the conversation now if you missed our quote for today here it is again our vision is for a country that grows what it eats and produces what it consumes it is for a country that no longer has to import petroleum products and develop in the creative petrochemical industry and this was from former president vice president Yamio Shiba Joe we'll see you guys on Monday hopefully we'll help you to come to the studio enjoy