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Alison-Madueke and her quest for an improved energy sector

ON April 6, 2010, Dr.Goodluck Jonathan, then Acting President of Nigeria, swore in 38 Ministers after being cleared by the National Assembly. Mrs. Diezani Allison-Madueke then  became  the first female to occupy the petroleum ministry.

*Mrs. Diezani Allison-Madueke, Petroleum Minister

Since she came on board, Mrs. Madueke has not shied away from the onerous task ahead of her and with a very short period to deliver.  She had also made the once stereo-typed sector taken a different approach to issues of national importance.

Dr. Jonathan has  not minced words in making it crystal-clear that the power sector takes utmost priority in his scheme of work alongside electoral reforms, and the person to ensure that this dream does not remain the same is Mrs. Alison-Madueke as she directly oversees the gas sector which fuels the power sector for optimal performance.

She set the ball rolling after her assumption by getting the President’s endorsement of the Nigerian Content Act aimed at ensuring that indigenous companies in the country don’t run aground in the midst of plenty.

The bill has been at the National Assembly long enough and  debated by all the appropriate committees and the NASS in general but without the needed executive endorsement for it to become law.  An industry operator who pleaded anonymity, says on  the bill is a win-win development for the country and no responsible government would allow such a bill continue to get stagnated without the necessary endorsement.

“No matter what people think about the woman at the helm of affairs in this all important sector, the fact remains that such a quick passage of the Nigerian Content Bill has earned her a mention in the history of our country. It shows seriousness on the part of government.

This bill has been there for quite some time and previous government has been dilly-dallying on the matter, politicising it along the way.    There is nothing to lose! It is beneficial to the country because we have under-utilised or even un-utilised expertise within our shores.  This would boost human capacity development, get more people off the labour market, reduce capital flight and so on, the list is endless.

In just about two months in office, Diezani Alison Madueke has among other things, ensured  the passage of the Nigerian Content Development Act, unfolded a 2 point agenda for sustainable gas, announced  new and investor-friendly gas pricing regime to boost power and investment in the gas sector, initiated a sensitization programme  on the heels of the passage of the NCD Act, and pledged  constant Power supply.
Unfolds 2 point agenda for sustainable Gas supply

The Minister has also unfolded a two-point agenda for the gas sector to meet the administration’s aspiration of delivering enough gas to power plants to ensure adequate power supply in the country.

The Minister who unfolded the agenda for the gas sector at a press briefing on Thursday said the focus is to ensure expeditious implementation of the Nigerian Gas Master Plan to attain clear-cut short-term and some medium term objectives as well as position Nigeria as a major player in the global gas market by securing the Final Investment Decision, FID, of the Brass Liquefied Natural Gas by the end of 2010 while refocusing on the Olokola Liquefied Natural Gas project.

She listed the objectives of the two-pronged action to include sustainable supply of gas to the power sector, implementation of a sustainable commercial framework for domestic gas through a review of gas pricing to encourage investors by enabling them secure bankable agreements and the transformation of Nigeria into a regional hub for gas-based industries by signing up world class investors in the petrochemicals, methanol and fertilizers sectors.
New pricing regime to boost Gas Sector investment

The Minister revealed that already a major milestone had  been achieved in the area of gas to power pricing review.
Explaining the newly approved gas pricing regime, the Minister said currently the price of gas to power is two cents ($0.2) per mmbtu of gas, and that by the end of the year, the price of gas would increase to $1/mmbtu.

The price would graduate to $1.50/mmbtu by 2011 and $2/mmbtu by the end of 2013, adding that beyond 2014, it would increase based on inflation rate.

“This effort will move the supply to the power sector (and other sectors) from the current loose, best endeavour basis to one anchored on strict commercial agreements.

This will move the process of gas supply and purchase in Nigeria to world class levels. The template agreements have been finalized and I am reliably informed that negotiations of the fine parts of this agreement are ongoing between PHCN and the supplier companies. I expect that within the next four to six weeks, we shall be in a position to execute these landmark agreements between the power sector and the gas suppliers,” Alison-Madueke explained.

Partners World Bank to secure Gas revenues
The Minister also said  in a bid to concretize the commercial framework for domestic gas, a program is currently being worked out with the World Bank to provide security for gas revenues sold to the power sector in order to ensure that gas suppliers do not lose money for supplying gas to the power sector.

“With the World Bank Partial Risk Guarantee that was initiated in the Gas Master Plan, the problem of lack of confidence on the part of gas suppliers that when they supply gas they will not get paid is now permanently fixed. The World Bank mission is currently on ground in Nigeria working with our team on the gas agreements and perfecting all other necessary agreements in respect of the Partial Risk Guarantee,” she assured.


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