tag:blogger.com,1999:blog-23216342.post6594071883097035955..comments2023-10-28T11:41:07.472+01:00Comments on Pause to Ponder: The president has spokentwinstaiyehttp://www.blogger.com/profile/13586738919682959943noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-23216342.post-3571753587669616552007-03-21T13:52:00.000+01:002007-03-21T13:52:00.000+01:00PRES/134 16 March 2007The Chairman,Senate Review C...PRES/134 16 March 2007<BR/>The Chairman,<BR/>Senate Review Committee on the Petroleum<BR/>Technology Development Fund (PTDF),<BR/>National Assembly Complex,<BR/>Three Arms Zone,<BR/>Abuja.<BR/>REPORT ON THE PETROLEUM TECHNOLOGY<BR/>DEVELOPMENT FUND<BR/>I write to acknowledge your letter of invitation on the above named subject<BR/>availing me of the opportunity to respond and clarify some of the issues therein,<BR/>and I thank your Committee for such an opportunity.<BR/>Let me hasten to express my understanding, as I had operated the law in<BR/>the 70s and today, that the three key words to guide the operation of the law are<BR/>found in the title of the legislation: Petroleum, Technology and Development. In<BR/>today’s situation, I will put it this understanding to capacity building and local<BR/>content development – two great issues on which the Administration has<BR/>endeavoured to make significant change and impact.<BR/>Technology Capacity Building and the PTDF Act<BR/>In the wake of the Arab Oil Embargo and subsequent quadrupling of oil<BR/>prices by OPEC, the Petroleum Technology Development Fund (PTDF) Act was<BR/>promulgated by the Yakubu Gowon Administration in 1973 with the purpose of<BR/>building the capacity of Nigerians to be active participants in the then emerging<BR/>oil and gas (petroleum) industry.<BR/>The objects of the Act were clearly to take whatever actions necessary to<BR/>ensure that Nigerians are educated, trained, and developed to be experts and<BR/>key players in petroleum technology. But what constitutes ‘petroleum technology’<BR/>in 1973, and what is it today? These are key issues for reflection as we attempt<BR/>to derive the intentions of the government that enacted the PTDF law for general<BR/>application and utility not only for 1973, but for the 21st century. I was privileged<BR/>to have served that government as a Minister.<BR/>Petroleum Technology in 1973, Today and Tomorrow<BR/>Up until the 1990s when a few universities outside Nigeria began offering<BR/>degrees in Petroleum Engineering, petroleum technology as a field of academic,<BR/>professional or vocational study did not exist. The roadmap to a career in<BR/>petroleum technology is to acquire degrees or diplomas in any of the following<BR/>fields of study:<BR/>• Chemical Engineering and Industrial Chemistry<BR/>• Geology and Geophysics<BR/>• Basic Engineering – civil, electrical, mechanical, electronic, etc.<BR/>• Computer Science and Electronics,<BR/>• Physics and Engineering Physics, and<BR/>• Surveying and Remote Sensing<BR/>In those days, computer science and electronics were at their infancy.<BR/>Indeed, then ‘computers’ were huge mainframes that filled up constantly airconditioned<BR/>rooms that were not accessible to anyone but ‘operators’ to feed<BR/>punch cards and magnetic tapes. Telephones were analogue devices that were<BR/>fixed in one place, and often required manual operators to connect calls over<BR/>copper wires and huge microwave towers, from town-to-town, and country-tocountry.<BR/>The word “Internet” did not exist, optical fibre had not been invented.<BR/>Those who enacted the PTDF Act could not have foreseen a tip of what<BR/>was to happen in the Petroleum Technology field since the information revolution<BR/>that began in the mid-1980s. The invention of IBM Personal Computer, the<BR/>development of optical fibre, digital microwave and cellular technologies,<BR/>deployment of low earth orbit satellite technology and the Internet – all in quick<BR/>succession, have had a profound impact on not only oil and gas education,<BR/>training and capacity building, but on the way governments and businesses<BR/>conduct their affairs.<BR/>Today, a lot of changes in the scope and content of the fields of study<BR/>leading to a career in petroleum technology have occurred with the rapid<BR/>development of miniaturization and digital technologies that have brought down<BR/>the cost of these telecommunication, computer and television technologies.<BR/>Role of ICT in Capacity Building, Education and Government<BR/>Information and Communications Technologies (ICT) can contribute to<BR/>economic and human development. Nations around the world are eager to take<BR/>advantage of this potential. A nation without these basic ICT facilities cannot<BR/>develop or compete or compare to one with proper ICT facilities in the 21st<BR/>century. Hence, the PTDF funding of ICT generally can be justified to enhance<BR/>development of the petroleum industry in Nigeria as well as other industries.<BR/>The convergence of voice, video and data – the telephone (now mobile or<BR/>fixed), the television and digital information – carried over the same line –<BR/>whether wireless or via optical fibre has led to the emergence of ICT as the real<BR/>foundation of all knowledge, all business, all competitive advantage, whether in<BR/>reference to education, healthcare, industries and nations. No business, industry<BR/>or government can compete in the increasingly integrating global economy<BR/>without a robust, ubiquitous and accessible ICT infrastructure, tools and<BR/>continuous training for its people.<BR/>Today, ICT has become so pervasive in every sector, every industry and<BR/>economy that to imagine that it is possible to educate, train and build capacity in<BR/>petroleum technology or indeed any other field of the sciences and the<BR/>humanities without investing in its infrastructure and tools would be foolhardy,<BR/>even absurd. ICT investment today is akin to the investments in electric power,<BR/>roads, railways, airports, and seaports which facilitated domestic and<BR/>international trade, industrialization and growth of market economies in the 19th<BR/>and 20th centuries. ICT is today very much the pencil, pen and paper around<BR/>which the analogue workplace was built upon. It is impossible in the world of<BR/>today to realise the objects of the PTDF Act without substantial investment in<BR/>information and communications technologies, infrastructure, and tools.<BR/>African Institute of Science and Technology (AIST), Abuja<BR/>The Nelson Mandela Institution (NMI) is a not-for-profit foundation<BR/>established by African Academics teaching in Europe, America and Asia with the<BR/>sole objective of establishing four world-class universities of technology like the<BR/>famed MIT and the Indian Institute of Technology. Three prominent Nigerian<BR/>professors – Wole Soboyejo (Princeton), Tayo Akinwande (MIT) and Barth Nnaji<BR/>(Cornell) worked with the likes of the former President of Mozambique, Joachim<BR/>Chissano, Cyril Ramaphosa and Ngozi Okonjo-Iweala to promote the noble<BR/>objective and secure the backing of the World Bank, the Africa Development<BR/>Bank, the European Union and Blair Commission for Africa for the project.<BR/>The goal of the group of professors, technocrats and politicians is to<BR/>establish a technological university in each of East, West, South and North<BR/>Africa, in that order and each will be called the African Institute of Science and<BR/>Technology (AIST), but incorporated in each country of location as a stand-alone,<BR/>national and sub-regional, private university. The first AIST was to be<BR/>established in Tanzania, but with my intervention and involvement of Dr. Ngozi<BR/>Okonjo-Iweala, NMI was persuaded to agree to locate the first AIST in the Abuja<BR/>Technology Village.<BR/>The Federal Government of Nigeria through the FCT Administration<BR/>committed to providing 240 Hectares of land, infrastructure and financial support<BR/>to enable the early take off of the University by 2008. The AIST is to be cofinanced<BR/>by World Bank grants and credits, grants from the EU and the British<BR/>Government, and the African Development Bank. This provides Nigeria a unique<BR/>opportunity to have a world class technological university started on a clean slate<BR/>largely with subsidized funding from bilateral and multilateral development<BR/>partners. The FCT Administration requested and the NMI agreed to relocate its<BR/>head office from Washington, DC to Abuja in 2005.<BR/>Within the AIST is the Gulf of Guinea Institute – G2i. This is intended to be<BR/>the premier faculty of oil and gas technology to serve as center for excellence for<BR/>education, training and capacity building in petroleum technology for the Gulf of<BR/>Guinea region and indeed the African Continent. The Business and<BR/>Implementation Plan for the G2i are provided herewith as Annex I. It is on the<BR/>basis of the foregoing that PTDF was approached to intervene in the<BR/>development of the G2i of the AIST. The intervention of USD 25 million was<BR/>approved out of the USD 40 million requested.<BR/>The AIST is not a government-owned university and therefore does not<BR/>require an Act of the National Assembly to exist. It needs only to be incorporated<BR/>in Nigeria, and be licensed by the NUC to commence operation as a University.<BR/>AIST has already been incorporated as African University of Science and<BR/>Technology – Limited by Guarantee and its application to the NUC in process.<BR/>See Annex II for CAC Certificate of Incorporation. The Certificate of Occupancy<BR/>for AIST’s land has been issued, and architectural and engineering designs<BR/>completed. On 27th of February, 2007 I performed the groundbreaking ceremony<BR/>for the construction of the Gulf of Guinea Institute of AIST Abuja. Contracts for<BR/>the infrastructure are about to be awarded by the FCT Administration. In July<BR/>2007, the first set of participants in Executive Programmes in Oil and Gas will be<BR/>admitted to the AIST and degree programs are scheduled to start in 2008.<BR/>The Abuja Institute of Science & Technology (AIST) with its affiliate center,<BR/>the Gulf of Guinea Institute, will offer academic programmes and services in five<BR/>different areas;<BR/>i) Didactic and Training Services – which will offer postgraduate<BR/>programmes in academic disciplines that apply to the oil and gas sector,<BR/>ii) Economic Services – which would focus on the design, development and<BR/>publication of techno-economic indices on the costs of Oil and Gas resource<BR/>development in the Gulf of Guinea region,<BR/>iii) Engineering Research – which will offer research programmes specifically<BR/>on the construction and exploration problems on offshore drilling, production and<BR/>storage in the Gulf of Guinea,<BR/>iv) Socio-Ethical studies – which will concentrate on research on the impact<BR/>of oil and gas industry in the Gulf of Guinea region and other communities, and<BR/>v) Technical Publication to publish journals of international scholarly interest<BR/>in the oil and gas sector.<BR/>Being one of the largest oil producing countries in the world, this would<BR/>create a world class oil and gas industry training institution in Nigeria. Also it will<BR/>provide an alternative to training institutions outside Nigeria which currently trains<BR/>most of the public and private sector industry workers.<BR/>The intervention of the PTDF is to build the G2i “for the purposes of<BR/>training Nigerians to qualify as graduates, professionals, … in the fields of<BR/>engineering, geology, science and management in the petroleum industry in<BR/>Nigeria” in the express words of Section 2 of the Act, and more particularly<BR/>section 2(b) – ‘subsidies for training’, and section 2©) – ‘endowments to faculties<BR/>in Nigerian universities or institutions approved by the Minister’ . It will be indeed<BR/>a surprising interpretation of the Act to say that the intervention of PTDF in G2i is<BR/>outside its mandate, in the light of the foregoing and clear express provisions of<BR/>the statute. I attach as Annex III the process leading to the ultimate approval<BR/>when I became satisfied that the mandate of PTDF accommodates it.<BR/>Computer for All Nigerians Initiative (CANI)<BR/>The interpretation and application of any law related to any field of science<BR/>or technology, passed in 1973, without taking cognizance of developments in ICT<BR/>and impact on the education, training and capacity building will lead to absurd<BR/>results. In interpreting this law, looking at the narrow meaning of the literal words<BR/>of the Act are unhelpful. Interpretation must begin with deriving the intention of<BR/>the legislature.<BR/>The Federal Executive Council debated this extensively and concluded<BR/>that, and we accordingly submit here that the mischief the PTDF Act sought to<BR/>cure is the very low level of participation of Nigerians in the petroleum industry in<BR/>1973. It is impossible today for Nigerians in the Petroleum Industry in particular<BR/>and the Public Service in general to even communicate with the multinational oil<BR/>companies without ICT infrastructure, tools and training. The CANI was<BR/>introduced by the FGN to accelerate the bridging of the digital divide between the<BR/>public and private sectors of Nigeria on the one hand, and with the likes of Shell,<BR/>ExxonMobil and Chevron that are operating within our oil and gas industry and<BR/>communicating with civil servants in the cause of their daily operations. CANI<BR/>was conceived in furtherance of the government’s march towards e-government<BR/>for efficiency and global competitiveness.<BR/>The program enables public servants generally, including those in the<BR/>petroleum industry to acquire personal computers with Internet access and pay<BR/>over a long period. It is about building capacity in the public service in an<BR/>affordable manner for the greater good of the nation. These computers could be<BR/>used for accessing the World Wide Web (www) via the internet as explained<BR/>earlier. Public servants are encouraged to be computer literate by owning their<BR/>own computers including workers in the petroleum sector and students.<BR/>The chips from Intel and software from Microsoft are subsidized due to<BR/>volume commitments, and the computers are sourced exclusively from Nigerian<BR/>manufacturers, thereby contributing to local capacity building and utilization.<BR/>CANI is a form of subsidy to facilitate training and education for Nigerians<BR/>(section 2(b) of the Act). It is this interpretation of the PTDF Act that guided the<BR/>Federal Executive Council to approve the intervention of the PTDF in CANI, and<BR/>not any sinister insinuations.<BR/>Galaxy Backbone Plc<BR/>The clear need for a national ICT superhighway, similar to what other<BR/>nations have developed has already been made above as such infrastructure is<BR/>as basic to economic development and international competitiveness of Nigeria<BR/>today as the railways, power plants and roadways were to the industrial<BR/>revolutions in Europe and America. This Administration observed that Nigeria did<BR/>not have such an ICT backbone, but virtually every Ministry, Department and<BR/>Agency had completed, planned or ongoing ICT investment project. The News<BR/>Agency of Nigeria, NNPC, NEPA, Railways, NUC and others all had networks<BR/>based on satellite, optical fibre and digital microwave, alongside networks of<BR/>NITEL, —Tel and other private operators. Some state governments like Jigawa<BR/>State also had their own VSAT-based networks.<BR/>I observed that this duplication and waste needed to be curtailed, all our<BR/>ICT infrastructure development projects harmonized and streamlined. This<BR/>enabled standardization, consolidation and learning of experiences in ICT to<BR/>save money and reduce implementation costs. The Cabinet and Inter-Agency<BR/>Committees that studied the several projects recommended the establishment of<BR/>a public-private partnership with majority equity participation by the Federal<BR/>Government to create a National ICT Infrastructure Backbone (NICTIB) that all<BR/>governments, companies and individuals will tap into as our nation’s information<BR/>superhighway. This company is Galaxy Backbone Plc.<BR/>The network would be a shared resource for all arms of government<BR/>including all academic institutions such as: Petroleum Training Institutes, all<BR/>universities and colleges where potential oil industry manpower are being<BR/>trained. The availability of this backbone allows Nigerians access to information<BR/>on any subject of which the oil and gas is one of the most important.<BR/>Without such a national backbone, the basic foundation enabling rapid<BR/>education and training of Nigerians in petroleum technologies and indeed all<BR/>other sectors is non-existent. This has seriously hampered sector and national<BR/>development and the results are self-evident. This is the justification for the<BR/>intervention of the PTDF in the equity and debt stock of Galaxy Backbone Plc. It<BR/>is an investment which will not only help the nation achieve desired greatness,<BR/>the PTDF to fulfill its capacity building mandate, but provide reasonable returns<BR/>which section 1 of the Act alludes to, and Part III, sections 9 and 10 of the<BR/>Finance (Control and Management) Act 1958 allows. It is a very restrictive<BR/>interpretation of the PTDF Act that will lead to the conclusion that this<BR/>intervention is outside the mandate of the Fund.<BR/>In conclusion, technology development in modern times cannot be done in<BR/>isolation for one particular industry or sector alone. For example, the cost of<BR/>providing ICT infrastructure for say a geology department in a university would be<BR/>more or less the same for the whole university. Computer skills are readily<BR/>transferable in all industries, and therefore have multiplier effects in national<BR/>development. The development of the oil and gas industry through the PTDF<BR/>would therefore positively develop other sectors of the economy.<BR/>The desirability for the establishment and incorporation of Galaxy<BR/>Backbone Plc has been explained above. As for the cost of legal and advisory<BR/>services, the Attorney-General of the Federation as the chief law officer of the<BR/>Government is the one that handles and advises on all matters pertaining to<BR/>legal, judicial or documentation matters. When I received the bill for these<BR/>services from the Executive Secretary of the PTDF, I sought the Attorney-<BR/>General’s view. He considered that the cost was reasonable at N300 million<BR/>consistent with the scope of the advisory services, the professional charges<BR/>involving work of this nature, and the level of expertise required as well as the<BR/>standing of Counsel. In spite of that advice, I still reduced the charges by N50<BR/>million.<BR/>With my understanding stated and the explanations above, I will expect<BR/>the Review Committee not to regard the approvals as irregular but fully within the<BR/>mandate of the PTDF.<BR/>PTDF Approved Specific Projects<BR/>As stated in the memo from the Executive Secretary of the PTDF (Annex<BR/>IV), I approved the sum of N20 billion for various projects listed therein.<BR/>Disbursement is handled by the Accountant General of the Federation. I have<BR/>now confirmed that only N10 billion was released to the PTDF. And out of the<BR/>amount released, only about N4.6 billion have been paid to various contractors<BR/>for the projects as detailed in Annex IV. There is therefore no iota of truth in the<BR/>wild allegation that the funds released were diverted to any purpose other than<BR/>the specific projects approved for. I hope the Review Committee will be able to<BR/>physically verify these projects and payments to debunk this irresponsible and<BR/>false allegation.<BR/>DICON Rehabilitation Account<BR/>As to the issue of the release of N1 billion in the name of the DICON<BR/>Rehabilitation Account, I believe that the best way to react to the allegation<BR/>“using it for Mr. President’s vanity project” is to attach unabridged and unedited<BR/>the latest report of the Technical Committee on DICON which is quite selfexplanatory<BR/>for the Review Committee. See Annex V attached.<BR/>It is important to stress that the one billion Naira (N1 billion) was released<BR/>not only fabricate and produce replacement parts for the oil and gas industry but<BR/>to make Nigeria self-sufficient in small arms ammunition production by<BR/>September 2007, and in small arms production by September 2008. The total<BR/>amount expended so far is out of N1 billion released is N364,106,201.00.<BR/>Since the development of the indigenous assault rifle code-named OBJ-<BR/>006 was started in February 2006, months before my September 2006 visit and<BR/>the subsequent intervention of the PTDF, only N50,000 (Fifty Thousand Naira)<BR/>from DICON’s overhead cost was spent on the development of the rifle and<BR/>eleven prototypes. Code-name apart, DICON should be commended for the<BR/>initiative to produce a Nigerian assault rifle from local materials and expertise.<BR/>The Managing Director of DICON has suggested a visit by the Review<BR/>Committee or any other Committee of the Senate for that matter to DICON in<BR/>Kaduna. I will support the acceptance of the invitation for I was marvelously<BR/>informed and enlightened when I visited in September 2006.<BR/>Accept, Mr. Chairman, the assurances of my highest consideration.<BR/>OLUSEGUN OBASANJOtwinstaiyehttps://www.blogger.com/profile/13586738919682959943noreply@blogger.com