On Wednesday evening, without fanfare or explanation, Nigeria’s acting president Goodluck Jonathan fired the entire cabinet. The reason is clear: feuding and dysfunctional, he regarded the cabinet as an impediment to his stated aim of wholesale reforms.
For ExxonMobil, Chevron, Royal Dutch Shell and the other energy groups who rely on Nigeria for significant chunks of their revenues, the biggest question now is what changes are in store at the petroleum ministry and the national oil company.
The US, which in December imported more crude from Nigeria than anywhere except Canada and Mexico, will be watching closely too.
The labyrinthine creeks of the Niger Delta, under which lie most of Nigeria’s oil and gas reserves, confound all but the most skillful navigators.
The same could be said for Abuja. The shimmering federal capital – built with oil money, much to the chagrin of the Delta’s benighted inhabitants – is a grid of wide, well-signed avenues. But the corridors of power are another matter. Abuja, generally in a state of ferment , is particularly feverish as Goodluck Jonathan, the acting president, wrestles for control with allies of Umaru Yar’Adua, the ailing head of state.
Oil revenues constitute not only 80 per cent of government income, but also the lubrication for the patronage network that is the foundation of Nigerian politics. In a country of big men and weak institutions, personal relationships are everything. But charting the connections can be as bewildering as canoeing through the delta.
It may be that Jonathan will retain many of the sector’s leading men. Rilwanu Lukman, the petroleum minister, has clout as a former Opec secretary general. He is old, and wants the Petroleum Industry Bill – the monumental overhaul of the industry currently before parliament – to crown his career. That it has not been passed years after inception may count against him, as could the lobbying of foreign oil groups who fiercely oppose the tougher terms the bill would impose.
Lukman’s number two, minister of state Odein Ajumogobia, is a fast-rising lawyer with a cut-glass British public school accent who has handled the tough negotiations with oil groups over the renewal of leases to some prime blocks. Industry chatter has it that Lukman is less than thrilled by his deputy’s increasing sway. Some insiders predict that he will replace his boss in the reshuffle.
But Ajumogobia has enemies too and, unlike Lukman, is not a veteran of the industry. If Lukman were to go – or even if not – plenty of senior oil men are convinced that over at the Nigerian National Petroleum Corporation, Mohammed Barkindo’s days as chief would be numbered.
A close Lukman ally, Barkindo might carry the can for the national oil company’s failure to get enough of Nigeria’s bountiful gas to power stations so hopeless that most Nigerians get at best a couple of hours of electricity a day.
He could feel aggrieved, given that the responsibility hardly rests on just one person’s shoulders. But the top job at the NNPC is a hugely influential position and Jonathan doubtless wants someone who owes his job to him rather than his predecessor, rather than a man who, like Lukman, was appointed by Yar’Adua.
All the while, the company that in theory would be transformed by the new legislation into a Nigerian Petronas remains largely opaque, described by one consultant as “un-auditable”.
The frontrunner to take over at the national group is Aminu Babakusa. In charge of marketing, one industry figure describes him as “one of the most influential people in the NNPC”.
Importantly in a nation where ethnicity colours every political move, Babakusa is, like Lukman and Barkindo, a son of the predominantly Muslim north. Ajumogobia, like Jonathan, hails from the delta. A mass promotion of southerners at the expense of northerners would cause severe rumblings, even if the south is where all the oil actually is.
Another contender for the minister’s chair is Emmanuel Egbogah, Yar’Adua’s special advisor on petroleum matters. Egbogah’s signature was on the correspondence between the office of the presidency and the representatives of Cnooc, discussing the Chinese state-owned group’s audacious offer to buy one-sixth of Nigeria’s oil reserves for some $50bn. He is also the brain behind a plan to quell resentment in the delta by diverting 10 per cent of net income from the joint ventures that pump the crude to the communities of the creeks.
Egbogah is generally well-regarded by the industry. By contrast, foreign groups’ nightmare would be an augmented role for Tim Okon. The NNPC’s strategy chief, he is the most fervent of the nationalists who give vent to a long-held suspicion in Nigeria that country is being fleeced. His vision of the bill would vest as much power as possible in the NNPC, a prospect that terrifies the western energy companies.
The coming days will see furious horse-trading. New names could emerge as compromises are brokered. Whoever emerges at the helm will have a year to chart a course to reform before elections that could see the map redrawn once more.