OIL AND GAS GROUP ASSIGNMENT

OIL REFINERY & PROCESSIN G PLANT

GROUP ONE

OIL REFINERIES & PROCESSING PLANT

TABLE OF CONTENT

Abstract 1. Introduction 2. What are oil refineries 3. Categorization of oil refineries 4. What are processing plants 5. Are there distinctions between processing plants and oil refineries 6. What are the licensing agencies and government agencies relating to oil refineries 7. Formality and procedure for acquisition of licenses 8. Legal issues in Oil refinery licensing 9. Ownership structures of oil refineries 10. The Nigerian model for ownership of oil refineries Publicly owned or privately owned 11. The future prospect for oil refineries ownership
12. Nationalization of oil refineries 13. Decentralization of oil refineries

14. Distinction between decentralization and nationalization of oil refineries 15. Recommendation

ABSTRACT: This paper intends to examine oil refineries, a type of processing plant, as well as the categorization of oil refineries. The distinction between oil refineries and processing plants will be discussed, while identifying the licensing agencies and government agencies relating to oil refineries in Nigeria. The formality and procedure for acquisition of licenses will also be explored. The ownership structure of oil refineries generally, with special regards to the position in Nigeria will be analyzed, whether publicly owned or privately owned refineries. The future prospects of oil refineries ownership will also be discussed. The nationalization and decentralization of oil refineries will be discussed, with distinctions noted. Various legal issues in licensing will be discussed finally, with recommendations proffered. INTRODUCTION: The Nigerian economy is largely dependent on oil and petroleum products for the generation of revenue within its government. Though oil is available in great reserves all over the country wide expanse, it is elementary science that this black hydro carbon substance in its natural depository form cannot be utilized for energy by carbon utilizing machineries and cannot in turn create wealth for the nation. Hence, the hydro carbonic substance must be extracted and processed for them to be of colossal relevance to the nations financial state. The medium of processing these naturally

occurring oily, bituminous liquid composed of various organic chemicals called petroleum or crude oil is the OIL REFINERY WHAT IS AN OIL REFINERY? A refinery is a production facility composed of a group of chemical engineering unit processes and unit operation refining certain materials into production of value. The ordinary meaning of a refinery is to remove impurities. The legal definition is offered in the REGULATION 48 OF THE PETROLEUM REFINERY REGULATIONS made pursuant to the PETROLEUM ACT 1969, in which refining is said to include the liquefying of petroleum gas or gases by whatever method, separating of crude oil by whatsoever method into any grade of petroleum product, treating and up-grading of any petroleum or petroleum product by whatsoever method into other product or products. Generally, however, an oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products such as gasoline, diesel, fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas. Petroleum refining and processing involves a series of steps by which the original crude oil is converted into products with desired qualities in the amount dictated by the market. In fact, refining is essentially a group of manufacturing plants that vary in number with the variety of products in the mix. Refining processes must be selected and products manufactured to give a balanced operation that is crude oil which must be converted into products according to their level of demand. There are however various methods employed in refining petroleum, depending on the results intended and the level of technology as well as raw materials available. The main function of a petroleum refinery is to convert crude oil (feedstock) into commercial transportable products, such as gasoline and diesel fuel by means of distillation (separating components by boiling points) and chemical reactions resulting in the production of varies valuable fuels and lubricants and also producing feedstock for other downstream processes. The configuration of a refinery depends on the range of crude quality (feedstock) that it is able to handle and on the final product mix it is designed for. The major products of oil refineries include the following:

Liquid petroleum gas Petrol Naphtha Kerosene Diesel fuel Fuel oils Lubricating oils Paraffin wax Asphalt and tar Petroleum coke

In a refining operation, Vacuum Distillation is used to separate the less volatile products, such as lubricating oils, from petroleum without subjecting the high boiling products to cracking conditions. Atmospheric and vacuum distillations are major parts of refining operations and no doubt will continue to be used as the major and primary refining operations. Another option at petroleum processing is the use of the THERMAL PROCESSING which is one of the earliest conversion processes used in the petroleum industry. The process is called THERMAL CRACKING; majority of which processes use temperatures of about 445o 540o (850of 1005of) and pressure of 100 1000Psi (690 6895kpa). The use of hydrogen in thermal process is perhaps the single most significant advancement in refining technology during the 20th century. The process uses the principle that the presence of hydrogen during a thermal reaction of a petroleum feedstock will terminate many of the coke forming reactions and enhance the yields of the lower-boiling components, such as gasoline, kerosene and jet fuel. The process is called the HYDROPROCESS; with two major typesdestructive hydrogenation (hydro cracking) which is characterized by the higher molecular weight

constituents in a feedstock to lower-boiling products; and the non-destructive hydrogenation used for improving product quality without appreciable alteration of the boiling range. The different types of refineries available include as follows: OIL REFINERY: which converts crude oil into high-octane motor fuel (gasoline/petrol), diesel oil, liquefied petroleum gases (LPG), jet aircraft fuel, kerosene, heating fuel oils, lubricating oils, asphalt and petroleum coke. SUGAR REFINERY: which convert sugar cane and sugar beets into crystallized sugar and sugar syrups. NATURAL GAS PROCESSING PLANT: which purifies and converts raw material gas into residential, commercial and industrial fuel gas, and also recovers natural gas liquids (NGL) such as ethane, propane, butane, and pentanes. Other available types of refineries include salt refinery, metal refinery, and vegetable refineries. CATEGORIZATION OF OIL REFINERIES 1. Topping Refinery Crude is a mixture of petroleum products. The topping refinery just separates the crude into its constituent petroleum products by distillation, known as Atmospheric Distillation. Topping Refinery produces naphtha but no gasoline.

2. Hydroskimming Refinery The hydroskimming refinery is defined as a refinery equipped with Atmospheric Distillation, naphtha reforming and necessary treating processes. Hydroskimming refinery is more complex than a topping refinery and it produces gasoline. Hydroskimming refinery produces a surplus of fuel with unattractive price and demand. 3. Cracking Refinery

The cracking refinery is, in addition to the above, equipped with vacuum distillation and catalytic cracking. The cracking refinery adds one more level of complexity to the hydroskimming refinery by reducing fuel oil by conversion to light distillates and middle distillates. 4. Coking Refinery The coking refinery refers to the one which is equipped to process the vacuum residue into high value products using the Delayed Coking Process. The coking refinery adds further complexity to the cracking refinery by high conversion of fuel oil into distillates and petroleum coke. Catalytic Cracking, Coking and other such conversion units are referred to as Msecondary processing units. The Nelson Complexity Index, captures the proportion of the secondary conversion unit capacities relative to the primary distillation or topping capacity. The Nelson Complexity Index typically varies from about 2 for Hydroskimming refineries, to about 5 for the Cracking refineries and over 9 for the Coking refineries. Refineries, with high Nelson Complexity Index have the necessary flexibility in processing a wide variety of crudes and are capable of achieving higher value addition1. WHAT ARE PROCESSING PLANTS Processing plants are the machinery used to process raw materials. The raw materials are processed to remove the impurities in them and make them usable as end products. There are: meat processing plants, salt processing plants, milk processing plants, poultry processing plants, natural gas processing plants and so on. NATURAL GAS PROCESSING PLANTS Natural gas processing is a complex industrial process designed to clean raw natural gas by separating impurities and various non-methane hydrocarbons and fluids to produce what is known as 'pipeline quality' dry natural gas. Associated hydro-carbons known as natural gas liquids (NGLs) can be very viable by products of natural gas processing. The complete processing of natural gas takes place at a processing plant in a natural gas producing region. In the gas processing plant, the raw natural gas is dehydrated and processed through acid gas removal,
1

http://www.ril.com/html/business/refining.html. Types of Refinery &Nelsons complexity.

molecular sieves and drilling units to remove hydrogen sulfide. Natural Gas Liquids (NGLs) and liquid Petroleum Gas (LPGs) are ethane, propane, butane, isobutene, pentane. They have a higher level than the natural gas and they are sold as feedstock for petrochemical processes. The actual practice of processing natural gas to pipeline dry levels involves four main processes to remove the various impurities. Oil and condensate removal Water removal Separation of natural gas liquids Sulfur and carbon dioxide removal

In March 2011, Nigeria awarded a $2 billion contract to Eni SpA (ENI)s Agip and Oando Plc (OANDO) to build a natural gas processing facility at Obiafu in the southern Rivers state. The plant will process wet gas from fields operated by Chevron Corp. and Royal Dutch Shell Plc (RDSA) to supply petrochemical and fertilizer plants to be built in the Delta and Lagos. Nigeria plans to develop its gas reserves and build pipelines to supply power plants and export. The West African country selected 15 companies including Shell, Chevron and Oando in 2009 to participate in its development plan. DISTINCTION BETWEEN OIL REFINERIES AND PROCESSING PLANTS Both processing plants and oil refineries perform the same function. They both process raw materials to remove the impurities and make the end products usable for commercial use. The major difference between processing plants and oil refineries is the end products that result from the processing. LICENSING AGENCIES AND GOVERNMENT AGENCIES RELATING TO OIL REFINING The government is responsible for licenses and regulating of oil refinery activities in Nigeria. By virtue of the PETROLEUM REFINING REGULATION ACT, the act that regulates this affair, the

government agencies are Department of Petroleum Resources, the Ministry of Petroleum resources. However, by virtue of Regulation 2 & 3 of the PETROLEUM REFINING REGULATION ACT, the Minister of Petroleum resources is the one responsible for granting licenses for the acquisition and construction of licenses in Nigeria. FORMALITY AND PROCEDURE FOR ACQUISITION OF LICENSES This is also referred to as guidelines to establishing a petroleum refinery because to establish an oil refinery in Nigeria, a petroleum refinery license must be obtained. Pursuant to Regulation 2 & 3, PETROLEUM REFINING REGULATION ACT, the approval process is in stages ending in a grant of a license The procedure of private ownership of refineries, OLISA says is A license in a prescribed form granted by the minister of petroleum resources must be obtained before the construction or operation of a refinery may be undertaken by any person The statement has four (4) basic components. The first is that refining of crude petroleum requires a license to refine and refining without a license is a criminal offence. Secondly, the minister is the only one from whom the beneficiary can obtain a license. Thirdly, the license refers to construction or operation. Fourthly, and most importantly, the beneficiary is any person. This means that one need not be a concessionaire to obtain a license for refining. The implication of this is that the license to construct a refinery must be distinguished from a license to refine crude oil. There are guidelines in the regulation for the construction of refinery, petrol chemical and gas processing plants. Upon completion of the construction, the Department of Petroleum Resources (DPR) would have to examine the construction of the pipeline constructed to ensure that it meets the standard required. Where it is not satisfied, the licensee may have to make adjustments, for example, where it lacks to meet environmental and safety standards. The Petroleum Refining Regulations makes provisions for guidelines of construction of petroleum refinery

The guidelines for the application for a license and for a modification of a refinery or processing plant are available from the department of Petroleum resources. The guidelines require the applicant to submit to the department in support of his application, detailed studies and information concerning the refinery or plant as appropriate. They include feasibility study, basic design, engineering and procurement, fabrication, environmental and safety protection factors and measures as well as environmental impact assessment report (E.I.A). The details required for each item are contained in the guidelines to which applicants are advised to refer. The requirements necessary for a grant of a license to construct and operate a refinery or processing plant include hazard and operability reviews at certain stages of the design and development and physical inspection of the refinery or plant to ascertain conformity with the approved design. If the inspection report is satisfactory to the minister, he will grant the approval to commission and operate the refinery or plant. The licensee must satisfy the following conditions before approval can be granted by the Minister: 1. The appointment of a qualified refinery or plant manager with notification thereof to the minister 2. Making a complete equipment reports 3. Availability of adequate spare parts 4. Having approved operating manuals 5. Confirmation that all environmental protection standards set during the design stage have been met 6. The existence of fabricational and effective fire prevention and fighting organization and several other conditions. Such conditions apply mostly to the following ancillary facilities and purposes

i.

If the licensee have to operate a power generating plant, he needs approval under the ELECTRICITY ACT2

ii.

The same goes for the establishment of communication facilities, he needs the approval of the Nigerian Communication Commission under the NIGERIAN COMMUNICATION COMMISSION ACT 1992

iii.

If the licensee must construct water treatment plant for industrial use, approval must be obtained from the water corporation

iv.

If the licensee must construct water-port facilities e.g jetties and wharves, approval must be obtained from the Nigeria Ports Authority under the PORTS ACT3

v.

Office, residential buildings need plans, permits and approvals from the relevant authorities

The phases can hence be summarized thus: 1. Conceptual study and basic design is submitted to the petroleum minister. This includes the

general visibility of the product, market plan, product specification, sight selection, proposed crude oil (or feed stock), preliminary environmental impact statement 2. Applicants will undertake detailed engineering studies in consultation with the Department

of Petroleum Resources (DPR) Engineers. If satisfied, the minister will grant a preliminary license which attracts a none refundable fee and this will be valid for 2 years, after which it will lapse 3. Applicants can then proceed to procurement and construction (EPC) phase. At this stage,

the validity of the license is 18 months, after which it will lapse 4. An operation license is granted on physical completion of the refinery or plant, and a site

inspection by the DPR and experts from the NNPC to ensure the physical plant construction corresponds to the approved design. On the receipt of a satisfactory inspection report, the minister will grant approval for the commissioning and operation of the refinery. These are the stages one must undertake to get a license.
2 3

CAP 106, LFN 2004 CAP 361, LFN 2004

LEGAL ISSUES IN OIL REFINERY LICENSES A license is a personal priviledge in the form of authority or permission granted to a person to enter and use premises or perform some acts therein which would otherwise be wrongful or amount to trespass. However, the concept of licenses in the area of oil refinery in the energy sector, is relatively different as licenses in the ordinary sense means a mere priviledge with the possibility that another can be the recipient of a grant of license in the same subject matter, however in the area of oil refining, it is impracticable to grant a license to different parties in respect of the same refinery. In this instance, license has an upgrade in status and in actual fact confers exclusive right on the licensee subject to the right of the grantor and this makes it similar to a lease in the property. Secondly, based on experience it has been proven that the construction of an oil refinery takes at least 36 months to complete barring unforeseen circumstances , However in the Petroleum Refining Regulation Act, the license for procuring and construction lapses after 18 months. Hence, the time allotted for the duration of the license is shorter than the shortest possible time for the construction of a refinery. Where the licensee satisfies the DPR, the licensee will yet apply for another license under the HYDROCARBON OIL REFINERIES ACT. Thus a holder of a license to construct and operate a refinery must also obtain a refiners license before the commencement of his refining operations. An application for a refiners license should be made in a prescribed form and submitted to the Board of customs and Excise of the Federal Ministry of Finance with respect to the premises specified in the application. The purpose of the involvement of the Board of customs and excise is to ensure that proper records of data are available for the Board of Inland Revenue to ensure the collection of the appropriate revenue to the government. Under petroleum profits tax computations, the board also has powers to require he licensee to make such entries as the board pleases. Finally, the licensee is under an obligation to carry out his refining under good refinery practices which include but are not limited to ensuring strict fire and safety regulations, suitable protective clothing, equipment, employment of trained staff and training inexperienced workers, accident

prevention facilities including instant reporting of accidents and availability of functional medical facilities and first aid services.

OWNERSHIP STRUCTURE OF OIL REFINERIES Several possible ownership structures could arise in the oil industry. Various writers have

identified various structures existing world over among ownership of oil refineries. In An Analysis of Possible Oil Industry Ownership Structures in Post-War Iraq4, Rebecca Fortson states that the ownership structure may include a state-owned industry, a competitive industry composed of private firms, or government-owned, but outsourced to private firms. The Ownership categorization, she proffers is: I. State-Owned Industry In a state-owned industry, the government controls the production and sale of the resource. Under this system, any profits derived from the industry would go straight to the government, which could then be used for further investment in the industry, public works, or however the government sees fit. Since barriers to entry in the oil market are high due to the capital investment needed, and the permits required to extract the oil from the land, a state-owned industry would more easily be able to conquer such barriers. For example, it might be easier for a government to procure a loan to finance oil exploration and drilling than it would be for a small firm to raise the necessary funds to enter the oil market. Countries that are members of cartels, such as OPEC, must cooperate with the cartel regarding output levels. If the oil industry is state-owned, it would be easier to coordinate with such organizations than if several private firms comprised the industry in the country. It must be taken into account, however, that if the government owns the industry, profits may not be maximized; effective oversight might not take place, making inefficiencies and corrupt practices more likely. For example, according to Griffin and Steeles Energy Economics and Policy, politics in areas such as personnel could result in inefficient hiring practices, with emphasis on patronage, political favors and seniority. According to Griffin and Steele, national oil companies are grossly
4

December 2004, Department of Economics, Department of International Affairs, The Florida State University

inefficient as judged by standard tests of business performance, for several reasons. One, for example, is that public companies are more risk averse than private companies. The Minister of Oil will still receive his salary whether his country produces 2.5 million barrels a day or 4.0 million barrels a day; there is no financial incentive for the Minister to risk the political fallout that is possible if a risky investment goes wrong, or if an investment that has the potential to have high returns in the long-run has only a small yield in the short run. II. Private-Industry In privately owned industry, two types of situation could arise: One, a single, privately-owned company could dominate the market; or two, a competitive market could arise. i.) Single Private Firm - If a single private firm dominates the industry in the country, the producer would first have to overcome the high barriers to entry. If the government charges a high fee in order for the firm to obtain the rights to develop oil, and then taxes the firms profits, then the government could benefit from this source of revenue (however, the government could do this also within a competitive industry). However, if a single firm is responsible for the entire oil industry in a country, it would have less incentive to create safe working conditions for laborers, or to pay decent wages since there would be no other options for workers in the industry. If the private firm is in collusion with a corrupt government, then several problems could result. For example, there might not be sufficient oversight. Financial incentives might cause government officials to look the other way when it comes issue such as enforcement of taxes, or safety concerns for workers. Also, a private company would be less concerned with the political implications of its actions. For example, if a private company concludes that it would be too costly to produce (or not produce) a certain amount of oil, it will likely do so, regardless of international opinion. And if, on the other hand, once a private firm has dominated the industry, if the government and the firm do not cooperate, or are on bad terms, production could be slowed, creating inefficiencies in the process. ii.) Competitive Market - In a competitive market, multiple producers facing a horizontal demand curve would compete to offer the best quality product at the lowest cost to attract consumers, and would be forced to pass along cost savings in the form of low prices to the consumers. Once firms

overcome the barriers to entry, the government could benefit from revenues generated by taxes and fees. In a competitive market, inefficiencies and corruption are less likely to occur because each firm will have the incentive to maximize profits and follow labor practices that will attract and retain quality workers. However, it could still be difficult to ensure cooperation in the international arena, such as OPEC membership, for example. Profits would accrue to the private company, but the government may also profit through taxes and fees. III.) Government-Owned Out-Sourced Industry A third possible option is a government-owned industry that is outsourced to private producers, i.e. the government owning the oil industry and leasing the rights to the industry to a private company, such as ExxonMobil. Under this system, the government would benefit from ownership rights, taxes, and industry oversight, easing political concerns. The private company would have an incentive to maximize profits and take risks, therefore increasing potential returns while keeping total costs as low as possible. However, too much government regulation could result in decisions by firms not to enter the market, in which case oil fields may not be developed, and many of these benefits may not be realized. A possibility to consider under a system such as this would be a system in which citizens of the country receive a dividend of the profits, such as that used in Alaska. Alaska created a Permanent Fund to distribute dividends from oil revenues to its citizens in light of exploding oil revenues. Such a system does allow for private ownership and investment, while ensuring that the citizens of the developed area profit from oil revenues as well. However, the government must have an effective mechanism to distribute such revenues and ensure that all citizens receive their share of the profits. OIL REFINERIES IN NIGERIA5 The ample presence of natural oil in Nigeria has led to the establishment of many oil refining centres across the country. The Niger Delta oil refineries are extremely adept at producing quality

www.nnpc.com

oil. The first private refinery in Nigeria, the Amakpe International Refineries is quite famous, and it deals with the business of crude oil. The downstream industry in Nigeria is well established. NNPC has four refineries, 2 in Port Harcourt Port Harcourt Refining Company (PHRC), one each in Kaduna Kaduna Refining and Petrochemical Company Limited (KRPC) and Warri Warri Refining and Petrochemical Company Limited (WRPC). The refineries have a combined installed capacity of 445,000 barrel per day. A comprehensive network of pipelines and depots strategically located throughout Nigeria links these refineries. The PHRC is made up of 2 refineries, located at Alesa Eleme near Port Harcourt with a jetty (for product import and export). The jetty is located 7.5 km away from the refinery complex. In 1883, the Port Harcourt refinery with 60,000 bpsd name plate CDU capacity and the tankage facilities were acquired by NNPC from SHELL. Subsequently, a new 150,000 bpsd export refinery was built in 1988 and commissioned in 1989. Therefore, the current combined installed capacity of PHRC is 210,000 bpsd. The installed capacities of KPRC and WRPC are 110,000 bpsd and 125,000 bpsd respectively. NNPC, through its subsidiary, the pipelines and products marketing company (PPMC) supplies only bulk customers. They, in turn, meet the need of millions of customers across the country for products ranging from gasoline and jet fuel to diesel, fuel oil and liquefied petroleum gas. NNPC produces linear alkyl benzene, benzene, heavy alkylate, and deparafinated kerosene at its Kaduna Refinery complex. Linked to the Warri Refinery are 35,000 metric ton per annum (mtpa) polypropylene plant and an 18,000 mtpa carbon black plant. From the above, it is obvious that the general existing trend of oil refinery ownership in Nigeria is majorly publicly owned refineries. Nigerias oil is refined in two major ways. About 30 percent is refined in Nigeria, in the existing refineries, while 70 percent is exported abroad, usually United States and Britain for refining. The refined oil is imported back into Nigeria at a higher cost. THE FUTURE PROSPECTS OF OIL REFINERY OWNERSHIP

Oil refineries convert crude oil into fuel products such as lubricating oils, bitumen and chemical feedstock. There are 43 operating and 4 mothballed oil refineries in Africa which range from small topping and reforming refineries to sophisticated complex refineries which can compete with the best in the world and 4 synfuel plants . Even with the available refineries it is unfortunate that the Nigerian oil industry has during the last years produced well below capacity and this was blamed on operational problems. According to the Oil and Gas Journal {OGJ}, Nigerias state held refineries have a combined capacity of 438,750 bbl/d but problems ranging from sabotage, fire, poor management, lack of regular maintenance and the likes have reduced the operating capacity to around 214,000 bbl/d . To increase refining capacity and solve the problems of availability and supply of fuel for domestic use, the Government has started involving private sector participants in the petroleum refining aspect of the critical energy sector by granting permits to build and operate several independently owned refineries and this is being done in three ways which are: 1. 2. 3. Nigerias state held refineries have been slated for privatization Plans have been made for several small independently owned refineries There are talks on constituent states establishing and owning refineries

As to the privatization of state held refineries, in 2007 under the administration of President Olusegun Obasanjo, the Government began plans to privatize state entities by selling NNPCs four oil refineries, petrochemical plants and its pipelines and products marketing company [PPMC]. 51 percent equities in both Kaduna and Port Harcourt refineries were sold to BlueStar Consortium. However the sale was reversed by the administration of YarAdua after calls by the Nigerian Labour Congress that the refineries were under sold amongst other things with the ownership passing back to the NNPC , who have so far failed to fix the problems with the refineries. As of now there has been no further concrete or tangible plans to privatise the 4 state held refineries. However, in respect of the plans being made for the establishment of independently owned refineries, commendable efforts have been made by the Government in that aspect. On May 2002, the Federal Government granted preliminary licenses to eighteen (18) private companies to build and operate refineries in the country and they are:

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.

Akwa Ibom Refining and Petrochemicals Badagry Petroleum Refinery Ltd. Clean Waters Refineries Niger Delta Refinery and Petrochemicals Company Ltd. Ilaje Refinery and Petrochemicals NSP Refineries and Oil Services Ltd. Ode-Aye Refinery Ltd Orient Petroleum Resources Ltd. Owena Oil and Gas Ltd. Rivgas Petroleum and Energy Ltd. Sapele Petroleum Ltd. Southland Associates Ltd South West Refineries and Petrochemicals Company Starex Petroleum Refinery Ltd The Chasewood Consortium TONWEI Refinery Tolal Support Refineries Union Atlantic Petroleum Ltd

Despite the issuance of private license by the Obasanjo administration to the above eighteen companies, it is discouraging that seven years after, none of the private investors can boldly say that anything worthy of note has been recorded as there has been no tangible progress.

Lastly, on refineries being established and owned by constituent states, this has already manifested with Akwa Ibom State government concluding plans to build a refinery at Eket, Akwa Ibom State. The Edo State government has also obtained approval from the federal government to build an oil refinery in the state, with the Lagos State government considering the possibility of establishing its own refinery. With the above steps being taken, it can be said that the privatization of the oil refining aspect of the energy sector, if well handled, would be a welcome step as it would result in more investors from across the globe, achieve improved employment opportunities and demonstrate to the outside world that Nigeria is capable of achieving greatness, the process has been slowed down by various challenges which are listed below: 1. Concerning state owned refineries such as that intended by the Lagos, Akwa Ibom, and

Edo States government and other government which have not yet signified interest, there has been some criticisms that these states are relatively far from the source of crude oil, therefore for them to be fully operational, more pipelines and other mode of transportation has to be provided with more money and time expended than who have been if such refinery was located at or situated nearby an oil well. It has been asked that where else can anybody build a refinery outside the Niger Delta that would be feasible and more relevant, make economic sense. It would be very difficult or unreasonably expensive to site such facilities in areas that are very far from where the crude oil feedstock is expected to come and if this is eventually done, what is the guarantee that such facilities would have access to the source of the crude oil feedstock ? It has been suggested that those constituent states with plans to establish and own refineries should establish such in the Niger Delta, however this might lead to the problem of inter states relationship. Also it is almost impossible that the government and people of Niger Delta will not ask for a part of the shares of the company, perhaps even a controlling share. It can be seen that this avenue is fraught with challenges and the likes. 2. Also, truth be told, the hostile operating environment has been the major, if not the only

obstacle faced by the licensees in the nations quest to establish privately owned and operated refineries. Few investors are ready to put money in a dangerously volatile environment as we have today in the Niger Delta and other related regions of the country. Also fewer financial institutions

anywhere in the world, even in Nigeria would like to sink its funds into ventures in such areas. International Oil Companies (IOCs) view investments in refineries as providing poor financial returns and this is one of the reasons why new refineries have not been built in the United States or Europe in over 25 years . 3. Another challenge faced by the private investors is the amount of time necessary to build

and furnish a fully operational refinery. It has been proven that construction work may span up to 36 months or more i.e. if there is no unforeseen circumstance such as unfavourable weather, shortage of funds and the likes. After the construction, the next step is the outfitting of the refinery to international standards. This process involves the input of the Department of Petroleum Resources (DPR) which is the federal governments agency responsible for the licensing and regulation of petroleum companies in Nigeria. Here the DPR engineers would have to test and inspect designs, engineering metrics and where possible, physically travel to the manufacturing facilities of the machineries in question to ensure strict adherence to the blue print. All these take time talk less of in Nigeria where things have the habit of dragging on. The relevance of this criticism can be seen in the reality that seven years after the granting of 18 licences, some have not finished construction. 4. The bidding process for the granting of the private licenses was based mostly on the

ministers discretion. What instrument was put in place to ensure that there was no favouritism involved in the process of selection? How sure are we that the owners of the licensed companies are not cronies of certain individuals in the government sector? How sure are we that these companies have sound financial backing? Also these licensed companies must submit their basic design packages prior to the granting of a further Approval to construct and License to operate the plant. Who approves these basic design packages? In what way have the government made efforts to be accountable to the Nigerian people? From the above we can see that there are numerous questions attached to the privatization process and this is to be expected as the have been numerous privatization exercises in the past which have in one way or the other turned into national disasters. It would be preferable if the government made efforts to answer these questions now so that necessary criticism can be made with solutions proffered early. 5. It is plain common sense that projects of this magnitude and complexity deserves the

engineering prowess and expertise of experienced engineering firm. Note that this does not mean

just any experience but experience in the building of oil refineries and manufacture of the necessary equipment and plants. This requirement has met a lot of criticism as though commonsensical, it has reduced the chances of Nigerian engineering firms thereby taking away employment opportunities with foreign companies getting this opportunities as can be seen in the case of the Amakpe International Refinery(Nigeria) who hired Ventech International Engineers based in Pasadena, Texas for equipment manufacture and fabrication . A very important question begs to be answered and it goes thus how many refinery construction firms would be ready to use an all or most Nigerian workforce for their project? Also since foreign companies are likely going to be continuously employed, how would the Nigerian companies get the necessary experience? 6. Also there have been cries for deregulation as private investors are complaining that

government despite granting them licenses to set up refineries have refused to sell crude oil to them at the subsidised price and most have decided to export whatever they produce till there is deregulation. This goes against the spirit of granting the licence and this leads to another question which is what structured measures have been put in place to prevent these private from using their advantage to the disadvantage of Nigeria? espite the above criticism, there are certain factors working for the concept and practice of private oil refineries which though few seem to overshadow the challenges First, there is the advantage of being the host company which impliedly means that if done properly, Nigeria has an advantage as the approval of the government is necessary in almost every step of the process,(from the construction to the outfitting to the operating of the refinery. With this advantage, demands can be made on these private investors with emphasis on employment benefits for Nigerian citizens, training at different stages and technology transfer for all aspects. The best part of the advantage is that the Federal government can reserve the right to make further demands in the future. Secondly, there is the advantage which can be seen from the interview with Akwa Iboms state governor where he said thats the irony of it. The federal government still has to know what is going on because in the final analysis, it owns the oil. It owns every mineral asset in the country, so we still have to buy oil from them and they have to tell me the whys and wherefores of selling this thing. This is the most important advantage because without the oil the whole concept of the

oil refinery is a bust and the private investors are very much aware of this fact. This can be used as a great bargaining instrument. Based on the above it can be inferred that Nigerias prospect in the foray of privatization of her oil refinery aspect of the energy sector is dependent on how the government responds to the various situations on ground. It is advised that Nigeria should study the governments that have gotten it right and those that got it wrong so as to make informed decisions. WHAT IS NATIONALIZATION? According to the Blacks law dictionary6, nationalization is the act of bringing an industry under governmental control or ownership. It is a process of taking an industry or asset into public ownership of a national government or state. It normally refers acquisition of private assets but may also mean assets owned by lower levels of government. For a proper understanding of the above, it should be understand that an industry is a distinct group of productive or profit-making enterprise7 ; it is also an organized economic activity connected with the production, manufacture, or construction of a particular product or range of products; it refers to widespread activity: an activity that many people are involved in, especially one that has become commercialized or standardized8 . Industry, in a general sense, is the production of goods and services in an economy. The term industry also refers to a group of enterprises (private businesses or government-operated corporations) that produce a specific type of good or servicefor example, the beverage industry, the gold industry, or the music industry. Some industries produce physical goods, such as lumber, steel, or textiles. Other industriessuch as the airline, railroad, and trucking industriesprovide services by transporting people or products from one place to another. Still other industries, such as the banking and restaurant industries, provide services such as lending money and serving food, respectively. The word industry comes from the Latin word industria, which means diligence, reflecting the highly disciplined way human energy, natural resources, and technology are combined.

6 7 8

17th edition Merriam-Websters dictionary and Theusaurus Encarta Electronic Dictionary

Hence, the act of bringing an industry under government control, as Blacks Law defined nationalization, means governmental control over a group of enterprises that produce a specific type of good or service. Nationalization, in broad economic terms, is the governmental appropriation of property other than land, transferring it from the domain of private property to national control. More specifically, the term designates the assumption by a nation of the ownership of privately owned industry, distributive enterprises, or other businesses or services. When applied as part of socialist or Communist programs for abolition of private property, nationalization is sometimes known as socialization. Following a severe change in government, such as a revolution, nationalization may be effected by expropriation without compensation to the owners of the property, as in Soviet Russia in 1917-18 and in Cuba in 1959. In more gradual governmental evolution, property appropriation may be effected by some form of payment to the owners, as in the United Kingdom after the installation of the Labour Party government in 1945. However, In Oil and Gas in Nigeria,9 Omoregbe referred to Nationalisation as the legal taking of the property of an alien. He adds that in earlier times, it was more commonly referred to expropriation. On whether nationalization is the same as expropriation, research has revealed that expropriation, unlike nationalization, may occur without compensation to the former owners of the property or the asset. Encarta states that while expropriation is the forced assumption of ownership of private property by a government, often without fair compensation. Nationalization is expropriation by a national government. Osborne Concise legal Dictionary has defined expropriation as compulsorily depriving a person of his property by the state (perhaps without compensation). In the same vein, the Chambers dictionary defines Expropriation as being to dispossess of property, especially for use by the state

Yinka Omorogbe, Malthouse Law Books (simplified series), 2001, p. 178

Nationalization, according to the same chambers dictionary means to make national; to make the property of the nation; to bring under national management Compensation is a key issue in nationalization. The traditional western stance on compensation was expressed by the Secretary of State of the United States of America, Cordell Hull, during the 1938 Mexican nationalization of the petroleum industry that compensation should be prompt, effective and adequate. These three principles guiding compensation have been commonly referred to as the Cordell Hull Formula. Prompt refers to the time of payment, which should be as soon as the property has been taken. Adequate refers to the amount of compensation payable. Effective refers to compensation which is in a readily convertible currency. Hence, compensation in kind will not be referred to as effective. The country is obliged under traditional international law to pay the deprive party the full value of the property taken. Opposition in this regards, has been from developing countries, who believe that this assets should be left to the sovereign state. The United Nations General Assembly Resolution on Permanent Sovereignty over National Resources, however states in Resolution 1803 (XVII) of 1962 that: Nationalization, expropriation or repositioning shall be based on grounds or reasons of public utility, security or the national interest which are recognized as overriding purely individual or private interest, both domestic and foreign. In such cases, the owner shall be paid appropriate compensation in accordance with the rules in force in the state, taking such measures in the exercise of its sovereignty and in accordance with international law. In any case, where the question of compensation gives rise to a controversy, the national jurisdiction of the state taking such measures shall be exhausted. However, upon agreement by sovereign states and other parties concerned, settlement of the dispute should be made through arbitration or international arbitration

There have been a few nationalizations concerning the oil industry, with major arbitrations including the Texaco v. Libya10, Aminoil Case (Kuwait v. American Independent oil company)11, BP case (U.K v. Libya)12, Liamco Case (Libyan American Oil Co v. Libya)13, Amoco Case (U.S v. Iran)14 According to Omoregebe15, traditional international law states that expropriation is lawful if the following conditions are met: 1.If it is not discriminatory 2.If it is for a public purpose, and 3.If prompt, adequate and effective compensation is paid. The advantages that nationalization provides as often stated by states that practice nationalization is that it allows for the fostering of national identity. It also guarantees indigenous control of national resources. More so, national and local government have seen the advantages or keeping key strategic assets or sensitive industries e.g the security & power industry, within confines of the national government. If properly managed, it may also lead to greater standards of living for citizens of the state. It is also an effective medium to prevent capital flight (i.e. where income generated from a nation is carried into another nation) WHAT IS DECENTRALISATION? Decentralization is a process of dispersing decision making governance closer to the people and/or citizens. It includes the dispersal of administration or governance in sectors or areas like engineering, management science, political science, political economy, sociology and economics. The Chambers Dictionary defined decentralization as to withdraw from the centre, to transform by transferring functions from a central government, organization, authority or head to smaller local centres

10 11 12 13 14 15

(1978) 17 ILM 1 (1982) 21 ILM 976 (1974) 53 ILR 297 (1981) 20 ILM 1 (1988) 27 ILM 1314 Yinka Omorogbe, Malthouse Law Books (simplified series), 2001, p. 178

It is the policy of delegating decision making authority down to lower levels in an organization, relatively away from and lower in a central authority. The more decentralized a system is, the more it relies on lateral relationships and the less it can rely on command or force. Decentralisation has been succinctly summarized by Rondinelli as transfer of technology for planning, management and resource raising and allocation from the central government to (a) field units of federal government ministries or agencies (b) subordinate units or levels of government (c) semi-autonomous public authorities or corporations (d) area-wide regional or functional authorities or (e) organization of the private and voluntary section16 A decentralized organization shows fewer ties in the organizational structure, wide span of control and a bottom to top flow of decision making and flow of ideas. If correct controls are in place, the bottom to top flow of information, will allow officials of the organization to be well informed of lower tie operations. For example, if an experienced technician at the lowest tier of an organization knows how to increase the efficiency of the production, the bottom to top flow of information will allow this knowledge to pass up to other higher officials. Various forms of decentralization have been identified. They include: Political decentralization: In such, citizens have more power in public decision

making than government. Here, the government simply implement decisions agreed to by the citizens

Administrative decentralization: it involves redistributing authority, responsibility

and financial resources for providing public services among different levels of governance. The transfer of responsibility for the planning, financing and management of public functions from the central government or regional government and its agencies, to local government, semi-autonomous public authorities or corporations. It could exist in forms like deconcentration, delegation, devolution, deregulation, privatization and partnership with Civil Society Organization (CSO) Economic decentralization

16

Reform & Decentralisation of agricultural services: an institutional perspective, FAO Corporate document Repository, Technical Cooperation department

Fiscal decentralization

An advantage of decentralization includes ensuring that the most important decisions are concentrated upon. More so, decision making is in form of empowerment. Empowerment in turn increases motivation, which translates into an increase in staff output. It also leads to increase in knowledge and skill. A major benefit is that it responds faster to new and emerging challenges. At the time of their independence, many developing countries wanted to consolidate their newly found political independence with economic influence. Substantial control over these economic forces that could subvert it, such as foreign investors, and foreign owned trading companies, was essential. Interventionism, an action by a government to influence and improve the country's economic situation or some aspect of it, was prevalent. Self-reliance and socialist approach (i.e nationalism) was incorporated in national policies. This resulted in the creation of large unchallenged public organization, often controlled by the politically appointed managers, only loosely accountable for their actions. Countries like Argentina, Ethiopia, India and Sri Lanka, began to adopt policies like privatization and deregulation, all forms of decentralization. Privatization and deregulation shifts responsibility for functions from the public to the private sector. It ranges from the free operation market to the public private partnership. Privatization is the conversion of businesses from government ownership to private property. This can involve the denationalization of industry as well as allowing the private sector to provide what had been considered government services. According to Adams et al (1992), Privatization includes the process involving: (1) outright or partial sale of asset by state (2) transfer of asset to public sector under leasing arrangement (3) introduction of management contracting arrangement According to Omoregbe17, these methods through which privatization is achieved extends to: (4) the public offering of shares

17

Yinka Omorogbe, Malthouse Law Books (simplified series), 2001, p. 185

(5) private sale of shares (6) new private investment in the state enterprise in question Deregulation, on the other hand, reduces the legal constraint on private participation in service provision or allows competition among private suppliers for services that in the time past had been provided by the government or by regulated monopolies. It is the dismantling of legal and governmental restrictions on the operation of certain businesses18 An instance is the deregulation of the telecommunications industry in Nigeria in 1999 under the President Olusegun Obasanjo administration allowing free entrance and competition by private investors in the telecommunication industry. The advantage of privatization and deregulation includes improved efficiency in service provisions, as well as increased transparency in the manner of conducting affairs on the part of the service providers. It also offers the benefit of higher accountability of the service provider to the service users. Research on property right and natural resources generally, in India and elsewhere, has shown that the degree of authority transferred varies according to the internal governance structures19 ARE NATIONALIZATION AND DECENTRALIZATION THE SAME Flowing from the above discussion, it is evident that nationalization involves the compulsory acquisition and taking over of the industry by the National government, and placing the controls of the industry in the hands of the government. On the other hand, in decentralization, decision making and control is left to subordinate units of lower levels. The Nationalization experience in Nigeria Although the Nigerian government had maintained involvement in the industry prior to 1971 mainly through concession to the foreign firms in operation, In May 1971, the Nigerian federal government then under the control of General Yakubu Gowon nationalized the oil industry by creating the Nigerian National Oil Corporation via a decree following the war with Biafra. The
18 19

Encarta dictionary Natural resources management in India: An institutional perspective

government thought it more necessary to gain more control over the oil industry. The nationalization of the oil industry in Nigeria was also precipitated by Nigerias desire to join OPEC. The nationalization policy restricted infusion into the Nigerian economy and along with it the passage of foreign capital, superior technology, and proven managerial skills20 This continued for several decades until during the years of Muritala Muhammed, when the oil boom led to endemic patronage and corruption among the political elite, and the nationalization policy had to be reviewed generally. This made the government to consider other workable structures like decentralisation in order to assist her achieve her aims. The Privatization experience in Nigerian Over time, privatization has emerged as a means of guaranteeing the governments desire for rapid and irreversible progress towards surmounting the problems that have beset public utilities over the last 2 decades in Nigeria. It became a stated policy in Nigeria in 1988, when Nigeria embarked on the PRIVATIZATION AND COMMERCIALIZATION PROGRAMME. The bureau of Public enterprises (B.P.E), which is the secretariat of the National council of privatization, was responsible for the administration of the privatization programme under the PUBLIC ENTERPRISES (PRIVATIZATION AND COMMERCIALIZATION) ACT. The privatization venture was divided into 3 phases. Phases 1 and 2 involved the privatization of commercial and merchant banks, quoted cement companies, and the downstream oil sector. Phase 3 involved the state owned enterprises21. However, under the Abubakar administration, a new law titled Public Enterprises (Privatization and Commercialization) Decree 1999 was enacted and backdated to December 1998. Under this law, several NNPC subsidiaries are slated for partial privatization. These include22: 1. Port Harcourt Refinery, 2. Kaduna refinery and petrochemicals, 3. Warri Refinery and Petrochemicals,
20

Adedolapo Akinrele, Privitisation and deregulation in Nigeria a paper delivered at the workshop organized for the occasion of the visit of the Canadian minister for international trade and his delegation, Lagos, 21st November 2002, 21 ibid 22 Yinka Omorogbe, Malthouse Law Books (simplified series), 2001, p. 189

4. Eleme Petrochemicals Company Ltd, 5. Pipelines product and Marketing Company Limited 6. Nigerian Petroleum Development Company Limited, 7. Nigerian Gas Company Limited. While in the downstream sector, three major marketing companies were to be fully privatized. These are, Unipetrol Plc., National Oil Chemical Company Limited, and African Petroleum Plc. According to the decree, partial privatization involves the government retaining a maximum of 40% shares in the company in question and with strategic investor participation being a maximum of 40% while the balance of 20% is to be held by Nigerian individuals. The percentage of the Nigerian individual may however be more if, for instance, where the government or the strategic investor does not take up its maximum allocated percentage.23 However, as good as the above provisions look, problems such as disrepair, neglect, and repeated vandalisation of the state owned petroleum pipelines, corruption, theft, sabotage; large rate cross border smuggling, amongst other still continues to trail the downstream oil sector24. Hence, government realized that it would be necessary to boost production level of the refineries but at a huge cost, and decided to invite local marketers to apply for licenses to build private refineries. This approach failed as the marketers who are solely driven by profit as maximization were not interested as government still control the pump price of oil and gas. Furthermore, as noted by Khan25, disruptions in the Nigerian downstream sector have deeper and more immediate domestic political implications for the country than those that may occur in the upstream sector This resulted in the Nigerian government seeking to adopt the deregulation of the oil and gas industry. According to Kupolokun26, the former group managing director of the NNPC, he noted that the set goals of deregulations are;

23 24

Yinka Omorogbe, Malthouse Law Books (simplified series), 2001, p. 189 Kombo Mason Baide (Ph.d), Modes of deregulation in the downstream sectors of the Nigerian petroleum industry 25 Ifiok Ibanga, Economics of privatizing and deregulating the Nigerian downstream oil sector 26 ibid

Dismantle national monopoly of state owned enterprises by privatizing and deregulating price control

Creating competition Reduce cost of subsidies Boost foreign direct investment in Nigeria Reduction in the transportation cost of product and people

Several opinions have been proffered as regards the suitability of deregulation in Nigeria. Some argue that deregulation cannot be complete but is desirable and that it should be implemented in phases to enable state owned monopolies regain efficiency before full privatization. Another view which is the view held by the Nigeria Labour Congress (NLC) is that the petroleum industry must not be liberalized or deregulated or privatized completely. Others hold the view that Nigeria should proceed with deregulation and in line with the new world order in international petroleum transactions27. Some of the notable impact of deregulating the petroleum industries include: the burden of the huge amount of money spent on subsidies would be reserved and savings generated for other purposes. According to the world bank28, potential savings in the downstream sector are defined as the difference between the actual cost of supply of petroleum product to consumers (either through import or by refining crude) and a bench mark cost corresponding to the procurement of these products from world markets under competitive conditions and are sub-divided into three categories which are procurement, refining and distribution. It also reduces the strain of financing Nigerias state owned petroleum businesses, reduces the rate of intra and Trans ECOWAS smuggling of Nigerian petroleum products, helps in stabilizing the relative prices of petroleum products, and breaking the monopoly of NNPC. The following can be considered as essential for a successful deregulation;

27

Kombo Mason Baide (Ph.d), Modes of deregulation in the downstream sectors of the Nigerian petroleum industry 28 World bank, Africa Technical department, industry and energy division, Note No. 14 of 1992, pg 3-5

There must be no unnecessary legal impediment and bureaucratic procedures that inhibit partition of private companies in the petroleum industries. Existing ones must be demolished and abolished by law

Open access for private investors to use state owned facilities such as jetties, storage tanks and pipeline operations.

The tariff must not be discriminatory The functions of policy formulation and regulation enforcement must be explicitly separated and assigned to different and independent agencies

The number of supply sources must be maximized

Creating minimal conditions for market competition takes time depending on the country, the size of its market and national economic and political priorities29. In order for government to stimulate competition, the government must still be able to influence price mechanism without actually fixing price ceilings. The non-existent of which, makes the exercise of privatization a futility. One of the approaches of the government in this regard was to propose a bill making it mandatory for major oil companies in the upstream sector to refine 50 percent of their oil the country. This way there will be many suppliers, in turn encouraging competition and the attendant lower cost30. However, there are some possible unintended outcomes which may come about as a result of a progressive switch to deregulation, which includes the fact that short term unemployment may rise due to price increase. Also, an abrupt removal of subsidy may cause dislocation to the price of gas because of high demand without requisite high supply. This according to the Nigerian Labour Congress (NLC) will impoverish Nigerians and would then lead to inflation. However, the NNPC argued that there will be 50% capture of consumer market, and the corporation will enter into partnership with willing independent marketers to create more mega stations which will eventually allow for adequate supply of petroleum product even in shortages31

29

Kombo Mason Baide (Ph.d), Modes of deregulation in the downstream sectors of the Nigerian petroleum industry 30 Ifiok Ibanga, Economics of privatizing and deregulating the Nigerian downstream oil sector 31 Nigeria: deregulation Federal Government, NLC meeting deadlocked, Thisday Newspaper, 11th November, 2009.

More so, the prevalence of corruption in Nigeria limits the application of deregulation in Nigeria, where the level of accountability of government and good policies has been minimal32. Other Benefits of deregulation include the fact that in the long run, there will be an increase in employment opportunities and availability of petroleum products. It also helps government shift its attention away from a mono economy to multi economy since the business of petroleum is not just for the federal government alone, or the federal government is not even involved at all. Also, other aspects of the nations economy would be positively affected since petroleum products and other allied products like fertilizer and gas, are readily available and highly competitive prices. It also aids security and societal involvement of the multinationals since they will be dealing directly with the communities. Hence, it can be safely concluded, as Agbakoba S.A.N has stated, that though deregulation would have initial cost effects, it however in the long run will yield enormous benefits for the Nigerian economy provided proper structures and policies are in place RECOMMENDATION Since the building of new refineries requires a huge amount of financing, one of the ways the government can go about financing the building of new refineries in the county is through BuildLease-Transfer Contracts. This type of financing arrangement typically involves a developer who designs and builds a complete facility, sells it to the government or a joint venture partner, while simultaneously leasing it back, usually the government or the partner. This allows the government to pay for the facility over a long period of time, while allowing the developer to not only recoup its building cost but earn additional income by running the facility over a period of time. Better still; money can be pumped into the existing state owned refineries already in existence as the money that is spent to import petroleum products run to about 3 billion per day, this sum of money if put into the existing refineries coupled with experienced officials will effect great and welcome change. In many countries around the world, onus falls on the state owned oil companies to balance the commercial objectives with the building, operating and maintaining of oil refineries

32

Obi O. Akwan, Nigeria the price of fuel at the pumps, why deregulation is the wrong way to go, MGV Editor, Dec 12, 2009

and there is absolutely no reason why Nigeria should be the exception. Privatization is not always the answer. CONCLUSION In a bid to liberalize the downstream environment which had been plagued by inefficiency and corruption, the government considered an ownership structure consisting of a single company with multiple equity owners post attractive. This structure will allow for the participation of the NNPC and other Nigerian and foreign interests thus removing the burden of funding from the Government33. Former OPEC President and Nigerias Minister of Petroleum argued that one of the advantages in changing the structure is the change from spending so much money on oil subsidy and refining abroad because of our inability to refine in Nigeria due to low refinery capacity utilization

33

nigeriafirst.org