Bureaucratic Politics and Implementation of Economic Liberalization Reforms in

Developing Countries: Insights from Privatization in the Nigeria’s Oil and Gas Sector

Abstract
This study investigates the phenomenon of bureaucratic politics as a factor that contributes to
slippages in the implementation of economic liberalization reform in developing countries.
Specifically, the study underscores that the bureaucratic politics model, which has largely been
acknowledged to inform government decisions, is more critical at the stage of policy
implementation in developing countries where many decided policies are either poorly, or not,
implemented. Citing examples from few developing countries’ privatisation of state monopolies,
the paper employs descriptive qualitative analysis to examine the processes of unbundling and
privatizing Nigerian National Petroleum Corporation (NNPC) to provide further empirical
grounds. The study contributes to the conceptualization of bureaucratic politics as a continuum
of bureaucratic compromise and bureaucratic confrontation at the respective ends, rather than the
traditional view of the model as a bargain and compromise.

Key words: policy implementation; economic liberalization; bureaucratic compromise,

bureaucratic confrontation; developing countries; Nigerian National Petroleum Corporation;

Introduction
Bureaucratic politics model is one perspective that scholars have employed to provide
explanation on how politics and self-serving interest (whether of executive political officials,
bureaucratic officials or agencies) impact on government policy. Unfortunately, this model has
largely been limited to discussions at policy formulation stage where the role of bureaucratic
agencies and officials is more of advising policy decisions. Research intensiveness on the
application of the model has equallybeen onmainly foreign policy and national security issues
and in developed polities especially the United States (e.g Allison, 1969; Rosati, 1981; O’Leary,
1994; Halperin, Clapp and Kanter, 2006; Preston and ‘t Hart, 1999) where the divergence
between policy formulation and its implementation is moderate.. The model focuses on the
internal politics of a government which explains policy decisions not “as choices nor as outputs”
but “as outcomes of various overlapping bargaining games among players arranged
hierarchically in the national government” (Allison (1969:690).
Though it has always been admitted that “considerable slippage can occur between the
formulation and the implementation of a decision” (Rosati, 1981:238), serious attention has not
be devoted to the study of the application of this model at the implementation level, and more
importantly, to implementation research in developing countries. Brynard (2005) observes that
despite the magnitude of policy failures in most developing countries,even the possibility that
implementation research and practice may have something to learn from, contribute to, bear
upon, or be relevant to implementation research and practice is scarcely ever raised, let alone be
debated. Few implementation research on these countries hinge explanation for policy or reform
failureonsome usually blamedsocial and administrative pitfalls that include poverty, economic
crisis, corruption, and political instability (Grindle, 1997; Olken and Pande, 2012); poorly
formulated policies (Imurana, Haruna and Kofi, 2014), weak state institutions including
problems of corruption, accountability, rule of law, unprofessionalism, etc. (Khan and
Gray,2006), nepotism, formalism, overlapping of administrative and traditional values and other
prismatic features highlighted by Riggs (1964) and his followers. These pitfalls are enormous
and thought to be endemic that the possibility of social change driven by the administrative
system is difficult, especially when considered from the perspective of Riggs’ prismatic theory
that has been criticized as an equilibrium theory (Peng, 2008; McCurdy, 2006).
Beyond these, scholars, (e.g. Okoli and Onah; 2002, Brown, 2009) have equally raised vital
questions as to why apparently promising policies and reforms often fail to deliver;why many
professionalized and well-trained public officers failed to perform; why existing machineries for
public accountability were weak despite series of institutional and capacity building;why
corruption persisted;why existing management practices and techniques did not work
satisfactorily;why elected leaders, administrators and service providers behave the way they do;
and why some civil servants misused their enormous administrative powers? These questions
demand varied investigations of motivations behind the actions of public officials which are self-
serving, political and often hard to discern.
Many scholars (e.g. Packenham, 1994; Fewsmith, 2007; Brown, 2009; Bowornwathana and
Poocharoen; Moshonas, 2014) have discussed the effect of politics in its various dimensions on
successful implementation of public policy and reforms in developing countries. Bowornwathana
and Poocharoen (2010) particularly examine how bureaucratic politics model can be used to
explain aspects of administrative reform processes. However, their study like many on
bureaucratic politics assumes a successful implementation of administrative reform and focuses
on how reform policies produces far-reaching political consequences to all parties concerned,
that is, how it reallocates the power balance among government agencies, in particular, among
politicians and bureaucrats and among bureaucrats themselves, and vice versa. Studies that
focus on how bureaucratic politics affects implementation of reform programmes and
decided/adopted policies in developing countries remain scanty. This study addresses this gap by
investigating the relevance of bureaucratic politics model in explaining activities at the policy
implementation stage in a developing country environment. The study objectives therefore are
to:
i. examine the nature of bureaucratic politics surrounding the implementation of economic
liberalization policy of privatization of Stated Owned Enterprises (SOEs) in developing
countries;
ii. investigate specifically how bureaucratic politics has influenced slippages in Nigeria’s
economic liberalization programmeof unbundling and privatising key government
parastatal in the oil and gas sector – the Nigerian National Petroleum Corporation
(NNPC) - since the introduction of SAP in 1986; and,
iii. contribute to the theoretical application of bureaucratic politics model to the explanation
of policy implementation slippages.
The paper draws from literature on bureaucratic politics to expand a conceptual framework for
applying this decision model at the policy implementation stage. Citing examples from a number
of developing country studies, the paper further examines the processes of unbundling and
privatizing the Nigerian National Petroleum Corporation (NNPC) to provide more empirical
grounds for the study. The author employs the method of descriptive analysis and interpretation
of documentary sources such as legislations, policy objectives, memoranda, speeches and actions
of relevant executive officials and agencies, resolutions and recommendations of various ad hoc
committees, panels and task forces, and media and academic reports of events.

Bureaucratic Politics and Policy Implementation

The concept of bureaucratic politics evolved from the age-long contention in public
administration commonly referred to as the politics-administration dichotomy. The contention
has been whether career bureaucrats indulge in policymaking or are just mere apolitical
executors of public policy. This contention is fairly settled in favour of the fact that career
administrators have significant inputs in policy either in their advisory capacity or in the process
of administrative policymaking (Appleby, 1949; March and Simeon, 1958;, Downs, 1967). The
concept of administrative policy making goes beyond the notion of policy advice to include
officially delegated power granted by the legislature itself to the executive to interpret, expand or
change policy within specified conditions. Some scholars (e.g. Sharma and Sadana, 2007;
Hollister, 2007) believe that this legislative power of administrators is minor because the process
is handled using the standard operating procedures to guarantee precision and rationality.
Hollister (2007:8) observes that “most states have enacted an elongated, transparent, and
painfully precise process for formulating rules and regulations that clarify the policy.” Observing
these processes of rule-making is to ensure a rational approach that reduces politics and ensures
precision.
Other scholars, however, believe that administrators are involved in high level politics
bordering on group or individual interest that leads to bargaining and compromise in policy
decisions. Building on the classical model of explaining executive/bureaucratic decisions – the
Rational Policy model - Allison (1969) developed the Organizational Process Model (Model II),
and the Governmental or Bureaucratic Policy Model (Model III), as alternative decision models.
He posits that “the leaders who sit on top of organizations are not a monolithic group. Rather,
each is, in his own right, a player in a central, competitive game. The name of the game is
bureaucratic politics: bargaining along regularized channels among players positioned
hierarchically within the government. Government behavior can thus be understood…not as
organizational outputs, but as outcomes of bargaining games”(Allison,1969:707). The sphere of
politics in the policy process deals with interests, values, conflict, and, compromises while that
of administration expectedly is competence, efficiency, neutrality in the execution of policy(‘t
Hart and Rosenthal, 1998).
Various scholars have tried operationalizing the model.Preston and ‘t Hart provide a
conceptual framework that more or less agree with those of other scholars such as Rosanti,
(1981), Peters, (1989),and , Kozak and Keagle, (1989). These features are:
i. There are multiple bureaucratic actors in the policymaking arena (structure).
ii. These actors have diverging and conflicting interests, and they are involved in multiple-n
game contexts with one another, requiring cooperation in areas of disagreement because
of the necessity for future policy interaction (structure).
iii. Power relationships between these actors are diffuse; for example, some institutional,
bureaucratic, or inner-circle actors are more powerful than other actors in certain policy
contexts, and not as powerful in others (structure).
 iv. Interaction is characterized by continuous “pulling and hauling" and bargaining between
(clusters of) actors (process).
v. Decisions are reached by bargaining, coalition formation, and compromise building
between different parties (process).
vi. Decision outcomes tend to be sensitive to temporal slippage (e.g., time gaps and delays
between decision-making and actual implementation) and content slippage (e.g., post-
decisional modification of the content of the policy) (process) (Preston and ‘t Hart,
1999:55).

Preston and ‘t Hart observe that there are contrasting analytical claims and practical
experiences which suggest that bureaucratic politics is a multifaceted and ambiguous
phenomenon. Basically, it could consist in a productive heterogeneity and competition, or,
escalate into jealous rivalry, bureaucratic guerrilla warfare, and costly policy stalemates.They
therefore developed a model postulating two-agenda empirical indicatorsof bureaucratic
politics that can manifest in a continuum of two extremes of low intensity and high intensity,
in which “each of these characteristics may occur to a greater or lesser degree, and their
relative importance may even vary at different points in time during a protracted decision-
making process” (‘Preston and ‘t Hart, 1999, 55). The two variables are fundamentally
bureaucratic consensus seeking and bureaucratic confrontation. They surmise that
bureaucratic consensus seeking can be viewed as a continuum ranging from a low intensity
extreme “with relatively few players whose views and interests diverge only gradually,
bargaining toward consensus within a closed policy arena featuring clear rules of the game
and a relatively transparent power structure” to the “opposite end of the spectrum [of]
bureaucratic confrontation, characterized by many players vigorously pushing their parochial
viewpoints in a relatively open and ill-structured constellation of forces” (Preston and ‘t Hart
(1999: 55-56).This is illustrated in the figure below

Figure 1: Degrees of bureaucratic politics: The empirical dimension.

Bureaucratic Consensus Seeking Bureaucratic confrontation
(Extreme manifestation: “groupthink”) Indicators (extreme manifestation: “warfare”)

Limited (1) Number of actors High

Aligned (2) Positioning of interests opposed
Closed arena (3) Contingent power structure open networks
Collegial (4) interaction by “pulling and competitive
Hauling”
Quick (5) compromise formation slow
Low (6) implementation slippage high

Source: Preston and ‘t Hart (1999:56) as adapted from Rosenthal et al. (1991)
This model is very useful to implementation study because it tried to explain slippage as a
variable of bureaucratic consensus seeking and confrontation. We shall return to this in a
moment.
Meanwhile, it is important to inquire how bureaucratic politics relates with policy
implementation. When a policy decision, is taken it is not a zero sum game for the policy
formulators. Policy making is a process that continues beyond the taking of major policy
decision. There is a continuous interaction between the setting of goals and actions geared
towards achieving them (Pressman and Wildavsky, 1973). Applying politics in explaining
divergence between policy decisions and its implementation has usually been done based on
multilateral interest of actors. The two dominant models for explaining the politics of
implementation have been the top-down principal-agent model that focus on the relationship
between policy formulators and bureaucrats(McCubbins, Noll and Weingast, 1987), and the
bottom-up street-level bureaucrat framework pioneered by Lipsky, (1980), which examines
policy divergence based on the irreducible discretionary power of street level bureaucrats (senior
versus middle/low level administrators). While both models can help to explain slippage in
policy implementation arsing from divergent interest of actors, they tend to heap so much
explanation on the challenge of control and supervision. The principal-agent model deserves
further comments as it explains divergence asa result of conflicting interest based on inter-
agency or individuals acting from distinctive agenciespositions. Antje Ellermann (2005)
observes that in the principal-agent model, it is crucial to note that slippage is based on two key
assumptions: (1) that bureaucrats, left to their own devices, will either shirk implementation
altogether or implement in ways that compromise the goals of the principal; (2) that principals
have constant preferences that consistently favor the implementation of legislative mandates.
These two assumptions cannot always be true. As he opined, “the relationship between principals
and agents, however, will look quite different wherever either or both of these assumptions do
not apply, i.e., where bureaucrats are self-motivated to carry out legal mandates or where
principals’ preferences change” (Ellermann, 2005:1224). In other words, bureaucrats may
genuinely wish to implement policy as decided while the preferences of the policy formulators
can change. Indeed the possibility of the political principals changing their preferences may even
depend ongenuine or self-serving advice of the bureaucratic agency based on the privileged
resources at its disposal – expertise, priviledge of implementation difficulties etc.
Implementation slippages, therefore, cannot be fully accounted for by monitoring/control
challenge, or between differences in the interest of the principal and the agent alone. It can arise
as a result of clashing interest of various agents or ‘changed’ preferences of the principal.
Bureaucratic politics is very much alive at the implementation stage. Preston and ‘t Hart
(1999:55) aver that when “a collective decision is made,… the bureau-political pulling and
hauling continues, now focused on the division of responsibility, money, and other conditions of
implementation, requiring further decisions and consuming more time…. The post-decisional
implementation bureaucratic politics substantially alters the de facto content of the government's
actions (e.g., bureaucratic politics producing gap between what the government says it will do
and what it actually does).” My contention is that it is not even the issue of struggle for resources
and implementation responsibility alone, but also unacceptance of policy as formulated by either
political officals or different implementation agency on account of the self-serving interests and
how it affects the autonomy of agencies and those involved.
Bureaucratic politics, therefore, could be more intriguing at the implementation level. It
could provide a leeway for implementation delays and failure and could also provide answers to
execution of programmes that are clearly counterproductive to the goals of initial policy. It can
lead to organizational links to political support to oppose policy and engage in calls for policy
review, amendment or reform; it could lead to shirking and/or sabotaging, compromises on
programmes that are disliked (Drezner, 2000; Brehm and Gates 1997); it could also lead to
agency slack and spoiling (Schindler, 2014). These of course may be done in accordance with
the ‘public interest’ justification because self-serving tendencies may be difficult to discern.
Now back to Preston and ‘t Hart’s (1999) framework, it is suspected that both
bureaucratic consensus seeking and confrontation at the implementation stage can produce
reasonable degree of policy slippage. Compromise at the implementation level is likely to be a
case of complicity not to implement the agreed or decided policy. It is therefore bound to
produce a slippage. Indeed, confrontation that arises as a result of a party insisting on
implementing policy as deicided could produce better results than a compromise made to satisfy
mutual interests that is not in line with the decided policy. It is therefore safe to argue that both
bureaucratic consensus-seeking and confrontation at the implementation stage has equal chances
of producing policy slippage. The figure below portrays this situation.

Policy outcomes resulting from

bureaucratic compromise to
maintain bureaucratic autonomy,
sphere of influence, critical tasks,
policy preferences etc.

Policy
Decision Policy
Output

Bu
rea
uc
rati
c co
nfr
o n ta
tio
n Policy outcomes resulting from
bureaucratic confrontation to
maintain bureaucratic autonomy,
sphere of influence, critical tasks,
policy preferences etc

Figure 2: Implementation slippage resulting from bureaucratic politics

The chances of a policy decision being implemented to produce the set goals (Policy
output) is dependent on bureaucratic politics (bureaucratic consensus or confrontation), which
results in divergence or slippage to produce policy outcomes that will mostly likely be in line
with the self-serving interests to satisfy bureaucratic autonomy. The broken line shows that
policy is never actually implemented to produce outputs, while the strong arrows portray the
likely direction implementation will go as a result of bureaucratic politics.
Discerning bureaucratic politics has to do with unravelling motivations (Ellison, 1995),
and the study of motivations is admittedly very difficult, and one may never know with certainty
what the “real” motivations were (Schindler, 2014).The phenomenon of bureaucratic autonomy
is employed to explain the motivation for engagement in bureaucratic politics at the
implementation level. The need for explaining this motivation is obvious: bureaucratic consensus
or confrontation could arise based on genuine constraints of implementing policy in accordance
with the set goals.In other words it may not be for the selfserving interests of those concerned.
Ellison (1995) uses the concept of agency autonomy to explain how agencies use resources to
satisfy self-serving motivations. For him, bureaucratic agencies employ resources at their
disposal which includes Rourke’ (1984) features of bureaucratic power - (a) ability to collect and
control information, and (b) professionals that dominate an agency,(c) political support from the
clients an agency serves or important legislative and executive constituencies to protect their
autonomy.In line with the desire to maintain its autonomy, an agency will seek to satisfy its
policy preferences, regardless of external demands (Mumme, and Moore, 1990). Ellison (1995)
suggests three features or motives that relate to bureaucratic autonomy.
i. Avoiding control by elected officials: This implies any action an agency takes to thwart
external attempts to change its political, legal, and fiscal autonomy.
ii. Resisting predation by other agencies: implies an unwillingness to share or give up
programmatic responsibilities with other units of government.
iii. Avoiding unwanted functions: implies an unwillingness to accept new tasks that may
detract or hinder the agency's ability to perform its critical tasks
Thus, the advanced framework for explaining policy slippage at implementation stage as result
of bureaucratic politics includes the fact that bureaucratic agencies and officials act to protect
their autonomy, sphere of influence, policy preference, critical tasks, avoid predation by other
agencies etc. Based on this framework advanced here we propose the following hypotheses for
this study:
1: Implementation of government policy or programme draws the concern and involvement of a
number of bureaucratic organizations and diverse individuals and groups both within and outside
the government;
2. the participants are not in agreement regarding methods and programmes;
3: The divergent goals of the interested parties result in conflict and opposition against the
implementation of a policy as formulated;

4. The slippage in implementation of decided policy is a product of bureaucratic consensus-

seeking or confrontation to protect critical tasks, sphere of influence or bureaucratic autonomy.

Some Third World Perspectives on Economic Liberalization Reform Implementation

The meaning attached to the concept of liberalism and its variants since the revolution
that started in the late 70s described as neoliberalism fairly admits a consensus. Williamson,
(1991; 2004) has suggested the phrase Washington Consensus. The years 1978-80 is considered
revolutionary turning-point for this new paradigm of liberalism. Harvey (2005:1) describes three
major activities and epicentres from which “revolutionary impulses seemingly spread and
reverberated to remake the world around us in a totally different image.” These include (a)
China’s Deng Xiaoping’s momentous steps towards the liberalization of the communist-ruled
economy of China that transformed the country from a closed back water to an open centre of
capitalist dynamism starting from 1978; (b) the reform in the United States Federal Reserve
started in 1978 by Paul Volcker which drastically changed the US monetary policy within a few
months. This reform was taken up by President Ronald Regan from 1980 and focused on various
programmes to roll back the state, revitalize the economy through a blend of policies to curb
labour power, deregulate industry, agriculture and resource extraction and to liberate the powers
of finance both internally and on the world stage; and, (c) in the United Kingdom, Margaret
Thatcher, who was elected Prime Minister in May 1979 began a tortuous task of curbing trade
union power and pursued other reforms to end inflationary stagnation and to empower capital.
Liberalization reform therefore comprises of variants of this neoliberal paradigm which has
implications for political, administrative and economic restructuring that implies more openness
and participation of other sectors in governance issues. Economically, this involves policies of
deregulation, privatization and withdrawal of the state from many areas of social provision [that]
has been all too common” (Harvey, 2005:2-3). Economic liberalization reform can be perceived
as a two-sided coin – the economic liberalization itself in form of free trade, deregulation,
commercialization or privatization of previously government-controlled entities, outsourcing of
service provisions to private organizations on one hand, and the consequential implication of
these on repositioning public institutions for the new roles deserving of government. This aspect
has to do with administrative reform or restructuring of public sector agencies to achieve the
above objectives.
In most developing countries, this two-pronged reform has dominated the policy stage
since 1980s. Van de Walle (1989:601) remarks that “just as the 1960s and 1970s were
characterized by the rapid expansion of the public sector in the developing world, the 1980s have
seen widespread attempts by policy makers to curtail the state’s economic role.” Similarly,
Farazmand (2002: ix) show that “unlike the reform movements of the earlier decades of the
twentieth century, which emphasized institution building, bureaucratization, nationalization, and
a wide variety of organizational and administrative capacity building for national and economic
development, the recent global phenomenon of administrative reform has been in the opposite
direction: reversing the traditional role of government, the state, and public administration
institutions into one that promotes a private, corporate-driven marketplace dominated by
business elites.” The popularity of the trend is portrayed by the fact that over 80 developing
countries are involved in these efforts, including many countries like China, Tanzania and
Algeria, which have traditionally favoured a prominent role for the state in the economy (Van de
Walle,1989).In most of these countries, the reforms began as Structural Adjustment Programme
prescriptions of the World Bank and International Monetary Fund in mid-1980s.
Despite the popularity of the reform trend, the tempo with which it began has not been
sustained. The level of state control is surprisingly high in many lucrative stated enterprises
irrespectiveof privatizations during the late 1990s and the first decade of the 2000s (World Bank
Group’s Oil, Gas, and Mining Unit, 2011).A number of reasons have actually contributed to this
situation. Part of the reasons include the fact that somecountries are realizing the fallacies of the
pure marketplace ideology and the private sector efficiency model in public administration
(Farazmand, 2002). In some cases, countries that indicate willingness to privatise have witnessed
strong oppositions that include the resistance of such targeted agencies or others to reform that
would affect their autonomy and sphere of influence.Scholars(e.g. Packenham, 1994; Bhaskar
and Khan, 1995; Fewsmith, 2007; Gupta, 2008; Bowornwathana and Poocharoen, 2010), have
hinted on the influence of politics in its various shades as a constraining factor to
reform.Packenham (1994) for instance, believes that political explanations are more sustainable
than economic, cultural, or sociological in explaining the issue of why the pace of change toward
economic liberalization has been more rapid so far in some Latin American countries and not in
others. China’s experience is also noteworthy. Fewsmith’s (2007) reveals that even though
economic reforms have been successful in China, “yet at each and every step along this path,
reform has met with significant opposition – political, economic, and cultural. This opposition
has been based in part on interests that have been threatened by reform, but also in significant
part by the belief that marketization and globalization present real threats to the continued rule of
the Chinese Communist Party (CCP).”
Murphy (2000) posits that Mexico has suffered setbacks in privatizing her two state
owned parastatals in both the oil and electricity sectors initiated by the Zedillo administration
since 1995. The petroleum law was amended to allow concessions for private enterprise to
transport, store, and distribute natural gas, and to build, operate, and own related pipelines and
installations. But the implementation of this law failed as a result of the attempt to sell interests
in secondary petrochemical plants to private investors. In 1999 for instance, there was “a chaos
of labor demonstrations, Congressional recriminations, restructurings, and re-offerings that left
on the auction block nothing private enterprise wanted to buy” (Murphy, 2000:78). Similar
implementation challenge was experienced in the energy sector, where attempt to grant private
concessions for monopoly responsibilities of the state-owned Comisión Federal de Electricidad
(CFE) to serve less affluent consumers, which Article 27 of the Constitution calls “public
service.”
met a brick wall. President Zedillo’s attempt to grant private concessions for the “public service”
in 1999 by seeking to secure the amendment of this section of the Constitution from the Mexican
Congress, is now dormant. Murphy (2000) posits that behind the oppositions against these
reforms are the state monopolies themselves.
Brazil’s Petrobras also presents a model case of the how politics and clash of interest
could hamper or reverse implementation of liberalisation policy. Established in 1953 as one of
the oldest state monopoly in the oil and gas sector, Petrobras faced privatization in the 1990s
under the administration of President Cardoso. Since 1997, Petrobras has operated in a
competitive environment; the government scrapped its monopoly on oil-related activities, freed
oil prices from state control, and opened the sector to competition. It completed the process in
January 2002 by abolishing price controls and removing Petrobras’s monopoly on importing oil
products (Goldstein, 2010). While Cardosso’s commitment, shrewdness and tactics have been
acclaimed and Petrobras described as the few third world national oil companies (NOCs) that
have actually completed the implementation of its privatisation policy (IMF, 2013; Godstein,
2010),, “Petrobras has still managed to preserve a de facto monopoly in refining and
distribution”(IMF, 2013:8).The company still fights for lost grounds.The government in 2010
engaged in what has been described as reverse privatisation by increasing its equity from 39% to
55% (Goldstein, 2010).

Briefs on NNPC and the Privatisation and Commercialisation Policy

Nigeria’s efforts to unbundle and privatize the Nigerian National Petroleum Corporation
(NNPC) have apparently faced similar challenges as most of the above examples. Oil was
discovered in Nigeria at the beginning of the 20 th Century but commercial extraction began in
1956. Since then, oil has come to play the most central role in the economic and political life of
the country. Over 80% of the world's proven oil reserves are concentrated in just 10 countries,
and Nigeria happens to be among these (Hydrocarbons-Technology.com, 2013). Crude oil and
natural gas reserves are currently estimated at 35 billion barrels and 185 trillion cubic feet,
respectively, reserves that are more than adequate to fuel much of Sub-Saharan Africa energy
demand for several decades (Iwayemi, 2008). The oil and gas sector currently accounts for
around 25 percent of GDP, 75 percent of general government fiscal revenues, and over 95
percent of total exports (IMF, 2013).The contribution of oil export to the country’s revenue has
steadily risen from 7.1 percent in 1961, 13.5 percent in 1965, 63.9 percent in 1970 and peaked at
95 percent in 1979 (Edame, Effiong and Efefiom 2013), before the oil crisis of late 70s and early
80s that set the pace for the Structural Adjustment Programme (SAP) in 1986.
Prior to the introduction of SAP, Nigeria operated a mix-economy system in which the
public sector drives the economy with a vast state owned enterprises permeating such economic
activities as banking and insurance, oil prospecting, exploration, refining and marketing, cement,
paper and steel mills, hotels and tourism; sugar estates, etc. These enterprises operated at a very
high level of inefficiency with returns on investment that did not exceed 2 per cent per annum,
which is less than 25 per cent of the annual subventions from the government to the public
enterprise sector (Zayyad, nd).The Nigeria National Petroleum Corporation (NNPC), the state-
owned oil monopoly is among these parastatals.
The history of NNPC started with the establishment of the Nigerian National Oil
Corporation (NNOC) in 1971 to participate in exploration, production, refining, marketing,
transportation, distribution and regulation of the oil industry. The Corporation was later merged
in 1977 with the Ministry of Petroleum Resources to form the Nigerian National Petroleum
Corporation, NNPC. The MPR itself was established in 1975 by upgrading of the Department of
Petroleum Resources (DPR), the petroleum industry regulatory arm of the Ministry of Mines and
Power. The newly established NNPC combined the commercial functions of the former NNOC
with the regulatory and policy development functions of the former Ministry of Petroleum
Resources and was thereby vested with exclusive responsibility for upstream and downstream
development as well as regulating and supervising the oil industry on behalf of the Nigerian
government (Centre for Energy Economics, nd). The enterprise has remained the driving force
behind the country’s economy, providing fuel and feedstock for the nation's industrial facilities
and struggling to meet the energy needs of individual customers and commercial enterprises
(Pederson and Grant, 1988).
With the introduction of SAP and its economic liberalization programme in 1986, the
military government adopted the privatisation and commercialisation policy with the
proclamation of Privatization and CommercializationDecree 25 of 1988. This decree established
the Technical Committee on Privatisation and Commercialisation (TCPC) that carried out the
privatisation and commercialisation programme till 1993 when the decree was repealed and
amended by theBureau of Public Enterprises Decree No. 78, 1993. The latter was eventually
updated and promulgated as the Public Enterprises (Privatisation and Commercialisation) Act of
1999 for the transition of the country to democratic rule in 1999. The major objectives of the
privatisation and commercialisation decrees and the Public Enterprises 1999 Act are to:(1)
privatize or commercialise public enterprises based on classifications included as schedules(2)
minimise government interference in both privatized and commercialised enterprises; (2) ensure
the integration of market and commercial orientation, and, financial self-sufficiency for those
enterprises that would be commercialized; and, (3) ensure operational and management
autonomy for the entities. The law also includes reorganization of public agencies, which entails
the programme of unbundling complex government enterprises into specific autonomous
operational areas to ensure effective privatisation and commercialisation as the case may be.
Two important agencies are created by the 1999 Act to pursue the implementation of these and
other objectives. These are the National Council on Privatisation (NCP) with the following
powers, to: make policies on privatization and commercialization; determine the modalities for
privatization and advising the government accordingly;determine the timing of privatization for
particular enterprises; approve the prices for shares and the appointment of privatization
advisers; ensure that commercialized public enterprises are managed in accordance with sound
commercial principles and prudent financial practices; and interface between the public
enterprises and the supervising ministries in order to ensure effective monitoring and
safeguarding of the managerial autonomy of the public enterprises (Public
Enterprises(Privatisation and Commercialisation Act 1999, section 11). There is also the Bureau
of Public Enterprises, which is the implementing arm of the NCP. It has the following as key
responsibilities: implement the council’s policies on privatization and commercialization;
prepare public enterprises approved by the council for privatization and commercialization;
advise the council on capital restructuring needs of enterprises to be privatized; ensure financial
discipline and accountability of commercialized enterprises; make recommendations to the
council in the appointment of consultants, advisers, investment bankers, issuing houses,
stockbrokers, solicitors, trustees, accountants, and other professionals required for the purpose of
either privatization or commercialization; and ensure the success of privatization and
commercialization implementation through monitoring and evaluation (Part III, Section 13 of
1999 Public Enterprises (PE) Act). Legal Dynamics of Privatisation in Nigeria (nd) observes
some notable differences in the first decree on privatisation and subsequent amendments
especially the 1999 Act. One critical example is that the 1988 decree in a usual military fashion
gave absolute powers to the President in the privatisation and commercialisation law: “the
President could add, remove or alter the list of State owned enterprises to be privatized.
Instructively, the Committee required the prior approval of theFederal Government before shares
could be sold” while the Act places more powers on the NCP, “a body under the chairmanship of
the Vice President of Nigeria whose membership includes the Ministers of Finance and Industry,
the Attorney General of the Federation, the Secretary to the Government of the Federation, the
Governor of Central Bank of Nigeria, etc. This body approves prices of shares for sale; the mode
of selling the shares, (that is; whether by public or private issue, or otherwise) as well as the time
of sale. Its function also includes approving the legal and statutory framework for State owned
enterprises to beprivatized” (Legal Dynamics of Privatisation in Nigeria, nd:3). So the Act
apparently has reduced the sphere of influence of the presidency in the privatisation policy.
From the beginning, NNPC was among the enterprises slated for full commercialisation
in the law. But it also required restructuring, being a very complex organisation. This impliesthat
it would first be dismantled and reorganised into separate autonomous entities that would focus
on specific aspects of the oil and gas business. Hence, the Public Enterprises 1999 Act
recognised some of the subsidiaries of NNPC created in the first unbundling exercise of 1988 for
partial privatization (i.e. Federal Government retains 40% of equity; Strategic Investor 40% and
Nigerian citizens and individuals 20%) (Part 1 of First Schedule, Section 6,2 1999Act). The
subsidiaries earmarked for privatisation include Port-Harcourt Refineries (2), Kaduna Refinery
and Petro-Chemicals, Warri Refinery and Petro-Chemicals, Eleme Petrochemicals Company
Ltd., Pipelines Product and Marketing Company Ltd., Nigerian Petroleum Development
Company.Various tinkering of the Act have been effected by the National Council on
Privatisation through the issuance of statutory orders and guidelines that reclassified enterprises
in accordance with the wishes of the government of the day. For instance, in 2004, the
NCPaltered the mode of privatisation shown above in exercise of the powers granted to it by
sections 1(3) and 6(3) of the 1999 Act. In the new arrangement, NNPC is still listed for full
commercialization (see Pat 1, Schedule 2). The subsidiaries are also retained for partial
privatisation but with a separate mix as shown below.
Table 1: Enterprises in which Equity held shall be partially privatised
Petroleum/Oil and Gas Sector
Enterprise Maximum Maximum Nigeria Initial
Strategic investor percentage individuals’ share
participation as a equity participation as disposed
percentage after reserved for percentage post off
privatization staff of PE’s privatisation
after
privatisation
1. Nigeria Petroleum Development 51% 4.9% 44.1% Nil
Company
2. West African Refinery company 40% Nil Nil Nil
limited
4. Port Harcourt Refinery 51% 4.9 44.1 Nil
5 Kaduna Refinery and 51% 4.9% 44.1 Nil
Petrochemicals
6. Eleme Petrochemicals Company 51% 4.1% 44.1% Nil
 Ltd
7 Pipelines and Products Marketing 100% Nil Nil Nil
Company Ltd
8 Stallion Properties and 51% 49%
development Company Ltd
(SPDC)
Culled from Public Enterprises (Privatisation and Commcercialisation as amended) Act 1999
First Schedule, section 1(1), Part 1.

The context of partial privatisation has now been made more confusing. It is notclear if
the federal government is now claiming the position of the strategic investor or whether this
would be secured under concessioning.
Relatively, the privatisation and commercialisation programme has been adjudged
successful in Nigeria on its face value. Zayyad, who was the first chairman of the Technical
Committee on Privatisation and Commercialisation posits that
In the three years since the implementation of the privatisation programme began, the
Technical Committee on Privatisation (TCPC) has been able to complete privatisation
work on 62 out of the 73 enterprises slated for full privatisation, and 22 out of the 25
enterprises slated for partial privatisation. On the commercialisation aspect of the
programme, the number of public enterprises with whom Performance Agreements have
been entered into stood at 22, as of mid-1992. So far, the exercise has generated (for the
Government) over N1,6 billion as privatisation revenue, created over 600,000 new
shareholders in the country, bridging both income and geo-political divides, radically
changed the structure and depth of the Nigerian Capital Market and created awareness of
the virtue of share ownership as a form of savings. The programme has relieved the
Federal Government of what was the huge and growing burden of financing debts and
deficits of public enterprises. It has improved the allocative efficiency of the national
economy, and enhanced the volume of corporate taxes accruing to the national treasury
(Zayyad, nd:13).

Zayyad also admitted some serious challenges. He avers that “there are some people who are
opposed to privatisation, just as they are opposed to the whole Structural Adjustment
Programme” (Zayyad, nd:14). Significant part of this opposition is believed to come from
entrenched bureaucratic interests in relation to the control and struggle for sphere of influence
among bureaucratic agencies and political executives.

Bureaucratic Politics and the Unbundling andPrivatization of NNPC

NNPC was among the first parastatal to witness the unbundling exercise after the
pronouncement of Privatisation and Commercialisation Decree 25 of 1988 by the Ibrahim
Badamasi Babangida (IBB) Military Government in 1988. Announcing the unbundling of the
parastatal on Monday March 21 1988, IBB declared that the NNPC was going to be reorganised
and put on a more solid footing to operate as a commercial organization rather than as a
parastatal of government (NNPC, 1992). Following this, the parastatal was unbundled into 12
strategic business units covering the entire spectrum of the oil industry operations (NNPC,
1992). The subsidiaries were: National Petroleum Investment Management Services (NAPIMS),
the Nigerian Petroleum Development Company (NPDC), the Nigerian Gas Company (NGC), the
Products and Pipelines Marketing Company (PPMC), Integrated Data Services Limited (IDSL),
Nigerian Liquefied Natural Gas Limited (NLNG), the National Engineering and Technical
Company Limited (NETCO), Hydrocarbon Services Nigeria Limited (HYSON), Warri Refinery
and Petrochemical Co. Limited (WRPC), Kaduna Refinery and Petrochemical Co. Limited
(KRPC), Port Harcourt Refining Co. Limited (PHRC), NNPC Retail and Duke Oil (NNPC,
2012). One would have expected that in line with the objectives of the privatisation and
commercializationlaw, this exercise would have led to the existence of separate autonomous
entities and the reduction of government control in addition to their operating in a full market
and commercial procedure. But the unbundling did not ensure any of these. What was perhaps
realised by the exercise was the conversion of the parastatal into a ‘Group’ comprising of the
NNPC Board, the Group Managing Director's office, eight directorates (Exploration &
Production, Refineries & Petrochemical, Finance & Accounts and Corporate Services,
Commercial & Investment, Engineering & Technology, Gas & Power and Special Duties) and
12 subsidiaries firmly controlled by the directorates and the Head Office. The goal set out to
achieve by this reorganization and unbundling was not clear as the relationship between NNPC,
its subsidiaries and the Ministry of Petroleum Resources and Presidencybecame more
complicated.
It may be necessary at this juncture to disclose that the government of IBB that carried
out the unbundling of NNPC in 1988 re-established the Ministry of Petroleum Resources, which
was merged with NNOC to form the NNPC, in 1985. The major reason for merging the two then
was to address the problem of confrontation and conflict that often existed between the Ministry
and the national oil company NNOC.As posited by Ugo Nwokeji (2007: 14-15),
In theory, the creation of NNOC as a separate entity from DPR was a logical
arrangement, with a clear separationbetween the regulator and the National Oil Company.
The subordination within the civil service structure of both institutions to the Ministry of
 Mines and Power, however, undermined this prospect. The ministry’s powerful
permanent secretary, Philip Asiodu, who had no background in oil or energy, was
designated chairman of NNOC, from which position he lorded it over, routinely
overruling the professionals in the NNOC and DPR. He ostensibly reported often to the
last detail to the minister of Mines and Power, who himself reported in detail to the
military ruler Yakubu Gowon (1966-1975), who ultimately set Nigeria’s crude prices, but
in actual fact Asiodu ran the oil industry single-handedly.

Thus the creation of Ministry of PetroleumResources by upgrading the oil sector regulatory
division of the Ministry of Mines and Power (DPR) in 1975 and the eventual merger of the
carved out Ministry of Petroleum Resources and NNOC to form the NNPCin 1977 was rather a
move to deal with the conflict between the supervising ministry and the national oil company
NNOC. This move also had its own disadvantages since it saw the newly established NNPC
combining the functions of the ministry (policy and coordination), the DPR (regulator) and the
responsibilities of oil exploration, extraction, and distribution etc. of NNOC. The re-
establishment of the MPR in 1985 was therefore a move to collect this error but surely re-
enactedministerial control and the consequent struggle between thenational oil company and the
supervising ministry
The unbundling of NNPC in 1988 was driven by Rilwanu Lukman as the Minister for
MPR, who despite the previous recommendation of the Report of the Panel on Nigerian Crude
Oil Production and Marketing Policies (1976) that NNOC should be re-organised and that
representatives of the Ministry should be excluded from the board, returned himself as the
Chairman of NNPC Board.Rilwanu Lukman’s foray into the murky Nigeria’s public oil and
energy arenas is described as legendary(Nuhu-Koko, 2009). He was the in charge of the Ministry
of Mines, Power and Steel Development (1984-85) from where he was moved to be the MPR
when it was reestablished in 1985.As Nigeria’s Petroleum Minister in this period, he
concurrently served as President of the Organisation for the Petroleum Exporting Countries
(OPEC) Conference for several consecutive terms from 1985-1989. He was to become the
Secretary General of OPEC from 1995–2000 from where President Olusegun Obasanjo
appointed him as Presidential Adviser on Petroleum and Energy Matters(Sweet Crude Reports,
nd). He resigned from Obasanjo’s government and retired from public life in 2003, but once
again accepted to serve as the Honorary Presidential Adviser on Petroleum, Energy and Strategic
Matters to President Yar’Adua in 2007. In December 2008, Yar’Adua appointed him as the
substantive Minister of Petroleum Resources (MPR). He resigned from this position after the
death of Yar’Adua in 2010. Rilwanu Lukman held other several positions in both national and
international energy industries that have endeared him to various presidents as one to drive
reform in Nigeria’s oil and gas sector. But the description of his re-appointment as the Minister
for MPR by Yar’Adua in 2008 as “one particular event that attracted much concern and
unnecessary uproar from certain quarters” (Nuhu-Koko, 2009) reveals the extent of opposition
that his intentions and actions, which from all intents and purposes, borders on dismantling of
NNPC has received over the years. His idea of unbundling the parastatal also has not shown
strong consistency with the objectives of privatisation and commercialisation in terms of
ensuring autonomy and reducing governmental control for the national oil company. Nuhu_Koko
(2009) avers that Rilwanu has indicated that he does not belong to the Washington Consensus
reformers’ club. He is apparently opposed to full and ‘gangster-type’ of privatization of the
nation’s refineries and other public assets in the downstream petroleum sector (Nuhu-Koko,
2009).
In the 1988 unbundling exercise, Rilwanu had defined three areas of responsibility for the
NNPC—corporate services, operations, and petroleum investment management services, and got
the agenciesdivided into the subsidiary companies already mentioned above.Theregulatory and
policy coordination responsibilities in the oil and gas sector were returned to the MPR.The
Ministry was clearly in charge and NNPC was subjugated as a parastatal that should be
controlled by it. The climax of this subjugation was the suspension of Managing Directors of
NNPC, Aret Adams and his counterpart at the Liquefied Natural Gas (LNG) Company, a
subsidiary of NNPC late in 1989 for refusing to accept government appointees to the LNG
Company (Field and Stansell, nd).The objectives pursued in the NNPC restructuring exerciseof
1988 was actually not to create autonomous entities, but to weaken the parastatal and be able to
control it and its subsidiaries by the Ministry. The Minister of MPR not only reclaimed the
chairmanship of the board of NNPC but also the power of making critical appointments for
NNPC subsidiaries.
The succeeding interim governmentof Ernest Shonekan of 1993 consolidated the
ministerial control already reestablished and so was the military government of General Sani
Abacha(1993 to 1998). Abachahad more serious crises to contend with as a result of his
dictatorial approach. the hanging of Ken Saro Wiwa and other 8 Ogoni Environmentalists who
led serious interruption in oil extraction activities in the Niger Delta Region as a result of oil
spillage and other environmental concernsexposed Nigeria to sanctions from the international
community and actually put on hold most of the on-going privatization and reorganization
programmes.It was therefore an opportunity for Dan Etete, the Minister of MPR (1995-1998) to
fully re-assert the authority of the ministry over the NNPC and virtually put government
interference back to what it was in the days of NNPC precursor (Nwokeji, 2007). This
wasvirtually the situation when Obasanjo assumed office as the elected democratic president in
1999.
The economic liberalization policy received a renewed boost under this administration.
He emphasized private sector driven economy. Under this administration (1999-2007), a total of
122 state owned enterprises were privatized (see Public Enterprises Act, Second Schedule). But
NNPC was closely kept at the behest of the Presidency.President Obasanjo refused to appoint a
Minister for MPR for the eight years he stayed in office. It is important to remark that it was his
military government that carried out the merger of NNOC and the Ministry in 1977. The actual
intention of Obasanjo as president between 1999 and 2007 concerning the MPR was not clear,
but his lack of interestto appoint a Minister invariably showed his disposition to bring the
parastatal closer to the control of the Presidency. This move was seen to appeal to the leadership
of NNPC as it not only provided them opportunity to be off the hook of ministerial control but
also afforded them the opportunity to diffuse the plan of dismantling the entity and privatising its
subsidiaries.
Reform in the oil and gas sector was pursued through various presidential task forces and
ad hoc study committees, while the National Council on Privatisation and Bureau of Public
Enterprises that ought to lead the implementation on unbundling and privatisation were ignored.
Obasanjo appointed several committees to provide solutions to the various ills of Nigeria.
Among these and relevant to the issues of unbundling and privatization were the 34 member
Special Committee on the Review of Petroleum Products Supply and Distribution (SCRPPSD),
the Oil and Gas Sector Reform Implementation Committee (OGIC) (2000), and the Ahmed Joda
Panel on the Review, Harmonisation and Rationalisation of Federal Government Parastatals,
Institutions and Agencies (2000). The OGIC was chaired by Rilwanu Lukman, now the
Presidential Adviser on Petroleum and Energy Matters. The OGIC came up with the much touted
National Oil and Gas Policy (NOGP) the key thrust of which is anchored on the need to separate
the commercial institutions in the oil and gas sector in Nigeria from the regulatory and policy-
making institutions. The influence of Lukman in the key recommendations of OGIC cannot be
doubted judging from his pedigree and precedents concerning what should be the exact mandate
of a National Oil Company. However, less attention was paid by Obasanjo to this committee’s
recommendations.
On the other hand, Obasanjo paid more attention to thereport of the 34-man SCRPPSD.
His interest in the report of this committee more than any other that relates to reform in the oil
sector was portrayed by the dispatch with which his administration handled the affairs of the
committee.Thus, a committee he set up in August 2000, submitted its report to government by
October, the government released a white paper on the report in January 2001, and the Federal
Ministry of Information flagged off Public enlightenment campaign on the SRCPPSD Report
especially on issues of deregulation and subsidy removal on petroleum products. By, March
2001, the government forwarded the Bill for an Act to establish Petroleum Products Pricing
Regulatory Agency (PPPRA) to the National Assembly, and in the interim inaugurated the
Petroleum Products Pricing Regulatory Committee (PPPRC) in March 28, 2001 to start with the
implementation of aspects of the deregulation policy. The bill was finally passed by the National
Assembly in 2003, establishing the Petroleum Product Pricing and Regulatory Act (see PPPRA
Official website, 2014). Implementation of the SCRPPSD report was selective. Other important
recommendations like restructuring of the NNPC and its subsidiaries,privatisation of all four
government refineries and encouragement for the establishment of private refineries to ensure
competition, establishment of a pipeline management authority for the management of pipelines
and depots were overlooked. The management of these entities were still under the control of the
NNPC. Supplying crude to the refineries and Turn around Maintenance (TAM) of the Refineries
remain a major outlet for contract and patronage.
The plausible explanation for Obasanjo government’s interest in the implementation of
the SCRPPSD report was the issue of deregulation and subsidy removal.These was a programme
that would bring quick returns to the government by freeing subsidy money. Evidently, NNPC
was very closely connected to this line of reform. Its relationship with the Presidency at this
period has been described as a parasitic marriage of convenience. Izeze, (nd) remarks that any
performance rating or assessment of the NNPC under Obasanjo would be incomplete and bias, if
it does not take due consideration of the negative effects of undue government or rather
presidency’s interference on the activities of the corporation. Obasanjo’s refusal to appoint a
Minister of Petroleum Resources is seen by Nwokeji (2007:21) as a patronage resource and a
“tendency of empowering NNPC at the expense of the ministry” (Nwokeji, 2007:21).The newly
established Petroleum Products Pricing Regulatory Agency (PPPRA) favoured the autonomy and
continuing existence of the parastatal as it isbecause (i) it was thought to remove the regulatory
function from the Ministry of Petroleum Resources and (2) NNPC retains its central role in the
downstream sector, despite inclusion of other product importers. The PPPRA (Establishment)
Act 2003 in Section 7 provides the functions of the agency to include: (a) determine the pricing
policy of petroleum products; (b) regulate the supply and distribution of petroleum products: (c)
establish an information and data bank through liaison with all relevant agencies to facilitate the
making of informed and realistic decisions on pricing policies (d) moderate the volatility in
petroleum products prices, while ensuring reasonable returns to operators (f) establish parameters
and codes of conduct for all operators in the downstream petroleum sector; (k) exercise
mediatory role as necessary for all stakeholders in the sector etc. The law at least did not repeal
the NNPC establishing Act of 1977 nor affect any of its mandates. NNPCcontinues to dominate
the distribution of various petroleum products through its refineries and importation. It
contributed 60% to 96% value of various productsimported for the period 2006 to 2008 (PPPRA,
2008). It remained central in paying subsidies or cost of importation of products when approved
by the PPPRA. The House of Representative Ad hoc Committee Report “To Verify and
Determine the Actual Subsidy Requirements and Monitor the Implementation of the Subsidy
Regime in Nigeria‟ popularly known as Lawan Farouk Committee,which investigated the
subsidy regime for the period 2009-2011 indicted NNPC on many fronts in relation to the issue
of subsidy, which supposed to have been resolved with the establishment of PPPRA.. Some
highlights of the report include that:
 Contrary to statutory requirements and other guidelines under the Petroleum Support
Fund (PSF) Scheme mandating agencies in the industry to keep reliable information data
base, there seemed to be a deliberate understanding among the agencies not to do so. This
lack of record keeping contributed in no small measure to the decadence and rots the
Committee found in the administration of the PSF.
 the subsidy regime, as operated between the period under review (2009 and 2011), were
fraught with endemic corruption and entrenched inefficiency. Much of the amount
 claimed to have been paid as subsidy was actually not for consumed PMS. Government
officials made nonsense of the PSF Guidelines due mainly to sleaze.
 contrary to the earlier official figure of subsidy payment of N1.3 Trillion, the
Accountant-General of the Federation put forward a figure of N1.6 Trillion, the CBN
N1.7 Trillion, while the Committee established subsidy payment of N2,587.087 Trillion
as at 31st December, 2011, amounting to more than 900% over the appropriated sum of
N245 Billion. This figure of N2, 587.087Trillion is based on the CBN figure of
N844.944b paid to NNPC, in addition to another figure of N847.942b reflected as
withdrawals by NNPC from the excess crude naira account, as well as the sum of
N894.201b paid as subsidy to the Marketers. The figure of N847.942b quoted above
strongly suggests that NNPC might have been withdrawing from two sources especially
when the double withdrawals were also reflected both in 2009 and in 2010.
 there were outstanding claims by NNPC and the Marketers in excess of N270billion as
subsidy payments for 2011.
 NNPC was found not to be accountable to anybody or authority. The Corporation, in
2011, processed payment of N310.4 Billion as 2009 – 2011 arrears of subsidy on
Kerosene, contrary to a Presidential Directive which removed subsidy on Kerosene in
2009. The Corporation also processed for itself, direct deduction of subsidy payment
from amounts it received from other operations such as joint venture before paying the
balance to the Federation Account
 Worse still, the direct deduction in 2011 alone, which amounted to N847.942 Billion, was
effected without any provision in the Appropriation Act.
 While NNPC feasted on the Federation Account to bloat the subsidy payable, some of the
marketers were involved in claiming subsidy on products not supplied. PPPRA laid this
foundation by allocating volumes of products each quarter to the marketers which it knew
were not in conformity with its own guidelines for participation.
 Our investigation further revealed that certain marketers collected subsidy of over
N230.184 Billion on PMS volume of 3,262,960,225 litres that from the records made
available to us were not supplied. Apart from proliferation and non-designation of bank
accounts for subsidy payment(Premium Times, 2014)
The above reference only shows that the creation of PPPRA did not affect the autonomy of
NNPC, nor made any genuine effort to inculcate a competitive market through the so-called
deregulation policy. It merely addressed the interest of President Obasanjo increase of product
pricing that was core to his administration’s programme in the sector.The issue of restructuring
of NNPC and privatizing the sector was apparently not at his pleasure.
It is however, necessary to underscore at this point that NNPC leadership and workers
have not been neutral in these developments. The absence of Minster for MPR during
Obasanjo’s rule provided NNPC leadership direct access to the President, and the infiltration of
its leaders and workers into themembership of relevant Obasanjo committees especially the
Special Committee on the Review of Petroleum Products Supply and Distribution (SCRPPSD).
With increasing threat of unbundling and privatization in the new democratic era, NNPC
leadership used two major strategies to stall privatisation of the enterprise. The first was series of
new business opportunities developed within the period and the decision to lay off a large
number of staff of the enterprise that increased the spate of unrest in the sector in addition to the
existing Niger Delta militancy and general unrest in the polity as a result of Obasanjo’s
deregulation policy. NNPC made several key innovative partnerships, which included working
with Chevron, Texaco and British gas to develop a Liquefied National Gas Project in the border
town of Olokola. In December 2004, NNPC management set plans in motion to launch the
ambitious West African Gas Pipeline, which would supply gas from Nigeria to West Africa
including Ghana, Benin, and Togo (Field and Stansell, nd). In February 2005, it signed a $1
billion contract with Chevron Texaco Nigeria to construct the Floating, Production, Storage, and
Offloading Vessel (FPSO) for the Agbami deep offshore oil field. The FPSO was expected to
process 250,000 barrels per day of crude oil and 450 million standard cubic feet of gas per day. It
was expected that the project would gross $57.4 billion in its lifetime. Commenting on the
impact of these projects to the survival of NNPC, Field and Stansell (nd) remark that Kupolokun
the Managing Director of NNPC from 2003 faced a tough road ahead, but there were no doubts
that NNPC would remain a fixture in Nigeria's oil and gas sector for years to come. Obasanjo
couldn’t have been more fascinated with the above brilliant ideas. Drezner (2000) argues that
organizations could also use innovative ideas as a tool for bureaucratic politics. He classified
bureaucracies into interest-based and idea-based and remarks that interest-based bureaucracies
push their ends through bargaining and the accumulation of power while idea-based
bureaucracies push theirs through the persuasion of other groups to their principled beliefs,
particularly if they communicate the psychic or material benefits of using their ideas. Obasanjo’s
close link to the parastatal as both the president and ‘Minister for Petroleum Resources” provided
him the opportunity for personal and official exploitation of the parastatal, which the leadership
of the enterprise converted to its advantage in the politics of unbundling and privatisation.
Also, when Rilwanu Lukman resigned in 2003, Dr Edmund Dankoru, a former group
managing director of the NNPC was appointed as the president's adviser on petroleum matters
(Alexander’s Gas and Oil Connections, 2003). Kupolukun and Dakoru then remained the closest
confidant of Obasanjo and the highest technocrats leading policy in the sector, an opportunity
that was exploited to protect the interests of their constituency- the NNPC. Evidence of this
closeness has been revealed in various accusations against President Obasanjo on the way he ran
the nation’s oil and gas revenues in his eight-year term as president during which he personally
supervised the petroleum ministry, while his “kinsman and protégé”, Funsho Kukpolokun, held
sway at the NNPC (Ekott, 2013). His major critics included his Vice Atiku Abubakar, who is the
Chairman of National Council on Privatisation, whose influence has apparently been reduced in
the reform in the oil and gas sector.
Another factor that tilted the bureaucratic political game in support of NNPC at this
period was the decision of Funsho Kupolokun’s leadership to launch series of job cuts that put
the oil and gas workers on edge. Massive layoffs began in 2003 and approximately 2,355
employees were let go in 2005 (Field and Stansell, nd). This action steered the hornets’ nest and
increased civic unrest in the sector. The various labour groups in the sector, especially Petroleum
and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and National Union of
Petroleum and National Gas Workers (NUPENG) have been ably employed in the bureaucratic
politics game to avoid the unbundling of NNPC. These two unions were mainly made of the
senior/middle grade and blue collar employees of NNPC, its subsidiaries and major International
Oil companies operating in Nigeria such as Shell, Cheveron, Exxon Mobil, Liquefied National
Gas, Total etc. The unions have never supported the unbundling and privatisation of
NNPC.Indeed, PENGASSAN has never concealed its dislike for the privatisation of NNPC but
rather prefers what it calls stabilization and repositioning. In various memoranda the union sent
to various committees set up in the oil and gas sector reform, it openly opposed the issue of
privatisation. For instance, in a memorandum the union sent to the umbrella trade union Trade
Union Congress of Nigeria (TUC) in 2010, the signatories, Comrades Babatunde Ogun
(President) and Bayo Olowoshile (Secretary) reiterated what they called ‘several positions of our
Association’ on the way forward for the downstream and oil and gas sector reform. Some of the
positions campaigned by the Union as contained in the memorandum include:
i. PENGASSAN believes that stabilization of NNPC financials and operations including its
contingent liabilities are very paramount for its effectiveness. By this NNPC can be
repositioned and refocused for commercial viability and global competitiveness as other
counterpart national corporations like Saudi-Aramco, Brazil-Petrobras, Malaysia-
Petronas, Norway-StatOil, China-Sinopec, Eni-Italy, Egypt-EGPC, Libya NOC to
mention a few;
ii. Enabling liberalization and refining policy beyond the existing unattractive ones, must be
put in place to stimulate local production and efficiency through NNPC-private sectors
participation, within defined and monitored time frame;
iii. As in the case with National Energy Regulatory Commission, a Commission should be
institutionalised to supervise the implementation of agreed process for realizing this local
refining capacity though (sic) public-private participation.
iv. NNPC is failing because of operational and administrative bottlenecks. There is need to
liberate the corporation and to effectively mandate the Corporation refinery managers
with full responsibility for optimal performance giving the following: operational
autonomy, financial independence and ownership with full responsibility and
accountability (PENGASSAN, 2010:2).
This position supports liberalization, commercialization and deregulation, but not in the wayof
government divestment. NNPC must be intact and rather use public-private partnership as we
have seen in the deals with some International Oil Companies in the gas deal. To a great extent,
this stance has already been pushed through the NCP and BPE as we saw in the statutory order of
2004 referred to in the preceding section where privatisation has changed from government’s
divestment to concessioning.
The influence of this line of thought on the SCRPPSD report cannot be denied altogether.
Perhaps, it would be important to point out that there was no agreement in SCRPPSD report. The
110 page report was signed by only 28 members. Adams Oshimole, the then Nigerian Labour
Congress (NLC) leader and few others did a minority 'Labour Group Report’ (Oduniyi, 2012).
Surprisingly, Mr S. O. Luwoye the then PENGASSAN chairman and other oil sector labour
union representatives in the committee were not part of the labour minority report.The minority
labour report favoured no subsidy removal until the four refineries are made to work as a way to
address the incessant product scarcity in the country. But oil workers perhaps understood more
than their other labour colleagues the implications of liberalization as conceived above on the
survival of their enterprise. It should be remarked that President Obasanjo increased the prices of
Petroleum products severally through his deregulation policies. Even though most of these
increases met with stiff opposition from labour and civil society, he still had his way if not to the
level announced, at least with some adjustments. The privatization policy could not have been
hindered by labour unrest as many believed. As mentioned, many other government owned
entities were privatised despite labour and civil society unrest.
Invariably Rilwanu and his OGIC and other supporters of unbundling and privatisation of
NNPC did not get much of the desired attention from the Obasanjo’s presidency leading to the
withdrawal of his services voluntarily in 2003. Oduniyi (2003) posits that Lukman resigned his
appointment over his disapproval of the running of the nation's oil industry. President Umaru
Yar’Adua assumed office on 29th May 2007. He immediately recalled Rilwanu Lukman as the
Honorary Adviser to the President on Energy and Strategic Matters and appointed him as the
chair to the reconstituted Oil and Gas Implementation Committee (OGIC), which he also chaired
during Obasanjo’s administration. The committee was given the mandate “to transform the broad
provisions in the National Oil and Gas Policy into functional institutional structures that are legal
and practical for the effective management of the oil and gas sector in Nigeria” (Iledare,
2008:23). The committee produced a harmonisation of various unimplemented reports of
committees set up under Obasanjo’s administration, mainly that of Oil and Gas Reform
Committee (OGRC) and another committee set up by the National Council on Privatisation
(NCP) in 2000 (Ikumola, 2007; Igbikiowubo and Agande, 2007).OGIC came up with the
recommendation among others, to unbundle NNPC into five entities. The table shows these.

Table 2: Proposed Entities from NNPC Dismantling and Reporting Profile

S/N Former organisation New organisation Remarks

1 Federal Ministry of  Petroleum National Petroleum Directorate Report to Minister of State for
Resources (NPD) Energy  (Petroleum)

2 Nigerian National Petroleum National Oil Company (NOC) Report to Minister of State for
 Company (NNPC) Energy  (Petroleum)

3 Department of Petroleum Petroleum Inspectorate Report to Minister of State for

Resources (DPR) Commission (PIC) Energy  (Petroleum)

4 Pipeline Product Marketing Petroleum Products Distribution Report to Minister of State for
Company (PPMC) Authority (PDA) Energy  (Petroleum)

5 National Petroleum National Oil and Gas Assets Report to Minister 0f State for
Investment Management Holding Company (NOGAHC) Energy  (Petroleum)
Services Company (NAPIMS)

Source: Nuhu-Koko (2007): http://www.gamji.com/article6000/NEWS7380.htm

The thrust of the Rilwanu Lukman-chaired OGIC recommendation was to introduce an overall
institutional framework that would facilitate managing and overseeing all the phases of the oil
and gas sector in Nigeria more effectively by assigning functional responsibilities to separate
institutional structures (Iledare, 2008). The above institutional framework is therefore based on
the concern to separate the commercial/operations (private sector culture) of the oil and gas
sector from the policy-making and regulatory aspects (public sector administration) in Nigeria.
President Yar’Adua’s major actions towards reforming the oil and gas sector centred on a
number of programmes. He immediately cancelled the sale of two refineries whichObasanjo
hurriedly sold to Bluestar consortium suspected to include his company and Femi Otedola's
company, Zenon Oil(Adewale, 2007;Brimah, 2014). The Group Executive Director of the
Refineries in the NNPC who testified in a Special Senate panel on the last general strike
following Obasanjo’s exit from office revealed that NNPC had planned to effect certain repairs
of the refineries, which would have made them efficient but was stopped by the Obasanjo
administration, which preferred to sell them off. While the submission at the Senate panel
pinpoints to the opposition of the management of NNPC against the sale of the refineries, it did
reveal the barefaced robbery of the nation's assets by Obasanjo and cronies(Adewale, 2007).
The next action of Yara’Adua was to face the unbundling programme of NNPC. The
Federal Executive Council after its meeting ofWednesday, 29 August 2007, approved the
unbundling and re-branding of the Nigerian National Petroleum Corporation (NNPC) as
recommended by the OGIC (see table 2 above). Yar’Adua was latter to set up a 14-man National
Council on Energy comprising the President, Vice-President, some Ministers and Heads of key
government agencies and four appointees of the president, to oversee the implementation.
Yar’Adua also sacked the Group Managing Directors of NNPC, Mr. Funsho Kupolokun in
August 2007 and Alhaji Abubakar Yar’Adua (not a relation) in 2009. While Kupolokun was
believed to have been sacked on account of his shoddy deals with Obasanjo, Alhaji Abubakar
Yar Adua, was sacked to give way for government’s restructuring of the nation’s oil sector
(Izeze, 2009). Indeed, every move to restructure NNPC since 1988 had always begun with the
sack of its officials especially the Group Managing Directors. This move is usually supported
with the unfortunate comments by the Presidency that the aim is to inject new blood into the
parastatal, refocus it in a new direction and to ensure more effectiveness. But Izeze (2009) has
raised the pertinent question about what point in the career lives of the fleet of sacked group
managing directors did they usually become bad administrators. We must be clear whether it is
the position itself that turns people who for the greater part of their career lives have
distinguished themselves to merit such exalted position. From 1988 to 2014 a total of 15 MDs of
NNPC can be counted, giving an average of less than two years in office.
President Yar’Adua directed that NNPC should cease subsidy claims on kerosene, a
directive the institution disregarded outright as revealed by the House of Representatives Lawan
Farouk’s Report already referred to.Yar’Adua had also did a lot to calm nerves of the militants
the Niger Delta region by his amnesty policy, so as to have the peace to prosecute his
programmes. Above all, he granted amnesty to the NigerDelta militants as a ploy to stem the tide
of insecurity in the oil region and attack on oil and gas infrastructure. Unfortunately, Yar’Adua
did not live to pursue some of his started actions and proposals to a conclusionas he died in 2010
before the end of his tenure. Apart from his inability to face the responsibility of governance
with concentration as a result of ill-health, his programme was highly rebuffed and opposed
mainly based on legal framework.Oil and gas workers led by PENGASSAN and NUPENG
employed striking strategiesto cower the government. To surmount the legal challenge, which
was very weighty, the administration embarked on drafting aPetroleum Industry Bill (PIB),
which was introduced to the National Assembly in 2009.Unfortunately, this bill has remained
stuck in the National Assembly long after the exit of Yar’Adua and apparently ended up like that
of President Zedillo’s attempt in 1999 to grant private concessions for the “public service” in
Mexico (Murphy, 2000:77).
The highlights of the PIB however, indicates the thrust of Yar’Adua’s idea of
liberalisation in the oil and gas sector. While there was a concern for dismantling NNPC through
the creation of different institutions to handle policy, regulatory and commercial
unitresponsibilities, the ministerial control over these institutions is again promoted.The
institutions proposed in the bill remain essentially those approved by the Federal Executive
Council with few additions and change in nomenclature.The figure below shows the proposed
institutions in the PIB.

Figure 2: Proposed Institutions in the Oil and Gas Sector in the PIB
Source: PIB Interagency Project Team (2009:8)
From the above, one can decipher that while the MPR has been excluded from the new
set of proposed institutions in the sector, a Minister remains at the Centre of power in the sector.
The functions include supervising all the institutions and the industry, representing the
government, having right of preemption, coordination and making regulation (PIB Interagency
Team, 2009:10).The Minister is supposed to originate from the Ministry of Power (Minister of
State) but rather operates from the National Petroleum Directorate (NPD), which is assigned the
responsibility of policy formulation for the oil and gas Sector, monitoring and supervising
government policy in the industry, and providing “the Minister with the institutional platform for
coordinating the industry” (PIB Interagency Project Team, 2009:10). The National Oil Company
(NNPC Ltd) is assigned the responsibilities of partnering in International Joint Ventures (IJV)
and holding of Concessions. It is mentioned also that it will receive assets of NNPC to be
prescribed by the Act; it is to be self-funding and financing and more importantly, to be wholly
owned by government (PIB Interagency Project Team, 2009). The PIB divides oil and gas sector
into three: upstream, downstream and midstream. Each of these sectors is to have a regulatory
agency. Yet these regulatory functions have also been allocated to the Minister and NPD.
Moreover, the new arrangement further consolidates the single-dominant-player model rather
than introducing multiple-player model in the domestic oil and gas industry and markets (Nun-
Koko, 2007) and has not shown any commitment towards minimizing government control.
Yara’Adua was succeeded by Dr. Goodluck Ebele Jonathan as President. Since his
assumption of the full powers of the president at the death of Yar’Adua in 2010, and subsequent
election as the President on 29th May 2011, there has been no clear perspective concerning the
unbundling and privatisation of NNPC. Things have pretty much went back to how they were in
the Obasanjo years or actually worse (Brimah, 2014). There is strong collaboration and
compromise among the three key actors, the Presidency, MPR and NNPC. Under him the MPR
hasclearly assumed control of the sector, but this has also not affected the sphere of authority of
NNPC. The closeness of the President and the Minister has helped to fully subjugate the NNPC.
Since 2010, NNPC has had five different managing directors. These sacks were as result of
confrontation or what is described as insubordination of the MDs to the Minister of MPR (Udo,
2014). The Minister of Petroleum Resources side-lines the management of NPC in most
important decisions, preferring to use her “powerful aides” (Udo, 2014) in carry out assignments.
.personnel changes affecting senior officials of NNPC and subsidiaries are now done by the
Minister (NNPC News and Update, 2012).Despite several allegations of misdemeanor associated
with NNPC and the Ministry including the unaccounted for revenue that fluctuates from$48
million to $10.8 million raised by the Governor of Central Bank of Nigeria, Lamido Sanusi
Lamido in 2013, renting of private jets, no practicable solutions is forthcoming in Nigeria’s oil
and gas sector reform.
Every reform process is halted in patient expectation of the enactment of the PIB.
President Jonathan re-introduced an amended version of the PIB to the National Assembly in
2012. The amendment reflects most of the contents of the 2009 draft but a new set of
government parastatals are proposed. In Part II of the bill, which deals with institutions in the
petroleum industry, the following were proposed: PTB – Petroleum Technical Bureau; MPR –
Ministry of Petroleum Resources, UPI – Upstream Petroleum Inspectorate, DPRA –
Downstream Petroleum Regulatory Agency, PTDF – Petroleum Technology Development Fund,
PEF – Petroleum Equalisation Fund, PHCF – Petroleum Host Communities Fund, NAPAMCorp
– National Petroleum Assets Management Corporation, NAPAMCO – Nigerian Petroleum
Assets Management Company Limited, NOC – National Oil Company, NGC – National Gas
Company. The ministry has been fully returned to the fold of institutions, and the Minister is
“responsible for the co-ordination of the activities of the petroleum industry and shall exercise
general supervision over all operations and all institutions in the industry”. This all-
encompassing role of the Minister is backed up by significant powers, which include the power
to formulate, determine and monitor government policy in the oil and gas industry; the power to
issue licences and leases in the upstream and downstream sectors of the oil and gas industry and
the power to advise the President on the appointments of the Chief Executive Officers of the
institutions established under the Bill. The Minister is also to act as Chairman of NAPAMCorp
whose the function in the bill is the managing of government assets in the industry
(Nigerianmuse, 2014), which invariably includes the asset of present NNPC. Dornim Solicitors
and Legal Consultants (2014) describes the functions assigned to the MPR in the 2012 bill as
enlarged. Apart from imposing the ministerial control, the bill also gives enormous powers to the
president. Perhaps the passage of the bill into law will solve the problem of unbundling NNPC
but with less privatisation in terms of minimizing government control. Unbundling and
privatisingof NNPC in accordance with the objectives of the Public Enterprises (Privatisation
and Commercialisation) Acthas derailed enormously, and, NCP and the BPE have clearly
become incapacitated to do much in this regard. Indeed the Oronsanye Panel set up by President
Jonathan on restructuring of government MDAs included BPE among agencies that should be
scrapped (Ireports,com, 2012). Invariably, it is a spent force as far as liberalization reform and
restructuring of government agencies are concerned.
The bureaucratic politics model has actually propelled reforms in the oil and gas sector in
Nigeria, and in the privatization of NNPC and its subsidiaries.. This model has played out in the
self-serving interest of Nigerian political executives to keep the parastatal close to their control
and that of the agency and the MPR to compete for sphere of influence and maintenance of
critical tasks. The Ministry of Petroleum resources has,as opportunity allows, tried consolidating
its power on the oil and gas sector by ensuring that NNPC autonomy is within the bounds of
ministerial control. Its attempts to ensure the unbundling and privatisation of the parastatal has
largely been directed towards reducing the tasks of NNPC to be able to control it, its subsidiaries
and associated companies. While many other factors including civil unrest, corruption and other
political and administrative pitfalls may have contributed to the inability of various regimes to
unbundle and create a national oil company with private equity, with little or minimal control of
the government since 1988,bureaucratic politics obviously was the main strategy through which
the implementation of the provisions of Decree 25 of 1988, and later Public Enterprises
(Privatisation and Commercialisation) Act of 1999, and other subsequent decisions therefrom
have been derailed.

Conclusions
The objective of this study has been to show that privatization policies as originally
designed for unbundling and privatizing the state owned monopoly in Nigeria’s oil and gas
sector, the NNPC were either derailed or unimplemented because of the desire of political
executives, largely the president and ministers of MPR to keep the parastatal close to their
control and the intrigue of the parastatal itself to hold on to its critical tasks. I have effort to
illustrate that bureaucratic politics could play a significant role in derailing or constraining the
implementation of public policies in developing countries. Various kinds of bureaucratic political
strategies, which led to degrees of conflicts and/or compromises among political and
bureaucratic leaders have played out in trying to implement the policy of establishing a fully
commercialised NNPC, minimising government control, and integrating the control of privatise
sector in Nigeria’s oil and gas sector. Nigeria like most developing countries, is highly rooted in
ethnic, patronage and clientielisitc politics. These are not immune in the implementation of
government policies. Policy implementation is notsimply a managerial or administrative
problem;it is a political process concerned with whogets what, when, how, where, and from
whom, and, there are multiple actors. “The coalition of actors opposed to effective
implementation may stymie the capacity which mightotherwise have been sufficient” (Brynard,
2005:16). The Nigerian oil sub-sector as the mainstay of the country’s economy is dominated by
various interests including the political executives, bureaucratic agencies, Multinational Oil
Companies (MNCs), labour unions, including but not limited to those in the subsector, the Niger
Delta militant groups and the Nigerian public at large. The political executive and bureaucratic
agencies have an edge over other actors in policy implementation. Their potential capacity to
affect thecollective outcomes of policy decisions must be taken into account by other participants
(Laumann, Heinz, Nelson and Salisbury, 1991). They control the resources necessary to carry
out orto contract public action, as well as control over the apparatus to respond to protest or
opposition (Casey, 1998). Implementation slippage can therefore depend so much on the
interests of those controlling these bureaucratic positions. They canengage in compromises and
conflicts that helped them retain their self-serving interests irrespective of how these relate to the
decided policy. NNPC have exploited its resources including leadership, innovative ideas and
political supports from relevant individuals and groups to forestall the proper implementation of
its unbundling and privatization. Above all, the interests of those in position to engender the
implementation of this unbundling and privatisation policy, especially the operators at the
presidency and MPR apparently diverged from the policy goal of minimising government control
and creating a commercially autonomous national oil company. The trend in the implementation
of privatisation policy has been that only those that have been crippled by debt were possible
under the supervision of the BPE while lucrative ones are handled by Presidential Committees
outside privatization policy and structures (Adoga, nd).Bureaucratic agencies cash in on these
varying interests to bid for the maintenance of critical tasks or to aggrandise their positions
(Rourke, 1984).
The major finding of this research agrees with Preston and‘t Hart’s (1999)
operationalization of bureaucratic politics in terms of compromise-seeking and bureaucratic
confrontation, which accounts for slippages in policy implementation. It however, suggests that
both bureaucratic compromise and confrontation enhance the chances of policy slippage. Indeed,
bureaucratic confrontation may have greater chances of facilitating policy implementation.
Actors can compromise when it suits their interests but incongruent with the policy as decided.
This is a case of complicity to satisfy mutual interest. On the other hand confrontation can
become a greater challenge to act in accordance with the law or policy. The finding reveals that
commitment to implementation of the unbundling and privatisation of NNPC has been relatively
high during the periods of confrontation of the MPR and NNPC (compare Babangida and Yar’
Adua).This finding requires further testing in some similar developmental environment to
ascertain whether bureaucratic politics in form of bureaucratic confrontation is more beneficial to
effective policy implementation rather than bureaucratic politics as compromise.
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There is strong collaboration and compromise among the three key actors, the
Presidency, MPR and NNPC. Under him the MPR has clearly assumed control of the sector, but
this has also not affected the sphere of authority of NNPC. The closeness of the President and the
Minister has helped to fully subjugate the NNPC. Since 2010, NNPC has had five different
managing directors. These sacks were as result of confrontation or what is described as
insubordination of the MDs to the Minister of MPR (Udo, 2014). The Minister of Petroleum
Resources side-lines the management of NPC in most important decisions, preferring to use her
“powerful aides” (Udo, 2014) in carry out assignments. .personnel changes affecting senior
officials of NNPC and subsidiaries are now done by the Minister (NNPC News and Update,
2012). Despite several allegations of misdemeanor associated with NNPC and the Ministry
including the unaccounted for revenue that fluctuates from $48 million to $10.8 million raised by
the Governor of Central Bank of Nigeria, Lamido Sanusi Lamido in 2013, renting of private jets,
no practicable solutions is forthcoming in Nigeria’s oil and gas sector reform.
Apart from imposing the ministerial control, the bill also gives enormous powers to the
president. Perhaps the passage of the bill into law will solve the problem of unbundling NNPC
but with less privatisation in terms of minimizing government control. Unbundling and
privatising of NNPC in accordance with the objectives of the Public Enterprises (Privatisation
and Commercialisation) Act has derailed enormously, and, NCP and the BPE have clearly
become incapacitated to do much in this regard. Indeed the Oronsanye Panel set up by President
Jonathan on restructuring of government MDAs included BPE among agencies that should be
scrapped (Ireports,com, 2012). Invariably, it is a spent force as far as liberalization reform and
restructuring of government agencies are concerned.
The bureaucratic politics model has actually directed the implementation of reforms in
the oil and gas sector in Nigeria, and in the implementation of decided policy of
commercialisation and privatization of NNPC and its subsidiaries. This model has played out in
the self-serving interest of Nigerian political executives to keep the parastatal close to their
control and that of the agency and the MPR to compete for sphere of influence and maintenance
of critical tasks. The Ministry of Petroleum resources has, as opportunity allows, tried
consolidating its power on the oil and gas sector by ensuring that NNPC autonomy is within the
bounds of ministerial control. Its attempts to insist on the unbundling and privatisation of the
parastatal has largely been directed towards reducing the power and infleunce of NNPC to be
able to control it, its subsidiaries and associated companies rather than any desire to estbalsh
autonomous inisuttions that would operate with diminished government control and autonomy.
While many other factors including civil unrest, corruption and other political and administrative
pitfalls may have contributed to the inability of various regimes to unbundle and create a national
oil company with private equity, with little or minimal control of the government since 1988,
bureaucratic politics obviously was the main strategy through which the implementation of the
provisions of Decree 25 of 1988, and later Public Enterprises (Privatisation and
Commercialisation) Act of 1999, and other subsequent decisions therefrom have been derailed.
The need to anticipate the trajectory of this phenomenon and to guard against its effect at the
policy implementation stage becomes a new challenge to policy makers.

Rilwanu Lukman’s inability to get the Obasanjo’s government give preference to his reform
choice of dismantling NNPC and his eventual resignation in 2003 invariably point to the fact that
Funsho Kukpolokun the Managing director of NNPC from 2003 to 2007, was dominating the
policy implementation direction at this time. The appointment of Edmund Daokoru, a former
group managing director of the NNPC to replace Rilwanu Lukman as the presidential adviser on
petroleum matters in 2003 also point to the dominance of the NNPC bureaucrats at this period.
Kupolukun and Daokoru remained the closest confidant of Obasanjo and the highest technocrats
leading policy in the sector, an opportunity that was exploited to protect the interests of their
constituency- the NNPC. Evidence of this closeness has been revealed in various accusations
against President Obasanjo on the way he ran the nation’s oil and gas industry in his eight-year
term as president during which he personally supervised the petroleum ministry, while his
“kinsman and protégé”, held sway at the NNPC (Ekott, 2013).