VZCZCXRO8091
PP RUEHMA RUEHPA
DE RUEHOS #0653/01 2691048
ZNR UUUUU ZZH
P 261048Z SEP 07
FM AMCONSUL LAGOS
TO RUEHZK/ECOWAS COLLECTIVE PRIORITY
RUEHUJA/AMEMBASSY ABUJA PRIORITY 9217
RUEHC/SECSTATE WASHDC PRIORITY 9447
INFO RUFOADA/JAC MOLESWORTH AFB UK
RUEKJCS/SECDEF WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC

UNCLAS SECTION 01 OF 02 LAGOS 000653 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DOE FOR GPERSON, CGAY 
STATE PASS OPIC FOR ZHAN AND MSTUCKART 
STATE PASS TDA FOR EEBONG, PDAVIS 
STATE PASS EXIM FOR JRICHTER 
 
E.O. 12958: N/A 
TAGS: EPET ENRG PGOV NI
SUBJECT: PRIVATIZATION LEADERS PRAISE PREVIOUS USG 
ASSISTANCE 
 
¶1.  (SBU) Summary:  The leaders of Nigeria's Bureau of Public 
Enterprises (BPE) and the Nigerian Electricity Regulatory 
Commission (NERC) expressed their appreciation for US Trade 
and Development Agency (TDA) support in Nigeria, but noted 
that American financial assistance for privatization had 
ceased.  The BPE chief claimed the proposed restructuring of 
Nigeria's national oil company was the result of her agency's 
work and discussed the prospects for current oil and gas 
legislation.  End Summary. 
 
-------------------------------------- 
TDA Helped Boost Privatization Efforts 
-------------------------------------- 
 
¶2.  (SBU) Irene Chigbue, Director General the BPE, gave an 
overview of ongoing efforts to privatize Nigerian state-owned 
companies during an introductory meeting with Econoffs. 
Chigbue recalled that the United States had been the first 
country to aid Nigeria in its privatization efforts.  She 
recalled that TDA consultants had conducted several 
privatization studies on Nigerian state-owned firms and the 
USG had provided funds to hire consultants to assist the BPE 
staff directly.  Chigbue noted with obvious regret that 
"other entities" had taken advantage of those funds and the 
money for BPE quickly dried up.  The World Bank and later the 
UK's Department for International Development stepped in to 
provide financial support, but she said the United States was 
the economic model they looked to as a guide and the American 
consultants on her staff had been invaluable to the BPE. 
Chigbue expressed her hope that the United States would once 
again provide support to the BPE. 
 
¶3.  (SBU)  Dr. Ransome Owan of NERC also noted the positive 
role TDA had played in assisting his government's efforts to 
privatize the struggling Nigerian power sector.  During the 
meeting in which he described ongoing privatization 
initiatives, Owan recalled that TDA had provided more than 
$500,000 for a study on electricity issues.  He asked for 
further assistance in training of NERC commissioners and 
raised the possibility of partnering with an American state 
electricity commission. (Note: A TDA team is currently 
in-country assisting NERC.  Embassy and NERC will hold a 
joint press conference in Abuja October 2 to highlight that 
assistance and, for the GON's purposes, to show some movement 
towards generating increased power supplies for the 
underserved people of Nigeria.  Congen Lagos and Embassy 
Abuja would appreciate addressees thoughts on possible 
twinning arrangements for NERC with a US state-level 
regulatory body.  End Note.) 
 
--------------------------------------------- ----- 
BPE Chief: Energy Bills Must Start from Scratch 
--------------------------------------------- ----- 
 
¶4. (SBU) On President Yar,Adua's recently announced plans to 
restructure the Nigerian National Petroleum Corporation 
(NNPC), Chigbue took credit, saying the original plans for 
doing so had come from the BPE.  In fact, she noted that 
previous plans to privatize NNPC had stalled because of a 
failure to enact legislation that would liberalize energy 
sectors in Nigeria.  Some enabling gas sector legislation was 
introduced in the National Assembly during its last session 
but failed to make its way through the legislative process. 
According to Chigbue, the enabling gas sector legislation 
must now start over again and the BPE would take that 
opportunity to conduct major revisions of the bill. 
 
¶5. (SBU) When asked about plans to privatize Nigeria's aging 
and troubled oil refineries she admitted the international 
oil companies expressed little interest in acquiring them and 
said she understood the myriad of reasons that keep them 
away.  She did say some Chinese and Indian firms had 
expressed interest, but did not provide further details.  Nor 
did Chigbue comment on the public controversy surrounding the 
sale by the previous administration of two refineries to a 
private Nigerian consortium.  That sale was reversed by the 
current administration under a hailstorm of criticism that 
 
LAGOS 00000653  002 OF 002 
 
 
the refineries had been sold for much less than their actual 
worth. 
 
¶6.  (SBU) Comment:  TDA's support to Nigeria's privatization 
efforts was greatly appreciated by the Nigerians and, 
according to them, instrumental in kick-starting those 
initiatives.  We have heard many opinions on the status of 
energy legislation not finished in the previous Assembly 
term.  Chigbue's view that gas sector legislation must start 
over differs from the view expressed by the Senate Gas 
Committee Chair, Osita Izunaso, who indicated that passage by 
the Senate would allow the House Committee to immediately 
move forward on the bill.  End Comment. 
MCCONNELL