WHO SHOULD BE BLAMED FOR NNPC’S INEFFICIENCY?
President Umaru Musa Yar’Adua was very correct when he said at the
opening of the eighth edition of the Nigerian Oil and Gas Conference in
Abuja, that the Nigerian National Petroleum Corporation (NNPC) had
derailed from the objectives for which it was established and had been
unable to play its statutory roles in the nation’s oil sector. He was also very correct when he attributed the loss of focus by the
NNPC to what he described as “the paucity of the policy, regulatory,
operational, fiscal and managerial frameworks that govern the country’s
oil and gas industry.
However, for obvious reasons, he cleverly dodged to say that the woes of
the NNPC became worse in the last nine years especially under the reign
of Gen Olusegun Obasanjo who ran the corporation as a sole
administrator. The Obasanjo government short-circuited all existing
platforms for decent business transactions in the corporation and
technically ran the nation’s apex oil concern aground. Truth be told,
the pathetic state of the NNPC today is a showcase of the Obasanjo’s
legacy in the oil industry.
Any performance rating or assessment of the NNPC would be out rightly
bias and grossly incomplete if it does not take due consideration of the
negative effects of undue Presidency’s interference on the activities of
the corporation.
The Obasanjo Presidency took this unholy meddling in the affairs and
especially the accounts of the NNPC to a criminal height throughout the
eight-year stay in office. The actual and objectively ascertainable
consequences of the interferences greatly hindered the effective, smooth
and transparent functioning of the corporation as commercial and
profit-oriented business conscription. This is the truth.
No doubt that since the NNPC was established to oversee the management
and operation of the nation’s oil industry, the Corporation had not only
failed to establish itself as an active oil company in business to make
profit, it also failed in establishing administrative structures that is
free from government manipulations. And this led to the 100 percent
hijack of the day-today decision making muscle of the corporation by Gen
Obasanjo under the pretence of correcting the fraud and corruption
culture often associated with the organisation.
Recent public pronouncements by President Yar’Adua and the Oil and Gas
Reform Committee, could best be taken as an indictment on the Obasanjo
Presidency. The last administration left the NNPC far worse than it met
it in terms of the level and sophistication of opaque financial
transactions backed with executive recklessness.
President Yar’Adua rightly remarked at the Abuja conference that “It is
imperative that we tell each other a few home truths. An industry that
had operated for about five decades, like the Nigerian oil and gas
sector, still suffered from funding problems, perennial shortfalls,
especially in funding of upstream operations that have constituted great
obstacles to the timely growth and development of the industry. “The situation is not any better when we look at the other aspects
(downstream) of the energy industry. The provision of petroleum
products, including PMS, AGO and LPG are dependent almost 100 percent on
importation.
“It stands to reason that such situation cannot and should not be
allowed to continue any longer.”
If Yar’Adua expected applause for the vote of no confidence on the NNPC,
obviously he is not going to get it because he failed to properly
situate the NNPC handicap or rather inertness which was to a great
extent not the fault of the crop of the high quality technical staff of
the corporation. NNPC had some of the best brains in the Nigerian oil
and gas industry. At some point, the foreign multinationals were even
pouching the highly trained NNPC exploration and production personnel.
So it would very unfair for anybody to run down the technical capacity
of the corporation to do oil business- upstream and downstream. To a great extent, the NNPC was the architect of its misfortunes. The
administrators of the Corporation especially within the last eight and
half years allowed the Presidency to use them to ridicule the
corporation’s efforts in the nation’s crucial oil sector. This is the
truth.
The top level administrators of the corporation and their collaborators
in government especially at the Presidency under Obasanjo milked the
organization through fraudulent diversion of funds from sales of crude
oil, unclear -accounted importations of petroleum products, oil block
awards and other business transactions of the NNPC’s strategic business
units.
Blanket condemnation of the NNPC as inefficient and fraud infested may
not be enough in our genuine quest to unravel the demon that has
continued to hold the corporation moribund. Every concerned Nigerian
should bother to ask where and how the NNPC gets the funds to run its
operations including the joint venture obligations. Does the Corporation
really have anything like budget in the strict sense of the term? Government’s interference in the operations of the firm, especially in
money matters has done more harm, and made the corporation to lose its
credibility both at home and abroad.
Ask me, and I would say that Government should completely hands- off the
NNPC so that the corporation can function like a commercial
profit-driven business outfit. And the parasitic marriage of convenience
between the Presidency and the corporation should be dissolved
immediately rather than being re-packaged under the guise of reform and
restructuring. There is no amount of restructuring that would make NNPC
profit-driven if the corporation continues to take direct instructions
from the Presidency or even any other government agency that are not
schooled in the highly technical oil and gas exploration and production
business even the marketing of the crude and products.
It was an outright mischief for the Presidency to publicly express
misgivings over the level of compliance of the Nigerian National
Petroleum Corporation (NNPC), the Department of Petroleum Resources
(DPR), the Nigerian Customs Service (NCS) and the Federal Inland Revenue
Services (FIRS) with the rules on revenue remittance to the Federation
Account. President Yar’Adua is fully aware of what the problems of the
NNPC were and should confront such issues frontally if he is serious at
sanitizing the NNPC. There is a great need to probe the last sole
administrator of the NNPC (Obasanjo’s Presidency with all the gangs that
liaised between the Presidency and the Funso Kupolokun-headed NNPC).
This would help place the new NNPC in proper footing for the proposed
re-branding.
The Auditor-General (AG) should not only carry out a comprehensive audit
of the Federation Account to ascertain completeness and ensure the
integrity of balances in the national account as directed by the
president, the AG should support a comprehensive probe of the entire
business of the NNPC within the last nine years to ascertain the extent
of damage done to the NNPC accounts and the national economy by the
Obasanjo Presidency.
The probe should seek to review the Petroleum Subsidy Account- the
Equalisation Fund, signature bonuses account (s) for all the quarterly
awards of oil blocks to funny investors, crude oil earnings especially
the component of the over 350 million barrels per day crude feedstock
which was supposed to be set aside for domestic refineries but which
were never refined locally but sold abroad under opaque transactions. For the first time, I challenge the current NNPC administrators to
institute an independent audit of its finances and come up with a strong
case to prove that the problems of the corporation were extraneous.
Needless to say that whether the Group Managing Director likes it or
not, if he does not pioneer this self audit, any probe instituted by the
Presidency, would obviously indict the NNPC management for fraud and
inefficiency. It is time we place the NNPC problem in proper
perspective. This will help re-position a re-banded NNPC as a commercial
profit-oriented business organization.
BY: IFEANYI IZEZE
IFEANYI IZEZE, IS A PORT HARCOURT-BASED ENABLING ENVIRONMENT CONSULTANT
(iizeze@yahoo.com)