NNPC: Meeting global demand amidst daunting allegations

Johnson Eze

Since inception, Nigerian National Petroleum Corporation (NNPC) has been statutorily given the mandate for the exploration, production and sales of petroleum and gas resources of the country in line with international best practices. For NNPC which supplies more than 90 per cent of Nigeria total export earnings, the responsibility has been a daunting one. With this enormous responsibility, the corporation has become a cynosure of all within and outside Nigeria.
In view of the task, the corporation’s involvement in exploration and production of oil has not been limited to participation in joint ventures alone. It has also set up its own exploration and production outfit, Nigerian Petroleum Development Company (NPDC), all geared towards meeting global standard and attaining a world class brand.
NNPC has also fashioned strategies depending on the prevalent circumstance to move Nigeria’s crude oil effectively and efficiently in the international market. The corporation follows critically the trend in the international oil market in order to evolve the best strategy for selling the country’s oil at the best possible price.

In the area of diversification, the corporation has through its three major refineries in Kaduna, Part Harcourt and Warri ventured into production of petrochemicals. This is in line with its resolve to expand the foreign exchange earning potentials of the oil industry as well as the provision of the needed raw materials for rapid agricultural and industrial development in Nigeria.
In its upstream operations, NNPC has created mutually beneficial relationships with the oil producing firms which have translated into increased revenue for the country. Recently, oil exploration suffered a huge setback. One major reason being the reluctance of National Assembly, Nigeria’s law-making body to pass the petroleum industry bill PIB expected to reposition the sector for optimum performance. Another reasons being due to the fact that serious attempt is not being made to plough back any of the revenues made from oil into areas of research and development as bulk of the revenue are directed to the federation account for sharing to the three tier of government. Some levels of financial autonomy can go a long way to reposition the investment and revenue potential of the corporation.

Luckily, NNPC is blessed to have competent, management led by Engr Andrew Yakubu, Group Managing Director (GMD). Well experienced in the industry, the visionary GMD in exploring opportunities to advance the fortunes of the corporation asked government to use Memorandum of Understanding (MoU) as an instrument of encouraging and attracting new investment in the sector. He also initiated the Joint Operation Agreement (JOA) which concretised the joint ventures between government and the multinational oil producing firms, recognising the need to commit the firms towards investing in the long-term welfare of the industry.
The corporation has also continued to sustain petroleum products supply nationwide notwithstanding the occasional hiccups due to labour actions and vandalism of pipelines.

However, scathing allegations of fraud from individuals, organizations and agencies had plummeted the image of this ivory tower in the last few months, much to the delight of the critiques of government and self-serving individuals hell-bent on bringing the nation on its knees.
One of such allegation was the report credited to suspended Governor of Central Bank of Nigeria (CBN), Malam Sanusi Lamido Sanusi, alleging that the corporation withheld $49.8 billion representing 76 percent of the total crude oil revenues from January 2012 to July 2013. This allegation was stoutly refuted by the then Acting Group General Manager, Group Public Affairs of NNPC, Dr. Omar Farouk Ibrahim.
He said, “It needs to be stated that the figure of 594.024 million barrels of crude oil given by the CBN as the total crude oil lifting for the period of January 2012 to July 2013 does not represent the correct picture of crude oil lifting for the period. From our records, the correct figure is 618.55m barrels. This shows that the CBN understated the actual crude lifting by 4.13 percent”.
But Sanusi went further to announce to the press after a reconciliation agreement with the finance minister, Dr. Mrs Ngozi Okonjo-Iweala, which brought the said amount to $10.8 billion that the money is actually $20 billion. With this inconsistency, it became obvious that he was either pursing a personal interest or has an axe to grind with his employers.

Again, the Nigeria Extractive Industry Transparency Initiative (NEITI) recant on its earlier submission that $22.8 billion was un-remitted by NNPC is one that made many people develop goose pimples. You will recall that on February 26, 2014, before Hon. Muraino led House of Representatives Joint Committees of Justice, Petroleum (Upstream), and Petroleum (downstream) that investigated the Berne Declaration allegation of fraud against NNPC, the Executive Secretary, Zainab Ahmed submitted that NNPC cannot account for $22.8 billion in oil revenues.

However, in a dramatic u-turn, the executive secretary blamed the media to have misled the public by quoting her wrongly. Was she threatened to recant the findings she claimed came from her agency’s audit report?
With all these unverified figures about NNPC flying around, can anybody be blamed to now believe that all the allegations of corruption against the corporation and the Petroleum Minister, Mrs Diezani Allison-Madueke, were mere perceptions and stereotypes?
Seeing that the allegation of the missing $20 billion could not hold water, these enemies came up with another allegation. This time is about the charter of aircraft by the corporation for the ‘personal’ use of the minister, who is also the chairperson NNPC board. It is worth noting that the NNPC Act Cap. N123, LFN 2004, empowers the corporation to hold, manage and alienate moveable and immovable property and enter into contracts or partnerships with any company, form or persons which in the opinion of the corporation will facilitate the discharge of the said duties under this. This indeed is an acceptable practice globally.

What Nigerians and perhaps the global community should know is the fact that operations in the oil and gas sector are time sensitive and often require prompt attention, which cannot be achieved using regular scheduled flights. It is standard practice for large oil and gas corporation such as NNPC to make use of the most efficient means of transportation to ensure the effective and efficient coverage of the vast scope of critical oil and gas assets under their purview.
Obviously, what all these portend is a dangerous trend where people saddled with responsibilities of authority are in a haste to join and boost the case of the army of those who want the head of people in sensitive government position off their neck.

Eze wrote from Abuja