BY PUNCH EDITORIAL BOARD
Minister of Petroleum Resources, Diezani Alison-Madueke
UNREMITTINGLY, presidential sledgehammer on the Nigerian National Petroleum Corporation, each time, leads to the removal of its Group Managing Director. The latest victim is Andrew Yakubu, who spent barely two years in the saddle. Joseph Dawha, who succeeded Yakubu, is the fourth GMD during the tenure of the Minister of Petroleum Resources, Diezani Alison-Madueke. Curiously, the corporation has had six of such changes in five years. Yet, reasons for their removal are never made public. It seems that there is more to this than meets the eye. As a public institution, Nigerians deserve to know why these chief executives don’t last long. Alison-Madueke, who supervises the NNPC, owes the country an explanation.
While Yakubu and his predecessor, Austen Oniwon, spent two years each, Mohammed Barkindo (2009-2010) and Shehu Ladan (April-May 2010) were not as lucky. These leadership changes, which have also affected other senior cadres, diminish the quality of the corporation’s manpower. It may well be part of the reasons the NNPC has abysmally failed in the discharge of its statutory responsibilities. Dawha, therefore, has every reason to be uncomfortable.
The whimsical running of the NNPC invariably affects policies in the oil and gas industry. Instead of its GMD being focused on how to progressively drive the corporation, his utmost priority would be how to survive. This should not be the case.
However, the image Nigerians have of the NNPC is that of a tower of corruption, where the public treasury is looted with reckless abandon. The details are unspeakable: since 2005 its books have not been audited, provoking series of probes into its activities by the parliament. A House of Representatives probe in 2012 revealed a monumental scam in the importation of fuel. Nigerians took to the streets in response to the N1.7 trillion purportedly paid to 140 fuel marketers.
Interestingly, the Federal Government has since reviewed annual subsidy payment to N971 billion, as contained in our budget. This is not only an admission that our treasury had been haemorrhaged by a cabal, but also an indictment of the system that bred the abuse.
Non-remittance of revenues from crude oil proceeds to the Federation Account, as the 1999 Constitution stipulates, is common with the corporation. The immediate past Governor of the Central Bank of Nigeria, Lamido Sanusi, put the NNPC on the spot on this, with his allegation that it failed to remit $20 billion to the Federation Account. The NNPC’s defence so far has been anything but clear and rational. When its finances become the subject of endless reconciliations among the Central Bank of Nigeria, the Ministry of Finance and Office of the Accountant-General of the Federation, and also open to forensic examination, it is clear evidence that all is not well.
Nigerians should be worried that not even the Nigerian Extractive Industries Transparency Initiative surveillance, since the National Assembly has abdicated its responsibility, could make the NNPC to be transparent and accountable to the people. In NEITI’s latest report that spanned 2009 to 2011, it said the state oil company claimed N1.4 trillion as fuel subsidy, just as it paid N1.6 trillion to other independent marketers, which aggregates to N3 trillion. Again, the corporation has yet to pay N4.42 billion being “over-recovery from some marketers” into the Federation Account.
Intriguing as this might be, more perplexing is why it failed to ensure the renewal of the Memorandum of Understanding for Joint Venture partnership with the international oil companies, which expired in 2008. The consequence, NEITI highlighted, was that “companies covered by the JVs still use expired MOU in their transactions with Nigeria, resulting in revenue loss of the difference between NNPC and the covered entities position of over $1.7 billion.”
This graft-prone template defines operations at the NNPC; and it underlines why its core responsibility has become the importation of petrol and kerosene and payment of subsidy claims, instead of guaranteeing the operational efficiency of the petroleum downstream and upstream sectors. The former is in tatters, as the less than 30 per cent production capacity of our four refineries in Port Harcourt, Warri and Kaduna, for two decades, proves. Unfortunately, this is a deliberate, fraudulent policy, amplified by the fate of the Petroleum Industry Bill that is meant to radically overhaul the sector, but has been stalled in the parliament for six years.
Nigeria, as an oil producing country, has no reason to be an importer of petroleum products. No other member nation of the Organisation of Petroleum Exporting Countries does that. Our presidents and the ministers of petroleum, who got the country entangled in this roulette of fraud, should hide their faces in shame. There is no polite way of saying this.
Mexico, a well known crude oil producer, has been exploiting its oil resources for 75 years through its state oil company, Petroleos Mexicanos, which has a production output of 2.47 million barrels per day, owns 8,350 service stations, through which it sells its products to citizens.
When the performance of Mexico’s oil company is juxtaposed with the 130,000 bpd output of the Nigerian Petroleum Development Company (exploration and production), a subsidiary of the NNPC, a picture of a national oil firm in a total mess becomes too apparent.
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Contact: editor@punchng.com
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