- By Kunle Badmos
As the Nigerian National Petroleum Company (NNPC) Limited fated to endure unending but unfounded attacks on its integrity? Again, primordial allegations against the oil behemoth have been dredged up. In the last year, there have been unremitting but unfounded allegations of wrongdoing by the management.
The latest in the series is the allegation by former Central Bank (CBN) governor, Sanusi Lamido Sanusi, of non-remittance of money (dollars) into the Federation Account and opacity in the operations of the NNPC. He also described the national oil company as the most opaque oil organization in the world.
These allegations are not exactly new but are a rehash of the same accusation he levelled against the NNPC 10 years ago. Then, Sanusi had accused the NNPC of withholding over $49 billion, which he said ought to have been paid into government coffers.
The federal government then headed by Dr. Goodluck Jonathan insisted Sanusi got it all wrong. The NNPC itself held that even as CBN governor, Sanusi did not have a proper grasp of how the process of remittance to the treasury worked.
This was shown to be the case after the reconciliation of figures with relevant agencies of government, it was discovered that the balance of unremitted oil revenue was the amount spent by the NNPC on its operations under the then-extant law, the NNPC Act. Despite this evidence, Sanusi kept insisting funds were missing, banding different figures like $10.8 billion and $12 billion before finally settling for $20 billion.
The former monarch’s continued insistence on missing funds forced the senate to investigate the allegation which eventually cleared the NNPC of any wrongdoing.
Sanusi himself in his capacity as CBN governor attended hearings of the Senate Committee on Finance where the issue of kerosene subsidy was exhaustively looked at vis-à-vis the Presidential Memo directing the removal of kerosene subsidy.
The explanation was that the process of implementing the presidential directive was not followed through by the Minister of Petroleum Resources at that time as required by law which technically meant that the kerosene subsidy was not removed.
It was based on this that the Senate Committee on Finance led by Sen. Ahmed Makarfi recommended that the executive should prepare and present to the National Assembly, a supplementary budget ‘to cover the expenditure in the sum of N90.6 billion for Premium Motor Spirit subsidy 2012 and N685.9 billion for kerosene subsidy expended without appropriation by the National Assembly.
The auditing firm, PricewaterhouseCoopers (PwC), cleared the NNPC of misappropriation of funds.
For observers of events in the Nigerian oil sector, there can be no argument that the NNPC is the most investigated business entity in Nigeria. Beginning four decades ago when in 1979, the Justice Ayo Irikefe panel of inquiry set up to investigate an alleged missing N2.8 billion oil money returned a verdict of not guilty on the NNPC, the company has undergone several investigations and audits including the ones by the Senate and PwC mentioned above, and has not being found culpable for any infractions.
There is abundant evidence to show that Sanusi is on shaky ground. Had he diligently followed developments in the last four years since Kyari has presided over the affairs of the NNPC, he would have noticed a level of transparency in the running of the company not seen since it was established over 40 years ago.
One of Kyari’s first acts in office was to unveil his “Roadmap to Excellence” anchored on the TAPE Agenda. TAPE stands for Transparency, Accountability and Performance Excellence.
One of the key gains of the TAPE agenda is the entrenchment of global best practices within the NNPC leading to a transformation of administrative and technical processes.
In September 2021, Kyari presented to Nigerians for the first time in 44 years, an audited report of the finances of the NNPC for 2020. The bonus was the fact that the company posted a profit of N287 billion to bring to an end decades of losses suffered by the organisation.
Read Also: NNPCL remits N4.5tri into Federation Account in 10 months
Beyond running the company on sound and globally recognised and acclaimed management principles, Kyari has repositioned NNPCL as one of the leading oil companies in the world.
He has used his position as helmsman of the company to aid in the tackling of key challenges confronting the Nigerian economy.
One of these is the vexed question of crude oil theft, which has challenged successive governments in Nigeria since the country’s return to representative democracy in 1999. It is on record that the NNPC under Kyari’s leadership designed the “Crude Theft Monitoring Application”, an application, which has options for reporting incidents, with prompt follow-up and responses, and another for crude sales documents validation.
Before the launch of the application, Kyari had taken leading officials to Niger Delta creeks to tackle the menace of oil theft.
His effort paid off as a four-kilometre illegal oil connection line from the Forcados Terminal into the sea where for nine years criminals had been siphoning Nigeria’s oil, was discovered.
Success achieved in this regard proved pivotal as Fourth Quarter figures released by the NNPC Ltd showed a spike in the country’s oil production level, which rose to 1.6 million barrels from the erstwhile figure of 1.2 million, a development that helped Nigeria regain its position as Africa’s largest producer ahead of Algeria (1.021mb/d) and Angola (1.088 mb/d.
NNPCL was able to resolve years-long disputes with its business partners, especially the International Oil Companies (IOCs).
As part of its determination to boost the country’s production of crude and unlock investments in the Deepwater space, the Kyari-led NNPC Ltd signed different Production Sharing Contracts (PSCs) and other agreements including Dispute Settlement Agreements and Escrow Agreements that would produce about 10 billion barrels of crude and over $500 billion in revenue.
NNPCL has also been able to pay Nigeria’s Joint Cash Call arrears to the IOCs to the tune of $5 billion through the introduction of the Alternative Funding Approach (AFA), which has replaced the former cash call payment system.
NNPCL has signed memoranda of association (MoUs) with countries like Ghana, Gambia, Guinea, and Guinea Bissau, as part of the 5,600 kilometres Nigeria-Morocco Gas Pipeline project traversing these countries and seven others including Togo, Benin, Liberia, Cote d’ Ivoire, Mauritania and Senegal. The project when completed will supply about three billion standard cubic feet of gas per day (3bscf/d) from Nigeria to Morocco and then to Europe.
In 2022, the NNPC Ltd secured a $1.4 billion external project finance agreement for hydrocarbon projects in the Niger Delta. This is in addition to acquiring the OVH Energy Marketing (OVHEM), owner and operator of Oando downstream assets.
These achievements could not have been possible without the clear roadmap put in place at the NNPC.
It is a no-brainer that no organisation no matter how desperate it is for partnership will do business with an opaque organisation of the kind described by Sanusi. That old NNPC has been buried with the coming of the Kyari-led management.
In its place is an organisation driven by a determination to outperform its local and international competitors through entrenching world-class standards for qualitative service delivery.
- Badmos, a public commentator, writes from Abuja.