Cosmetic changes in NNPC, PIB is the answer

on   /   in Broken Links 12:19 am   /   Comments

The changes at the NNPC last week Tuesday can best be described as cosmetic. Sacking the executive management of NNPC and replacing them with the same old stock of management amounts to scratching the surface of the monumental and colossal fraud in the corporation.

President Goodluck Jonathan on Tuesday approved the sack of the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Austen Oniwon, and the executive directors of the NNPC. He also approved the appointment of Andrew Yakubu as the new helmsman of the corporation.

The change of the NNPC management team was disclosed as usual in a press statement signed by the Special Adviser to the President on Media and Publicity, Reuben Abati. The president also approved the appointment of Victor Briggs as the new Managing Director of the Nigerian Petroleum Development Company (NPDC).

According to the statement, the decision to restructure the NNPC was in a bid to strengthen the on-going reforms and transformation of Nigeria’s Petroleum sector.

Part of the statement reads: “In furtherance of efforts to achieve greater transparency and accountability in government, President Goodluck Ebele Jonathan has approved the re-composition of the executive management team of the Nigerian National Petroleum Corporation (NNPC) as follows: Engineer Andrew Yakubu, Group Managing Director; Mr. Bernard O.N. Otti, Group Executive Director (Finance and Accounts); Engineer Abiye Membere, Group Executive Director (Exploration and Production); Dr. Peter S. Nmadu, Group Executive Director (Corporate Services); Engineer Anthony Ogbuigwe, Group Executive Director (Refineries & Petrochemicals); Dr. Attahir B. Yusuf, Group Executive Director (Commercial & Investments);  Dr. David Ige, Group Executive Director (Gas & Power)”

Petroleum Minister, Diezani Alison-Maduekwe

President Jonathan commended the outgoing directors for their service to the nation and urged the new management team to be fully committed to rapidly implementing the critical interventions needed to positively transform Nigeria’s petroleum industry.

A corporation which executives are due for retirement and have been asked to leave can not serve as part of the on going reform in the industry. The removal of the executive management of the NNPC can not qualify as restructuring of the organisation as the President wants us to believe.

NNPC, according to KPMG report, has severely defrauded Nigeria in subsidy claims. Auditors found that between 2007 and 2009 alone, NNPC over-deducted funds in subsidy claims to the tune of N28.5 billion. It has not been able to account for the sum ever since. The over-deduction from its remittance to the federation account for 2010 and 2011, believed to be in several billions of naira, is not captured in the report.

The Federal Government, through the Federal Ministry of Finance, hired KPMG and another Nigerian auditing firm, S.S. Afemikhe & Co., in July 2010, to look into the books of the corporation following allegations of “wrongful deductions at source by the NNPC to fund its operations” by the 36 state governors.

There were also concerns at the time that “the procedures for managing and reporting the country’s crude oil and gas revenues are opaque and characterized by gaps, overlaps and inconsistencies in the role of key parties responsible for the assessment, collection and reporting on these revenue streams.”

Officials of the Petroleum Ministry and  NNPC, developed cold feet after the auditors were sent in, and indeed tried hard to frustrate the representatives of the two audit firms by failing to supply evaluation criteria for commercial bids submitted in respect of petroleum products importation. Instead of seriously addressing these problems, government has always fired the management of the corporation without any meaningful result. NNPC has had about five GMDs in the last five years, an average of one GMD per year.

After only May 18, 2010, 41 days in office, Malam Shehu Ladan was removed as GMD by President Goodluck Jonathan. He was replaced by then NNPC’s Group Executive Director, Refineries and Petrochemicals, Mr. Austin Oniwon, who himself was retired Tuesday last week.

Jonathan was the one who ordered a comprehensive audit of the NNPC. No reason was given then for Ladan’s removal. But after the subsidy probe revelations, Nigerians now know why NNPC management do not last a while in office. Jonathan had at the time directed Olusegun Aganga, then Finance Minister, to engage the services of “a world class auditing firm to carry out an audit of the NNPC.”

The audit report of KPMG has long been submitted. It accused the corporation of under-hand dealing and massive corruption. So far, nothing serious has come out of it. If the removal of Oniwon and his team, just like his predecessors, is meant to placate Nigerians that something is being done by this government about the KPMG report and the subsidy probe findings, the appointment of operators from within the NNPC who have been part and parcel of the deals going on in the corporation is to say the least ill advised. Nobody is interested in the sack.

What informed Nigerians are asking this government to do is to ensure the passage of the Petroleum Industry Bill. In the bill, NNPC will be just any other operator in the system. It will be stripped of its regulatory powers. For goodness sake, NNPC can not be an operator and the same time a regulator. No matter the reforms going on in the petroleum industry, no serious investor will come into the sector to compete with its regulator. There must be a level playing field.

Government must remove its invincible finger encouraging massive corruption in NNPC. This government should please get serious about its transformation agenda. The corruption in NNPC will not go away unless it is privatised or run as a profit making entity without government involvement.

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