By Onome Broderick 

From inception, Nigerian National  Petroleum Corporation, NNPC, aspired to be an oil and gas company of global repute. More than four decades after its establishment, the company has remained on the track of excellence as it regulates the oil and gas business in Africa’s largest economy.

While other areas of its vision have been accorded high priority, leading to its success story 43 years after it was established, much can’t be said of accountability and transparency.

 And for an entity of global repute and at the same time, the regulator of Nigeria’s major foreign exchange earner, the place of probity can’t be over emphasised.

Until recently, the organisation was known not to have subjected its records to the public, a situation that is contrary to global standards.

The situation was such that it impacted negatively on NNPC’s image and productivity. For instance, its relationship with top players on the world scene was limited owing to the absence of clarity in its operational structure.

It was such an abnormal situation given that competitors like Saudi Arabia, Iraq and Iran had created a system that allowed the public to monitor the operations of their national oil companies. 

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Transparency

This availed them the opportunities to make inputs into the growth of the organisations.

Given that NNPC hadn’t been known for being pro-transparency, Nigeria wasn’t really in the reckoning each time transparency was discussed on the global oil stage.

The negative effects on the nation’s oil and gas sector were worrisome to industry players. 

However, such a situation belonged to the past as the current Managing Director, Mallam Mele Kyari, has left no one in doubt about his commitment to accountability.

Upon assumption of office in 2019, he specifically assured that accountability would be given a high premium. He added that NNPC’s businesses and governance code would be in line with the expectations of Nigerians. This new practice has ensured operational discipline in not only the NNPC but also its subsidiaries.

Interestingly, Kyari’s pledge wasn’t lip service the way it had been in the past as Nigerians now have deep knowledge of NNPC’s books.

The nation now knows its earnings from crude oil and other associated businesses. To his credit, whatever comes in and goes out is in the public domain, thereby boosting not only investors’ confidence but also public trust.

Instructively, the gains associated with such a practice are enormous. Industry players believe it could increase Nigeria’s revenue-generating drive, especially at a time resources are highly needed for infrastructural development.

Audited account

On June 12, the NNPC made history as it released its audited annual reports and financial statements for the year ended December 31, 2018.

The move resulted in the records of 20 of its subsidiaries being made public, thereby showing that Kyari had made real his promise upon assumption of office.

An excited Kyari said actions would be expedited on the corporation’s 2019 audited financial statement.

This was a development that attracted commendations from industry watchers and top government executives.

One of them was the Executive Secretary, Nigeria Extractive Industries Transparency Initiative (NEITI), Mr. Waziri Adio, who described it as a healthy development for the nation’s local and global reputation.

 ”Having such disclosures is good for transparency and accountability. I congratulate Mele Kyari and his team and urge them to make this a regular practice and in open data format,” he said.

Similarly, Akwa Ibom State governor, Mr. UdomEmmanuel, while welcoming NNPC board members to the Government House, Uyo, said his membership of the National Economic Council had exposed him to the activities in the oil and gas industry.

He added that the Council had noted the positive impact the present management and board of NNPC are making in the economy.

Udom said the adherence to transparency and accountability in the petroleum sector is being acknowledged.

As a result of the probity engendered by Kyari, businesses are now conducted in a transparent and accountable manner. One of the measures supporting the culture of transparency is the introduction of Artificial Intelligence (AI).

It was introduced to boost the accounting processes of NNPC corporate headquarters, subsidiaries, companies and Corporate Services Units (CSUs).

It was such an abnormal situation given that competitors like Saudi Arabia, Iraq and Iran had created a system that allowed the public to monitor the operations of their national oil companies

Innovations

The innovations in NNPC are not going unnoticed as the Extractive Industries Transparency Initiative, EITI, made the corporation one of its partners. This was mainly as a result of the transparency introduced by Kyari-led management.

Consequently, the company joined a group of 65 other extractives companies, state-owned enterprises, commodity traders, financial institutions and industry partners committed to observing EITI’s guidelines. 

Note that without probity in its governance code, EITI would not admit an organization.

EITI requires that NNPC publicly declares support for the EITI principles. This includes promoting transparency throughout the extractive industries, helping in public debate and provision of opportunities for sustainable development.

It also expects NNPC to publicly disclose taxes and payments. It wants the corporation to publicly disclose beneficial owners and take steps to identify the beneficial owners of direct business partners, including Joint Ventures and contractors.

NNPC is also required by EITI to engage in rigorous procurement processes, including due diligence with respect to partners and vendors.

EITI further expects the corporation to deliver natural resources in a manner that benefits societies and ensure that company processes are appropriate to deliver the data required for high standards of accountability.

New rules

Other areas, EITI expects transparency from the NNPC include revenue generation and payment of funds to government, contracts governing petroleum exploration and production and financial statements.

Given the operational modus introduced by Kyari, the guidelines are being observed and implemented by the NNPC.

NNPC’s choice as an EITI partner company aligns strongly with its corporate vision and principles of Transparency, Accountability and Performance Excellence (TAPE), which Kyari’s team has championed since 2019.

Recall that EITI Board Chairperson, Rt Hon. Helen Clark, while welcoming NNPC to the fold, said the corporation’s role in Nigeria’s economy would be deepened by its membership of EITI.

 He said the new status would afford NNPC the opportunity to deepen its commitment to transparency, adding that it would ensure that Nigerians benefit from hydrocarbon resources.

Transparency

The Minister of Finance, Budget and National Planning, and a former EITI Board member, Mrs. Zainab Ahmed, also applauded the probity in NNPC, saying it has increased revenue accruable to government from the activities of the corporation.

This goes to show that the corporation has achieved a lot through technology deployment, dispute resolution, transparency, and diversification.

As a renowned technocrat with vast wide knowledge of the petroleum industry, Kyari is getting unprecedented results at a time the global oil industry faces volatility.

This perhaps made analysts state that the current management has given NNPC a breath of fresh air.

The excitement among industry players can’t be over emphasised given their belief that NNPC, as the beacon of the oil and gas sector, needs to be an institution that prides itself as the epitome of accountability.

To ensure consistency on this part, they want a system that monitors adherence to this new culture of transparency. 

This is also to ensure that the laudable practice is not jettisoned for the old order.

Since the NNPC is acting in accordance with President Muhammadu Buhari’s stance on transparency, it is advisable for other agencies of government to toe the same path.

Doing so would ensure the needed service delivery in all Ministries, Departments and Agencies, MDAs.

*Broderick, an oil industry top player, writes from Warri