Why NNPC board was dissolved

Only a few undiscerning Nigerians and foreigners
would have been surprised by the dissolution,yesterday,of the board of the Nigerian National Petroleum Corporation (NNPC)
by President Muhammadu Buhari.
For as long as anyone can remember,the organization has been stumbling from one
corruption scandal to the other,the latest being the 2013 allegation by the immediate past Governor of the Central bank of Nigeria (CBN)
and now the Emir of Kano,Alhaji Muhammadu Lamido Sasusi ,that the NNPC failed to remit up
to $20 billion to the federation account.
The allegation was to cost him his job at the apex bank even after forensic auditors appointed by the immediate past administration said only
$1.4billion should be remitted by the firm.
The NNPC was established on April 1, 1977 following the merger of the then Nigerian
National Oil Corporation and the Federal Ministry of Mines and Steel with sole responsibility for
upstream and downstream developments.
It is also charged with regulating and supervising the oil industry on behalf of the Federal
Government.
Eleven years after the birth of the NNPC it was commercialised into 11 strategic business
units, covering the entire spectrum of oil industry
operations: exploration and production, gas
development, refining, distribution,
petrochemicals, engineering, and commercial
investments.
It manages the joint ventures between the federal government and such foreign multinational corporations like Royal Dutch Shell, Agip, ExxonMobil, Chevron, and Texaco (now
merged with Chevron).
Through collaboration with these companies, the
Nigerian government conducts petroleum
exploration and production.
The oil companies appropriate portions of their
revenue which is nearly 60% of the revenue
generated by the oil industry in this manner,to the
government.
With oil as Nigeria’s largest revenue earner,cash
flow from the NNPC accounts for 76% of federal
government revenue and 40% of the entire
country’s GDP.
But in reality,the corporation and many of its
subsidiaries have failed in living up to their
responsibilities.
Its refineries hardly work with the result that
Nigeria relies more on imported fuel .
Thus, scarce foreign exchange is wasted on
importing fuel while billions of naira is also paid
as ‘subsidy’ to importers.
This mode of business has since been found to
be a huge racket on the nation.
Several of such fuel importers are currently
standing trial for defrauding the country and
Nigerians are not likely to forget in a hurry their
recent harrowing experience when the importers
refused to do business.
The ‘missing’ $20billion was a major dent on the
reputation of the last government even if its key
actors refuse to admit it.
Nigerians are angry with the NNPC on account of
its operations and alleged corruption.
Most of the misgivings concern the ‘missing’
$20billion and perveived mismanagement and
abuse of the Petroleum Support Fund otherwise
known as oil subsidy and lack of transparency .
They are clamouring for its removal and probe of
those that managed the fund.
With the then President-elect Muhammadu Buhari
vowing in April to revisit the ‘missing’ money
issue,his anti-corruption reputation,and his vast
knowledge of the oil and gas industry,it was to be
expected that he would have more than a
passing interest in the sector on his assumption
of office.
Observers believe that the NNPC dissolution is
just a prelude to what is to come from Buhari in
the industry.
It should not be a surprise if he orders an
inquisition into what is generally perceived as the
financial indiscretion of successive
administrations in the organization.
He may not even limit the looming probe to the
‘missing’ $20billion.
Nigerians and foreigners are asking questions on
other corruption related allegations against NNPC
like the over $1million bribes which ABB Vetco
Gray, a US company, and its UK subsidiary ABB
Vetco Gray UK Ltd, claimed to have paid to
officials at NNPC subsidiary NAPIMS in exchange
for obtaining confidential bid information and
favourable recommendations from Nigerian
government agencies; the over $6.3million
allegedly paid by another US company Willbros
Group Inc, to officials at the NNPC and its
subsidiary NAPIMS, in return for assistance in
obtaining and retaining contracts for work on the
Eastern Gas Gathering System (EGGS);and the
allegation by the Swiss Non-governmental
advocacy organization – Erklärung von Bern - of
heavy fraud surfaced, placing the NNPC under
suspicion of siphoning off $6.8 billion in crude oil
revenues.
The sacked board headed by the immediate
Petroleum Minister Diezani Alison-Madueke had
as members the Group Managing Director of the
corporation, Dr. Joseph Dawha, Group Executive
Director, Finance & Accounts, Mr. Bernard O.N.
Otti – Group Executive Director, Corporate
Services, Dr. Dan Efebo , Coordinator, Legal
Services/ Secretary to the Corporation, Ikechukwu
Oguine and other five members : Alhaji Abdullahi
Bukar , Mr. Danladi Wadzani, Prof. Olusegun
Okunnu , Mr. Danladi Kifasi and Mr. Steven
Oronsaye.
The NNPC was scheduled to hold its Group
Executive Council meeting on Wednesday but
shifted it to the following day.It never happened
still.
What followed was the summon of the GMD to the Presidency yesterday to be told of the board
dissolution.