Nigerian National Petroleum Corporation (NNPC) The general manager of the group, Mr. Mele Kyari, took office with the promise of transparency in enthronement. Will talk? JOHN OFIKHENUA examines the challenges of the money spinning agency.
Mele Kyari, general manager of the group (GMD) of the National Petroleum Corporation of Nigeria (NNPC), made a promise that others before him failed to maintain. He promised to end the opacity that has permeated the entity since its inception. He promised to guarantee accountability and transparency in the company after taking office on 8 July. In identifying the position of people in a social contract, he said: “It is a promise that we will be responsible to the citizens”. Citizens will have access to what we are doing. ”
Kyari has promised not to allow his interest to cancel the national interest in the management of the NNPC. He warned his family members to protect themselves from accepting any gift on his behalf. At one time, it seemed very pious, since he said that one day he would face his creator to account for the administration of the company. His words: “I will introduce myself to my creator and I will tell him that I did well”.
However, these words have become the cliché that the heads of the NNPC recite during the assembly of the saddle. What is lacking is walking the subject. Analysts say the Nigerians will take the war on corruption seriously if Kyari announces the daily volume of consumption of Premium Motor Spirit (PMS) in the country. This was the question that The Nation asked the General Director of the Group, Public Affairs Division of the Group, Ndu Ughamadu in a text message that has not yet received the answer after several phone calls. Is this the no-go area of the company? The last time, The Nation raised the issue; The NNPC spokesman told the Authority for the Regulation of Petroleum Products (PPPRA) which also avoided the demand. In other words, until the NNPC reaches the value to indicate the volume of gas consumed daily in the country, analysts would continue to describe their measure of corruption as an appearance of what is.
What casts the shadow of doubt on the fight against corruption in the downstream sector is the product bridge. The agency, which the federal government has with this responsibility, still has to respect the concept of anti-corruption. Last week, marketing experts accused the Petroleum Equalization Fund (PEF) of changing traders with the bridge payment. According to him, what the fund paid was far from the rights of marketing professionals. The independent association of oil traders of Nigeria (IPMAN) has repeatedly warned about the main practices that still characterize the lifting of products from private deposits. The association’s national vice president, Alhaji Abubakar Maigandi, has always complained that private depots sell gasoline that is normally N133.28 per liter at a price as high as N141 per liter, which makes it difficult to access the marketing product. For fear of victimization, marketing experts always develop cold feet when store owners challenge them to present their tickets as proof of professional negligence.
One of Kyari’s priorities is getting the four national refineries to work at optimum capacity before May 2023. His words: “I will follow it up to make sure that before the life of this administration expires, before Baba’s (President Muhammadu) tenure ends in 2023, we will deliver on the four refineries.”
As good as the intention is, those familiar with the conditions of the refineries describe them as tattered rags that tear apart from the left-hand side while they are sown from the right-hand side. Therefore, the corporation has resolved that the Federal Government would not provide fund for its rehabilitation again. Kyari’s predecessor, Maikanti Baru, said in his valedictory ceremony that the corporation worked tirelessly on securing third-party financing for the rehabilitation of the four refineries. What he refused to reveal was whether the third party financing is now readily available and the investors’ commitment to the rehabilitation project. He added that the NNPC also completed pre-visibility studies on new refineries and further fine-tuned the Eni/ Nigeria Agip Oil Company (NAOC) and Oando on the planned 150kb/d Greenfield Refineries in Bayelsa State. But how attractive will the business of revamping the facilities be to private investors? How fast will the construction of the refineries be to meet the timeline that Kyari has set for Nigeria to exit fuel importation and become an exporter of petrol? The accomplishment will certainly thrill Nigerians since it will be tantamount to sacrificing profit for national interest and charity. This is so because most investors still see government’s refusal to deregulate the petrol price as a major snag impeding them from activating their licenses for modular refineries.
Of the several licences that the Department of Petroleum Resources (DPR) has awarded to investors, how many are now constructing their refineries? Exactly what is their barrier? Kyari’s promise of product sufficiency is anchored on the Dangote Group that which is expected to debut next year. The total capacity of the refinery is 650,000 barrel per day, while the four national refineries have a combined capacity of 445,000 barrel per day. What volume of production is Kyari expecting from the licensees of modular refineries? Is the government ready to deregulate the pump price of petrol to jump-start private sector refining?
Yet, there is no hope that Nigerians would allow the government to attempt any deregulation of the product since present N145/litre has culminated in the general increase of everything in the market. Only on Monday, the Nigerian Labour Congress (NLC), Comrade Ayuba Wabba warned that “On our part, anything that will add cost to the consumers at this point, certainly, as a consumer and somebody that represents a large constituency, we will not be able to bear the cost.”
Everything about Nigerian price mechanism is tied to the pump price of petroleum products to the extent that even when the pump prices dip, prices of other commodities hardly respond to the change proportionally. On this note, it is evident that the citizenry is prepared to die on the cross of a pump price. Therefore, exactly what measure will Kyari use to incentivise the investors that are expected revamp the old refineries and those building the new ones?
From the Offshore Processing Agreement (OPA), the corporation under the management of the former GMD, Dr Ibe Kachikwu, adopted the Direct Sale and Direct Purchase (DSDP) for the sale and purchase of crude oil and refined products. To a reasonable extent, the implementation of the scheme has recorded some visible level of transparency in its bid opening exercises. The NNPC has to its credit the invitation of some anti-graft agencies, such as the Nigerian Extractive Industries Transparency Initiative (NEITI) Bureau of Public Procurement (BPP), Economic and Financial Crimes Commission (EFCC) and other Civil Society Organisations to witness the exercise.
As transparent as this round of competitions appeared, critics have always made holes in the real owners of buyers of crude oil. Experts still believe that the company must make every effort to enact or modify the Company and the Allied Affairs Act (CAMA) to reveal to the actual obligatory owners those involved in the agreement on crude oil and refined products. According to the critics, however transparent the offer of the offers may seem, its organizers could be those who collect oil and supply refined products to society. In other words, the administration of NNPCs cannot be exempted from benefiting from treatment by delegation.
Another question that also requires an answer is the insistence on the oil of the Kolmani 2 river in the states of Bauchi and Gombe. Although the company uses the exploration of the border basins as an excuse for its insistence on the discovery of oil in the Chad basin, it is obvious that the emphasis is on the search for the river Kolmani 2. What gives credibility to this presentation is the The fact that the impression that Baru gave the beginning of the oil search on 2 February 2019 was that the exploration would last between 60 and 70 days. However, the last thing he said was that “We have also been active in the border basins while the exploration activities have progressed from the acquisition, processing and interpretation of seismic data to the drilling of the Kolmani river -2 in the Benue channel. The results on SNEPCO’s Kolmani -1 river have been confirmed and the well reveals much more interesting information as it approaches the total depth of 14,250 feet. “In a spirit of transparency and responsibility, the company would excite many Nigerians with the exact disclosure of what they spent on research and additional expenses incurred since the project was extended from 70 days to over 140 days.
The cheapest way to write your name in gold is that Kyari directs the NNPC under his watch to make it really transparent.