NNPC: Frequent changes, missing oil revenues
The Nigeria National Petroleum Corporation [NNPC] has since its inception in the 1970s been the government’s major cash cow and a huge presence in the Nigerian economy, society and polity. Every administration in Nigeria has watched NNPC closely.
In addition to major projects and huge contributions to government coffers, the national oil company in the last two decades has been enmeshed in alleged financial scandals stemming from allegations of unremitted funds to missing oil and gas revenues. There have been multiple scandals in the oil sector since 1999 that cost Nigeria billions of dollars. One of the most comprehensive reports of waste and mismanagement of cash in Nigeria’s oil industry was revealed in September 2013.
Then Governor of the Central Bank, now Emir of Kano Muhammad Sanusi II, wrote to President Goodluck Jonathan saying NNPC failed to remit $49.8 billion to the federation account. He later reduced the amount to N10.8bn on December 18, 2013. The government then commissioned audit firm PriceWaterhouse Coopers (PwC) to undertake an investigation of the fund. NNPC later claimed that PwC absolved it of culpability over the allegation of nonremittance of $20bn, saying that what was due for remittance to the Federation Account was $1.48bn.
The revelations of unaccounted funds by the NNPC didn’t end there. Nigeria Extractive Industries Transparency Initiative, (NEITI) in its 2015 audit report found that NNPC failed to remit $16.8billion to the Federation Account in 16 years it earned as dividend for its 49 per cent stake in Nigeria Liquefied Natural Gas, NLNG. According to the transparency watchdog, the payments were those made by NLNG to NNPC for the period 2000 to 2015. “While NNPC has always confirmed receipt of the payments, it has never shown evidence of remittance to either the Federal Government or to the Federation Account,” NEITI found.
Elsewhere, NNPC’s inefficiency, according to experts, have been compounded by frequent and unceremonious changes in its management. Since 2000 the corporation has witnessed the replacement of 5 Group Managing Directors (GMDs), a situation that undermined the corporation’s policy focus and direction and by extension that of the country’s oil and gas industry. In the last decade industry projects have been perpetually delayed, side-lined or described as uneconomic as a result of uncertainty that comes with the frequent changes in NNPC management.
President Obasanjo appointed Jackson GaiusObaseki as NNPC’s GMD in 1999 and replaced him with Mr. Funso Kupolokun in 2003. President Umaru Musa Yar’adua inherited Kupolokun in 2007 and after keeping him for about four more months, he was replaced with Engineer Abubakar Lawal Yar’adua. Yar’adua was replaced in January 2009 by Dr. Mohammed Sanusi Barkindo. He reigned for only 15 months. In April 2010 the presidency announced his replacement with Malam Shehu Ladan. A little over one month after the presidency announced his replacement with Mr. Austen Oniwon. Mr. Andrew Yakubu replaced Oniwon and held sway between 2012 and 2014 before he was eased out. Dr Joseph Thlama Dawha was appointed for a short period in the Goodluck administration in 2014/2015.
President Muhammadu Buhari appointed Dr. Emmanuel Ibe Kachikwu GMD of the NNPC in 2015. He was later elevated as minister state for petroleum resources, paving way for the appointment of the current GMD, Maikanti Kachalla Baru in 2006.