A director of the Nigerian National
Petroleum Corporation has said that operatives of the Department of
State Services have interrogated him 11 different times since May over
crude oil swap deals with traders.
“The DSS has been harassing some of us,”
the Group Executive Director, Refining and Petrochemicals, NNPC, Mr.
Ian Udoh, was quoted as telling Reuters.
The investigation by the DSS and
anti-graft agencies involves crude oil swap deals and offshore
processing agreements in which the corporation gives certain volume of
crude oil to traders in exchange for refined products.
Instead
of ensuring that crude oil was made available to the nation’s four
refineries for domestic consumption, the immediate past Minister of
Petroleum Resources, Mrs. Diezani Alison-Madueke, in conjunction with
the Pipelines and Products Marketing Company, increased the crude oil
swaps and OPAs from 270,000 barrels per day to 445,000 bpd, thus
starving the refineries of crude oil.
President Muhammadu Buhari has
instructed the NNPC to review the crude for oil products swap contracts
and offshore processing agreements with trading companies because of the
belief that the deals might have cost the country millions of dollars
in lost revenue and refined product supply.
“There is a siege mentality here at the moment,” Udoh, an NNPC veteran of 36 years, was quoted as saying.
He said Buhari’s initiative had given
fresh legs to media coverage of the accounting holes worth over $20bn
identified by two separate investigations, and that the public pressure
was dominating management meetings.
The DSS operatives were said to be
closely monitoring the headquarters of the corporation in Abuja, with
soldiers guarding the building from raised platforms, while visitors
were required to go through four separate security checks.
However, the NNPC has described the story as false.
The Group General Manager, Group Public
Affairs Division, NNPC, Mr. Ohi Alegbe, wrote in a text message to one
of our correspondents, “That the report is from a foreign news agency
doesn’t make it credible, please.”
Buhari and his party, the All
Progressives Congress, had promised sweeping reforms of the oil and gas
industry, with the NNPC at the core, during the campaigns leading up to
the March 28 presidential election.
To kick start the overhaul of the
industry, the President had on June 26 dissolved the board of the NNPC,
with more sackings expected.
The President’s advisers have recommended a total overhaul of Africa’s biggest oil industry
The oil sector provides the government
with roughly 70 per cent of its revenue, and the slump in crude oil
prices since last year has hit the economy hard.
Under the constitution, the NNPC is
supposed to hand over its oil revenue to the Federal Government, which
then pays back what the firm needs based on a budget approved by the
National Assembly.
But in a legal contradiction that has
never been resolved, the Act establishing the state oil company allows
it to cover costs before remitting funds to the government; in effect,
enabling it to do what it wants with the cash.
The former Central Bank of Nigeria
Governor, Lamido Sanusi, had in 2013 alleged that the NNPC failed to pay
$20bn in revenue to government accounts between January 2012 and July
2013.
But the company argued that the money
was not lost at all. A subsequent audit by the PwC found that some funds
were unaccounted for, bemoaning a lack of cooperation and issued an
audit with extensive caveats.
Only last month, the National Economic
Council said the NNPC had earned N8.1tn between 2012 and the end of May
2015, but paid only N4.3tn to the Federal Government.
The council is chaired by the vice president and includes all state governors and the central bank governor.
At the 7th Wole Soyinka Centre Media
Lecture Series held in Abuja on Monday, the Kaduna State Governor,
Mallam Nasir el-Rufai, lambasted the national oil firm for being run
like a parallel government, adding that he was hopeful that the Buhari
administration would “kill” the corporation.
“If you don’t kill the NNPC, you will kill Nigeria,” el-Rufai had said.
According to him, the oil firm is
riddled with corruption and until it is destroyed completely and rebuilt
from the scratch, there will be no headway for Nigeria.
“The fact that the NNPC has effectively
become impossible to audit suits a lot of people,” said Antony Goldman
of Nigeria-focused PM Consulting.
He said it was conceivable that not even insiders knew the real value of the various deals agreed on behalf of the company.
The greatest indictment of the NNPC may
be that Nigeria’s four refineries have never reached full production,
due to poor maintenance, leaving Africa’s biggest crude producer to rely
on expensive imported fuel for 80 per cent of its energy needs.
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