June 22, 2024

Why President Buhari must not hand over oil sector to a successor in present condition


Orebe Femi (Op-ed)

The Nigerian lack of values is sinking the nation’s only bread basket. The oil majors are leaving because we no longer run businesses in the sector but installing racketeers like gangsters in hell . Even those responsible for bad fuel and long queues at fuel stations are walking the high places of power like lords.

As for the NNPC, perhaps what is needed now is a comprehensive overhaul of its personnel and systems. Needless to state that the economy would sooner than later be brought to its knees if nothing is done to arrest the situation” –

The Nation Editorial comment, Monday March 21, 2022.“The speed with which international oil companies and other investors are withdrawing investments in hydrocarbon exploitation from Nigeria has contributed significantly to Nigeria’s inability to meet OPEC quota.

We are not able to get the needed investments to develop the sector and that affected us” – Horatius Egua, Media aide to Nigeria’s Minister of state for oil, Timipre Sylva,Expectations were that the Petroleum Act would sanitise the Nigerian oil sector, make the NNPC a Nigerian, not a sectional organisation, and enable it properly perform its purpose as Nigeria’s food basket accounting, as it does, for about 10 per cent of its gross domestic product (GDP) and petroleum exports revenue representing around 86 per cent of the country’s total exports revenue.

President Muhammadu Buhari has about 15 months to exit office after a two- term tenure during which the world, not just Nigeria, witnessed some truly earthshaking events, among them, Covid-19, the global pandemic which accounted for millions in deaths, still counting, and the ongoing Russian invasion of Ukraine with all its likely consequences for food security in Africa and which, if care is not taken, could snowball into World War 111.

Besides the human debacle, world economies have suffered terribly especially in the third world countries.like ours, where economies have been set back decades, if not, irreparably.

Unfortunately for Nigeria, it is in these terrible times we are beginning to reap the consequences of the inefficiency, the cronyism and corruption, that have long bedeviled the Nigerian oil sector.

Nigeria’s Brent sells at around $120 per barrel today but rather than benefit Nigerians, the current high oil prices will surely leave us much worse since the cost of imported fuel has hit the roofs.

The fuel subsidy for which nearly N4 trillion had to be budgeted, unprepared, rather than remove it, now has a strong possibility of reaching N5 trillion, if not more.A good reading of goings on in the oil industry in Nigeria today suggests that for the good works President Buhari has been able to do for Nigeria not to be tainted by the inefficiency and gargantuan corruption in the industry, and also with an eye on his legacy, I think the time has come for him to relieve himself from the post of oil minister.

He has done so much in very difficult circumstances, that he must not permit himself to be held vicariously accountable for the sins of others. Even though as leader he would like to take responsibility for everything done during his administration, he must give those of us who believe in his personal integrity and incorruptibility that window of opportunity to still be able to hold on to them even after he had left office, much as they will not wash him clean of charges of nepotism.

He should appoint another substantive Oil minister immediately, or risk being tainted by the acts of others, especially in a very corrupt sector of the Nigerian economy as was recently exposed in an Auditor- General’s report; now before a committee of the National Assembly.

It will be strange if the President is not amazed at the rapidity with which divestment is happening in the Nigerian Oil industry today.

Unlike our Chinese lenders who are alleged to be having a rethink about lending to Nigeria because of insecurity, those divesting from the oil sector are not citing insecurity, but corruption accentuated by oil stealing.Only this past week, it was reported that oil stealing, which Richard Laing, Chairman/Managing Director of ExxonMobil, described as not just oil theft but ‘organised criminality with sophisticated operation’, dealt with Nigeria to the tune of $3.27b in 14 months.

Even local investors in the sector, like Tony Elumelu, who you would not accuse of being a flippant speaker, have raised issues over the amount of stealing going on in the industry.He has asked, for instance, about “how the country can be losing over 95% of its oil production to thieves”, citing the case of “the Bonny Terminal that should be receiving over 200k barrels of crude oil daily, but instead, receives less than 3,000 barrels, leading the operator, Shell, to declare a force majeure?”

Also, in a report titled “Reining in the Collapse of the Nigerian Oil industry”, published by the Africa Oil + Gas report, another stakeholder, Austin Avuru, founding MD/CEO of Seplat Energy, and Executive Chairman of AA Holdings, wrote that Nigeria’s oil production has reached a critical state as “some oil production wells don’t get to see 80% of their production making it to the terminals due to oil theft”.

He recommended that the regulators should immediately set up a “war room” strategy to deal with the emergency.What then is NNPC doing?I think the right question to ask should be whether Nigeria has round pegs in round holes, manning this very critical sector of its economy. The other day it was the case of importing adulterated oil for which the Buhari government is yet to hold anyone accountable.

While many have belly ached about how a section of the country has a disproportionate control of the NNPC, I have taken the far less worrying position that Nigerians cannot do anything about President Buhari’s appointments.All we should ask of him, therefore, is to put “round pegs in round holes”. Happily, the North is not lacking in capable hands in any discipline, whatever.

Only that one is reminded of the First Lady saying in a BBC interview that some people were in their houses when they were being called upon to come and take up appointments in the Buhari government (Aisha Buhari in a BBC interview on 14 October, 2016, or thereabouts).

Things might still have been tolerable, if the above were the only problems with the NNPC as the President could merely have directed our obviously overstretched security forces to re-double their efforts. Unfortunately, the humongous corruption bedeviling the sector is indescribable, and by no means, amenable to quick fix .

For a good capture of that, I shall have to quote, at some length from The Nation’s Editorial opinion of Monday, 21 March, 2022, titled: A minister’s strange alibi”. It refers to the scathing findings by the Auditor-General of the Federation (AuGF) as contained in the Federal Government’s Consolidated Financial Statements for the year ended December 31, 2019 which was submitted to the Clerk of the National Assembly on August 18, 2021.

It reads as follows:“Not only is the report a summary of how things came to be, the massive pilfering is more accurately, the story of the benumbing paradox of an oil corporation that is everything that an accountable business entity should not even pretend to be.

Among the key findings of the AuGF report are that the defunct Nigerian National Petroleum Corporation (NNPC) now NNPC Limited, could not account for about 107,239,436 barrels of crude oil lifted for domestic consumption in 2019; that about 22,929.84 litres of PMS worth N7.06 billion claimed to have been pumped to the two depots (Ibadan-Ilorin and Aba-Enugu) between June and July 2019 were not received by them; and that while the NNPC records showed that N1,272,606,864,000 was transferred by the corporation to the federation account, the amount recorded by the Accountant-General of the Federation was N608,710,292,773.44 – a whopping discrepancy of N663,896,567,227.58”.”

The Group Managing Director of the NNPC, the report averred, should be asked to explain the discrepancy between the two figures and remit the balance of N663,896,567,227.58 to the Federation Account or face sanction.There was also the case of a certain N519,922,433,918.46 said to have been transferred to the Federation Account by the NNPC based on transfer mandates.

Summary: NNPC should provide “reconciliation statement for the difference of N88,787,862,853.96 between AGF’s figure of N608,710,296,772.42 and NNPC’s figure per transfer mandate of N519,922,433,918.463 .Those were the findings for 2019.“Meanwhile, there are no indications that anything has changed in any real sense.

If anything, the facts so presented, far beyond the typical book-keepers’ nightmare, represent the jumbled paper trail of an organisation not only steeped in crime, but one in which criminal behaviour is enabled by powerful figures at the highest levels of government.

It explains why not a few Nigerians sometimes wonder if anything could be salvaged by the mere name-change being presented as transition from the old NNPC to NNPC Limited.

It is at the heart of why the current high oil prices, rather than benefit the country, will in fact leave her much worse – in the environment of low output and at a time the cost of imported fuel has hit the roofs…”.In conclusion, I do not think that President Buhari would, personally, like to bequeath this Augean stable to his successor.

Femi Orebe is a public affairs commentator and newspaper columnist regularly featured on major news platforms in Nigeria. He is a former Chairman, Board of Nigerite Ltd, Member of Board, Fed Med Centre, Bida.


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