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Government is number one problem of NNPC, say stakeholders


NNPC tower

• As They Insist On Wide-Spread Reforms
• Why NNPC May Not Be Unbundled
• Govt Control Killing Corporation’s Independence
• NAPE President
• No Political Will To Make It Work — CPEEL Boss
• Kachikwu’s Picture Disappears From Website

The classic case of impunity in public service, exemplified by the ongoing feud between the Group Managing Director of the Nigeria National Petroleum Corporation (NNPC), Maikanti Baru, and his immediate supervising boss, and Minister of State for Petroleum, Dr. Ibe Kachikwu, has once again brought to the fore, the dire governance concerns bogging down the national oil firm.

It has also further cemented NNPC’s infamous reputation as a money-spinner that is always encumbered by political interferences.

While the latest controversy further confirms the opaque nature of the corporation’s operations, stakeholders are of the view that the ongoing spat is sending out a very dangerous signal to the entire world in view of the critical role the agency plays in managing the country’s oil earnings.


While they canvass wide-spread reforms in the corporation, they are also calling for the immediate restructuring of the outfit, stressing that doing so would herald the dawn of transparency, the same thing the proposed Petroleum Industry Bill (PIB), which has been divided into parts intends to achieve.

According to the President of the National Union of Petroleum and Natural Gas Workers (NUPENG), Igwe Achese, restructuring the NNPC has been a recurring decimal in the last two decades with successive governments giving different interpretations to issues that should not be difficult for the stakeholders to reach a common standpoint.

He said: “I think that Nigerians must ask themselves what type of NNPC they want. We must sit down and take a common stand on this issue. For NUPENG, we have always canvassed that NNPC must return to being a commercial entity. We canvass for an NNPC that should be listed on the Nigerian Stock Exchange (NSE) and pay royalty to the government.”

“The level of control by government on NNPC is still strong and that has not given it the much required independence to work optimally. Unless something is done to that effect, we will continue to have problems,” was how President of Nigeria Association of Petroleum Explorationists (NAPE), Abiodun Adesanya, captured the situation.

Adesanya noted that expected reforms in the NNPC would only become feasible through the PIB, adding that the independence of the agency was critical to the growth of the industry in the country.

“The projected reforms can’t be done without changing the law, which is embedded in the PIB.
Unless the PIB is passed, the plans would not be actualised,” said Adesanya, who further alleged that successive governments have continued to use the agency as means of furthering corruption in the country.

The PIB, which has been in the works since 2008 when it made its debut in the National Assembly, suffered setbacks in the Sixth and Seventh National Assembly.

Although the Senate has passed the first phase of the PIB, which is the Petroleum Industry Governance Bill (PIGB), the House of Representatives is yet to do so.

Be that as it may, industry experts fear that restructuring the NNPC may not be realised in the life of the present government, in view of the administration’s body language.

Like Achese, Co-founder, Sustainability School, Lagos and Associate Lecturer, Centre for Petroleum, Energy Economics and Law (CPEEL), University of Ibadan, Dr. Olufemi Olarewaju, also thinks the Federal Government is not interested in making the corporation as effective as it should be, hence he is urging civil society groups to put government on its toes in order to ensure that it becomes sustainable.

“Right now, the Federal Government is only interested in the next election in 2019.There is no political will to make the corporation work. Politics along ethnic line still dominate most discourse in Nigeria. However, we all have a responsibility to collectively ask those we put in positions of authority how our affairs are being managed,” Olarewaju said.

Speaking on how to free NNPC from political interference, an Abuja-based oil and gas analyst, Ifeanyi Izeze, said that unbundling the outfit can only be done by the passage of the PIGB.

Speaking on the level of corruption in NNPC, Izeze said: “The entire idea of National Petroleum Investment Management Services (NAPIMS) launching an in-house anti-corruption campaign is sheer waste of time and outright deceit. Without mincing words, NAPIMS cannot reform itself because the corruption problem in the organisation is not only endemic, but systemic. The EFCC must go after all the former general managers and directors of NAPIMS.”

Kachikwu, in a letter to Buhari, had lamented the slow growth in the country’s oil and gas sector, blaming it on illegal practices by departments and agencies under his ministry, particularly the NNPC, which is headed by Baru. This, many admit is a reflection of governance concerns that have plagued the agency for lengthy periods.

Executive Director, Civil Society Legislative Advocacy Centre (CISLAC), Auwal Ibrahim Musa (Rafsanjani), admits saying it would be a major set back for the fight against corruption in the country Nigeria, if the allegation against Baru is proven to be true.

He said: “If proven, this will amount to a major set-back in the fight against corruption and the promotion of transparency and accountability in governance, which is, supposedly, the major thrust of this administration.”

He expressed displeasure that such level of abuse of due process went on without restraint under an administration that promised change and a different way of conducting government business.

“The abuse in the award of contracts in sums exceeding the annual budget of the nation represents a scandalous all-time low in a sector that is notorious for monumental corruption,” he added.

Rafsanjani recalled that the passage of the PIGB formed a major campaign promise of the present administration to be delivered; the commitment, which was reiterated in the Federal Government’s Short and Medium Term Priorities to grow Nigeria’s Oil & Gas Industry 2015–2019, fancifully labelled the “7 Big Wins” with a time lapse being the first quarter of 2017.

He called on the Senate to immediately commence work on the outstanding parts of the bill as it is the only way to demonstrate trustworthiness and sustain the confidence of Nigerian people.

“We also call on the House of Representatives as a matter of urgency to consider the Bill. Alternatively, we urge the House of Representatives to adopt the Senate’s version to conclude the legislative process for onward assent by the president.

“We also call on the president to promptly assent to the Bills, whenever they are transmitted to him, after legislative process, as we believe the Bill if implemented would provide appropriate legal and regulatory framework in the oil and gas sector,” he added.

Meanwhile, doubts have continued to persist regarding the purported meeting between Buhari, Kachikwu, and Baru, on Friday at the Aso Rock Presidential Villa.

A source in the presidency that confided in The Guardian, dispelled the notion that the trio met as part of efforts to thaw the ice.

“There is no clue as to whether Buhari met with Dr Kachikwu at all. The minister was in the President’s Office, but there are doubts whether he was able to see the president. There is no way the president will meet Kachikwu alone… Also, though Dr. Baru prayed in the same mosque with the president on Friday, there was nothing special attached to the prayer session. It is just like people attending the same church on Sunday.”

The rift between Baru and Kachikwu has also manifested itself in other ways as the corporation has yanked off members of its board from its website, and there is also no place for the Minister of State’s portrait on the website.

Insiders say the face-off between Baru and Kachikwu actually began shortly after August 4, 2015 when Dr. Kachikwu took over from the former GMD, Joseph Dawha.

With Dr. Kachikwu combining two jobs as the Minister of State as well as the GMD of NNPC, industry experts believed it was a matter of time before the two posts would be separated. That was when Dr. Baru’s name kept popping up at most energy fora as the next NNPC GMD.

It is also believed Baru’s appointment as technical assistant by Kachikwu was meant to box him into oblivion, while deliberate efforts were made to promote Rabiu Bello, as the likely person to be appointed GMD. Not long after Baru’s emergence, Bello was appointed Chief Operating Officer Upstream, a post that is akin to deputy GMD of NNPC.

The disharmony between the duo was palpable right from the day Baru took office. In his statement that was released to journalists, Kachikwu’s name was conspicuously missing from the list of those he thanked for his appointment. But in a deft move, Baru later thanked Kachikwu at the end of his speech.

Baru’s appointment, with Kachikwu as chairman of the board was a clear indication of varying interest groups being at loggerhead with each other.
That is why industry players are of the view that Kachikwu as board chairman and Buhari retaining the Minister of Petroleum portfolio, created a power lacuna that is manifesting presently, and which Baru has creatively explored to his advantage.

This was the scenario that played out on November 14, 2016, when Baru rejiggered the NNPC, allegedly without recourse to Kachikwu approval.

Baru in a podcast to NNPC staffers said: “As you might have heard, His Excellency Mr. President has approved the High Level Organogram of the corporation ad appointment of staff into various positions. Most importantly, the changes were done in the spirit of entrenching professionalism and accountability, which is a cardinal principle of our 12 business focus areas …”

By exercising the overwhelming powers of the substantive Minister of Petroleum Resources, Baru showed that Buhari’s approval supersedes that of the entire board and played his politics right.”

Reacting to the appointment of a board that did not feature any known energy egghead, Director of Emerald Energy Institute, University of Port Harcourt, Prof Wumi Iledare, observed that such appointment would not serve the purpose of enhancing the efficiency of the NNPC.


Iledare told The Guardian that though composition of boards of government agencies were done to placate and reward politicians after their electoral victory, that of the NNPC cannot be treated likewise because of its centrality to the survival of the country.

His words: “The Chief of Staff to the President, Abba Kyari on the Board leaves much to be desired. The President is the only one that can explain why his Chief of Staff is on the Board of the NNPC. I expected the President to make Dr Kachikwu a full minister, instead of him retaining that portfolio. To me, this is too much gap and policy incoherence. Is the Chief of Staff representing the president’s interests on the board? Is he appointed to the board to assume the role of a policeman to monitor activities of the board? I just can’t find the justification for the appointment of Kyari into the board.”

Iledare said the absence of any notable energy expert on the board is an indication of a huge gap in driving the energy policy direction.

“For me, I am disappointed at the composition of the board and its members. I tried to study those that are appointed into the board and I wonder the degree of their competence to take the NNPC to the next level and that much needed competence is lacking. There are many eminent Nigerians who would have taken the NNPC to the next level. I am not sure many people on the board can actually question Kachikwu’s decision as chairman of the board.

He added: “The President certainly needs more than one official person to advise him on energy sector. He needs a special adviser, who is going to have a professional eye beyond political considerations.”


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