Economic Sabotage: We’re not thieves, Mele Kyari tells Senate

The Group Chief Executive Officer of the Nigerian National Petroleum Company LimitedNigerian National Petroleum Company Limited (NNPC Limited) on Wednesday opened up on his frustration over what he described as a media attack on his person, insisting that they at the company are not thieves or criminals.

This was as the Senate panel also raised questions over $1.5 billion approved in 2021 for the turnaround maintenance of the Port Harcourt Refinery with little or no result amid pervasive allegations of sabotage in the petroleum industry.

Consequently, the upper chamber lamented that it was unfair and wrong to treat government businesses or public companies as orphans while private businesses were flourishing and thriving.

Kyari expressed his frustration at the Senate Ad-hoc Committee probing alleged economic sabotage interactive sessions with critical stakeholders in the Petroleum Industry in Abuja on Wednesday.

This was just as the generality of the stakeholders at the interactive session, as well as the Senate ad-hoc panel members, unanimously agreed on a live broadcast of the investigations.

The interactive session also provided a major opportunity for the Dangote Refinery to state the challenges its infant refinery has been facing.

Continuing, Kyari said, “I will wait for the public hearing, and I also agree with the Minister that it should be broadcast live so that Nigerians will hear us. So that all the misinformation that you see today will be put to the side, so that Nigerians will know the truth.

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“And all of us here see what is happening in the media. Targeted personal attack on my person, on the institution, and we all know how this works. They are deliberate, they are calculated.

“So that it creates the impression that NNPC Limited and our leadership are doing anything to create economic sabotage in our country. It is far from it, Mr. Chairman.

“This company has grown, Mr. Chairman. We are proud to say this. From a lost company for 43 years to a profit-making company today.

“It is very clear from everything you have said. Through this investigative hearing, you can see the majority of the issues you have raised have nothing to do with NNPC Limited. Yet, everybody believes, by sheer misinformation which the Minister has highlighted, that NNPC is responsible for creating any economic sabotage in our country.

According to him, refining business is straightforward business where the feedstock and you must secure a market. This is basic even for NNPC refiners.

“Let me talk straight to this, it is a perfect opportunity also we have done nothing to sabotage any domestic refinery. Any one of them. There are many of them.

“Some of them are small scale, Mr. Chairman, but there is a law that guides everything we are doing. Mr. Chairman, the law is clear.

“There is domestic crude oil supply obligation. Yes, what it is saying is that process it locally, provide for local refinery, absolutely correct.

“But the law also says that there must be a willing buyer and a willing seller. He didn’t say anything else. And perhaps the only way it cannot be solved is for this National Assembly to change the law.”

The group strategy officer of the Dangote Refinery, Aliyu Suleiman, in his presentation said, “We would like to basically have three questions that we think we should look at, ask the committee and also ask Nigerians. The first question is, do local refineries deserve protection normally? That’s the first question. The second question is, should Nigeria protect its infant industries in order to improve the investment? And then the third question is, should local refineries have preferential access to Nigeria?

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“Those really are our questions that we want this committee to consider. On the first one, as I’ve said, we produced 5 million tons of products, but of those 5 million tons, about 90% of it had to be exported.

“While at the same time, products we were producing had been imported into Nigeria. We find ourselves competing against Russian products that have been produced with oil that is valued at $60.

“We all know that because of the cap that has been put on Russian oil, the value of Russian oil today in the market is $60. And that’s what Russia is using to produce their products, and those products are being sent in large quantities into Africa to compete with products that are produced in refineries that buy crude at $90.

“We don’t think this will be a fair competitive environment and I think even on that when you have such unfair competition, it is normal to put protective measures.

“The US, for example, has done that, to protect their own industries against attack by China that subsidises their own industries and then sends them to the US.

“So that’s the first question. We want to urge the committee to consider the fact that we deserve protection against them. “The second, as a nascent industry in the private sector going through a process of stabilisation struggling with the need to ramp up capacity, it takes at least three years. Within this period, the baby deserves protection.

“I think even in the animal world, the moment a new baby is born, they don’t just go and leave it out in the wild.

“So during this period, the question we are asking is, do we, and it’s not just the family, but Nigeria as a country, should we look at protecting our nascent industries in order for them to thrive? Essentially, we want to be able to sell more of our products in Nigeria because we believe we can do that, we can compete.”

On the concerns that have been expressed around monopoly, Mele Kyari said it is a problem that has been identified. “The right thing to do is to say, how do we address this problem? If monopoly is a risk, how do we address this risk while at the same time ensuring that we protect our domestic industries? And the good thing is that in the PIA, there are provisions around that. And in the PIA, you can monitor and take action if you feel there’s a monopoly, and it’s very clear the actions that are to be taken.”

“The last question is around crude. Right now, as I said, we bought about 50 million barrels of crude. About 60% of that comes from NNPC, and we are thankful to them for their support. And we’re grateful to them for their support, about 20% of that had to be imported from outside and then 20% we purchased.

“Essentially, all we are asking for, and let’s be very clear, we are happy to pay fair prices. We don’t complain about that.

“Since the refinery started full trial production in January and then full-time production started in March, since then we processed about 50 million barrels.”

Mele Kyari said the refinery has produced about five million tons of petroleum products. “And these petroleum products have been sold to various parts of the country. Jet has been sold in Europe since May. It’s been sent to Europe. Other products have been sent to places as far as Asia, the US, Brazil, and so on. So the refinery has been making a lot of progress.”

This was as the Minister of State for Petroleum Resources, Heineken Lokpobiri, promised that the government will ensure the completion and rehabilitation of the three refineries that are fallow so that we can reduce the level of import.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, indicated that the 2024 budget has estimated and projected 1.7 billion barrels per day. “We are below that target. Crude oil production is moving up. I believe that we have the expansion. We are up at 1.6 billion barrels per day. And we have this commitment that we will be able to reach 2 billion barrels per day. And that is critical.

“Why it is critical is that it is the first source of foreign exchange as well as foreign revenue. And at a time where policies are geared at stabilising the economy, a critical aspect of that is the inflow of foreign exchange to stabilise the exchange rate, enable the exchange rate to appreciate, thereby helping to reduce inflation.

“That will now lead to the central bank and monetary authorities being in a position to lower interest rates and therefore encourage investment.”

“Investment is the basis on which we can increase productivity, grow the economy, create jobs, and reduce poverty. So it is critical that NNPC, that the oil sector as a whole, performs.”

He said it is the reason the fiscal environment has been improved. “We all know the oil is there. It is the investment environment that encourages the private investors to come in, to produce the oil, and therefore, especially in the scenario of moving away from fossil fuels. NNPC has even declared a war on oil production. We know of issues of insecurity, issues of damage that have limited and made us come below the budget. So there is a commitment to dealing with these issues.”

The Minister of State for Petroleum, in his remarks at the interactive session, said a lot of misinformation has been churned out to the public on the roles being played by his ministry and other agencies in making it inclusive for interested investors. The planned public hearing by the Committee, according to him, would afford Nigerians the opportunity to know the truth of happenings in the sector.

“Please do us a favour by televising the planned investigative hearing on the alleged economic sabotage in the petroleum industry live,” he said.

He gave the commitment that the government is working hard to reduce dependence on the importation of refined products as the refineries would soon be on stream.

In his opening remarks, the Chairman of the Ad-hoc Committee, Senator Micheal Opeyemi Bamidele (APC Ekiti Central), said the committee was not out to witch-hunt anybody or group of persons but to unravel identities of those sabotaging the petroleum sector .

He specifically noted the alleged importation of hazardous petroleum products and substandard diesel into Nigeria arising from non functionality of government owned refineries in Nigeria.

“In 2021, specifically, the Federal Executive Council approved $1.5 billion for the turn-around maintenance of the Port Harcourt Refinery. Yet, this investment has not yielded significant returns.

“For us, in the Senate, we believe, it is unfair and unpatriotic to treat government businesses or public corporations as an orphan while private businesses are flourishing and thriving”, he said.

The committee has fixed the public hearing for September 10 to 12 , 2024 along with their counterparts from the House of Representatives.