A Review of the Nigerian Energy Industry

Scrap NNPC now — Former executives, others

21 January 2015, Lagos – Many former management executives of the Nigerian National Petroleum Corporation, NNPC, and other oil companies’ senior executives have called for the scrapping of the Corporation, saying, it has destroyed its values and hindered the growth of the Nigerian oil and gas sector.

NNPC towersThe oil chiefs made the declaration in Lagos, at a symposium to mark the 80th birthday of Chief Festus Marinho, a former Group Managing Director of the NNPC.

They called for the scrapping of the NNPC, accusing it of deviating from the roles and goals set for it and the oil sector by its founders.

This is a real twist from the oil chiefs, as all had been part of the system, which they now criticise, especially as all had the capacity to bring about the much desired structure they referred while they were still in NNPC.

“The NNPC is today, a net-destroyer of value in the oil and gas sector. Taking a look at developments in the oil and gas sector, the about $5 billion unpaid cash call, among others, will make one to ask if the NNPC is really adding value to the sector and to the Nigerian economy,” said Mr. Austin Avuru, Chief Executive Officer, Seplat Petroleum. Avuru had also retired from the NNPC system.

He noted that the NNPC was set up about the same time as other state-owned oil companies in some countries, but today, its peers in these countries sell their crude oil by themselves, while NNPC only calculates volumes and allocations it gave to other companies to sell for it.

He therefore advised that the NNPC be reduced to an efficient revenue collector for the government, while government makes effort to manage the revenue efficiently, using it as a catalyst for economic growth and ensuring that some portion are saved for the rainy day.

He further stated that the Federal Government should hands off the oil and gas sector, allowing indigenous investors to run the sector professionally.

Speaking in the same vein, Mr. Ibrahim Waziri, Chairman, Transmission Company of Nigeria, TCN, and former Executive Director, Corporate Services, NNPC, called for the scrapping of the Corporation.

He said, “There is no need to retain the NNPC, especially as other agencies perform the functions of the NNPC very well, such as the Federal Inland Revenue Service, FIRS, in the area of revenue collection.”

He said the role of government in the oil and gas sector needs to be changed, adding that government’s role has reached a diminishing return.

“Government should pull back and allow indigenous players and others to bring their expertise to bear in running the sector, while government focuses on collecting taxes and carrying out its original duties of maintaining law and order and security,” he added.

In his submission, His Royal Majesty, Dr. Edmund Daukoru, (Mingi xii) the Amanayanabo of Nembe Kingdom, disclosed that direct interference from government has over the years destabilised the NNPC.

According to him, for the NNPC to remain relevant, it is necessary to have people with courage and conscience at its helm of affairs, who can dare the government and damn the consequences of their actions.

Also, the keynote speaker, Mr. Odein Ajumogobia, former Minister of State for Petroleum, disclosed that Nigeria’s petroleum policies have always been incoherent, due to the constant change of key officials, in the NNPC and the Department of Petroleum Resources, DPR.

According to him, this instability brought about by the constant changes of key officials is not a recipe for coherent policy making.

He said, “Petroleum policy is not always entirely coherent due in part to the frequent change of important officials. Since NNPC was created 38 years ago, we have had 16 Group Managing Directors (GMD). In 30 years, from 1977 to 2007, there were nine, average of one every three years.

– See more at: http://www.vanguardngr.com/2015/01/scrap-nnpc-now-former-executives-others/#sthash.Yzl6qhON.dpuf

– Vanguard

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