NNPC Director questioned 11 times by DSS over crude swap deals

NNPC Towers

NNPC Towers

*Says there’s “siege mentality” within Corporation

Oscarline Onwuemenyi,
with agency reports

15 July 2015, Sweetcrude, Abuja – 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.

Last month President Muhammadu Buhari dissolved the board of the NNPC, and more sackings are expected. Meanwhile, the Department of State Services (DSS) intelligence agency has been carrying out investigations.

“The DSS has been harassing some of us,” the Group Executive Director, Refining and Petrochemicals, NNPC, Mr. Ian Udoh, told Reuters in an interview in Abuja.

“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.”

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.

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.

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