A Review of the Nigerian Energy Industry

PENGASSAN faults El-Rufai on calls to disband NNPC


*Says Corporation needs more autonomy, corporate governance

17 July 2015, Sweetcrude, Abuja – The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has faulted calls by Kaduna State Governor Nasir El-Rufai for the scrapping of the Nigeria National Petroleum Corporation (NNPC).

The Acting General Secretary of the association, Lumumba Okugbawa, who noted in a statement on the governor’s comment in a paper he delivered at the 7th Prof. Wole Soyinka Birthday Lecture on Monday in Abuja, said instead of calling for NNPC to be killed, El-Rufai should have called for the insulation of the corporation from undue political interference.

Okugbawa noted that corruption was not peculiar to the NNPC as mentioned by the governor, but a problem hindering the country’s growth as well as the oil and gas sector

According to him, the NNPC, which was created by an Act of Parliament in 1977, is made up of the holding office, subsidiaries and service units.

He lamented that the corporation had been subjected to undue political interference, which, he said, hindered its autonomy for effective running and competitiveness in the last six years.

But Okugbawa noted that it should not be a yardstick for the scrapping of the corporation as demanded by the governor.

He said, “Let the government deal with the corruption in the system, but not to ‘throw away the baby with the bath water.

”If you look at the NNPC as it is today, it has been politicised, with most of its decisions and operations being influenced by political motives and at times, executive fiat. The corporation is so much tied to the apron of the political office holders, but not the technocrats that are at the helm of the corporation’s affairs.”

Some of the areas of interference listed by Okugbawa include appointment and removal of the group managing director (GMD), group executive directors (GED), and managing directors of NNPC subsidiaries by the President; and limited financial autonomy for its operations.

He noted that, “NNPC should be a national oil corporation that can compete favourably globally as Saudi Aramco of Saudi Arabia, Petronas of Malaysia, Petrobras of Brazil and Statoil of Norway etc., given the opportunities and market potential.

“If we take a look at NNPC contemporaries in the world, such as Saudi Aramco, Petrobras, Petronas and Statoil, we will notice that their holding governments give those companies freedom to growth and expansion of the companies to the great benefits of the citizenry and their respective governments.”

He added that, “Operations and administration of NNPC come under several masters and conflicting instructions, some of which defy the national objectives and aspirations for setting up the corporation and its subsidiaries.

“Appointment, removal and/or transfer of the heads and staff of the corporation and its subsidiaries are often executed by fiat in the manner that undermines the extant national laws, and the NNPC Act.”

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