Why NNPC Board Was Dissolved

Only a few undiscerning Nigerians and foreigners would have been surprised by the dissolution,yesterday,of the board of the Nigerian National Petroleum Corporation (NNPC) by President Muhammadu Buhari.

For as long as anyone can remember,the organization has been stumbling from one corruption scandal to the other,the latest being the 2013 allegation by the immediate past Governor of the Central bank of Nigeria (CBN) and now the Emir of Kano,Alhaji Muhammadu Lamido Sasusi ,that the NNPC failed to remit up to $20 billion to the federation account.

The allegation was to cost him his job at the apex bank even after forensic auditors appointed by the immediate past administration said only $1.4billion should be remitted by the firm.

The NNPC was established on April 1, 1977 following the merger of the then Nigerian National Oil Corporation and the Federal Ministry of Mines and Steel with sole responsibility for upstream and downstream developments.

It is also charged with regulating and supervising the oil industry on behalf of the Federal Government.

Eleven years after the birth of the NNPC it was commercialised into 11 strategic business units, covering the entire spectrum of oil industry operations: exploration and production, gas development, refining, distribution, petrochemicals, engineering, and commercial investments.

It manages the joint ventures between the federal government and such foreign multinational corporations like Royal Dutch Shell, Agip, ExxonMobil, Chevron, and Texaco (now merged with Chevron).

Through collaboration with these companies, the Nigerian government conducts petroleum exploration and production.

The oil companies appropriate portions of their revenue which is nearly 60% of the revenue generated by the oil industry in this manner,to the government.

With oil as Nigeria’s largest revenue earner,cash flow from the NNPC accounts for 76% of federal government revenue and 40% of the entire country’s GDP.

But in reality,the corporation and many of its subsidiaries have failed in living up to their responsibilities.

Its refineries hardly work with the result that Nigeria relies more on imported fuel .

Thus, scarce foreign exchange is wasted on importing fuel while billions of naira is also paid as ‘subsidy’ to importers.

This mode of business has since been found to be a huge racket on the nation.

Several of such fuel importers are currently standing trial for defrauding the country and Nigerians are not likely to forget in a hurry their recent harrowing experience when the importers refused to do business.

The ‘missing’ $20billion was a major dent on the reputation of the last government even if its key actors refuse to admit it.

Nigerians are angry with the NNPC on account of its operations and alleged corruption.

Most of the misgivings concern the ‘missing’ $20billion and perveived mismanagement and abuse of the Petroleum Support Fund otherwise known as oil subsidy and lack of transparency .

They are clamouring for its removal and probe of those that managed the fund.

With the then President-elect Muhammadu Buhari vowing in April to revisit the ‘missing’ money issue,his anti-corruption reputation,and his vast knowledge of the oil and gas industry,it was to be expected that he would have more than a passing interest in the sector on his assumption of office.

Observers believe that the NNPC dissolution is just a prelude to what is to come from Buhari in the industry.

It should not be a surprise if he orders an inquisition into what is generally perceived as the financial indiscretion of successive administrations in the organization.

He may not even limit the looming probe to the ‘missing’ $20billion.

Nigerians and foreigners are asking questions on other corruption related allegations against NNPC like the over $1million bribes which ABB Vetco Gray, a US company, and its UK subsidiary ABB Vetco Gray UK Ltd, claimed to have paid to officials at NNPC subsidiary NAPIMS in exchange for