Nigeria: Irresponsible Oil Minister Vs Corrupt And Solvent NNPC

If Nigeria were to be a normal country, the last person that would have described the Nigeria National Petroleum Corporation (NNPC) as “corrupt, lacking in transparency and inefficient in all its dealings” would have been the Minister for Petroleum Resources, Mrs. Diezani Allison-Madueke because she knows and had been part of the problem of the nation’s apex oil concern.

Is it not funny that Austen Oniwon, group managing director, Nigerian National Petroleum Corporation (NNPC), finally admitted that the Corporation was broke, laying to rest the denials surrounding the dire situation of the state-owned oil firm’s financials which was first brought to the limelight in 2010 by ex-minister of state for finance, Remi Babalola.

Oniwon told a gathering of top oil and gas executives at the Oil and Gas Conference and Exhibition in Abuja that the NNPC balance sheet was in the red. “The account of the organisation is in the negative; corporate failure is imminent unless urgent transformation is carried out” Oniwon told the stunned gathering.

It would be recalled that Babalola had, in July 2010, raised the alarm on NNPC’s bad financial shape when he told a Federal Account Allocation Committee (FAAC) that the Corporation did not have enough money to fund its operations and was technically insolvent.

Levi Ajuonuma, NNPC spokesperson, had profusely defended the Corporation’s financial standing then.

According to him, “We (NNPC) cannot be classified as insolvent when we have a healthy cash flow and we can pay for our crude and product importation obligations.” Oniwon’s latest revelation rubbishes Ajuonuma’s position and confirms the true picture of NNPC’s financial health hitherto hidden from the public. Even the Finance Minister, Olusegun Aganga and the former Minister of Information, Prof Dora Akunyili accused Babalola, of not having the whole picture before making the statement that rattled the Presidency.

According to both Jonathan Ministers, “From the Auditor’s Account, NNPC is a going concern and does not have solvency issue as a corporation. Therefore categorically, NNPC is not insolvent.” Recent revelation has now shown that both Prof Akunyili and Aganga deliberately failed to acknowledge that on their part equally, they never had a comprehensive picture of the real problems of the NNPC.

First of all, the Group Executive Director, Exploration and Production, Mr Andrew Yakubu who represented the Minister should bury his head in shame for agreeing with Madueke to solicit the support of all stakeholders to assist in” entrenching transparency and discipline in their business dealings with NNPC officials.” Mr Yakubu has literally told Nigerians that he is very corrupt and inefficient and has no business holding the position of responsibility assigned to him. Yeye country!

NNPC is in serious trouble and the situation is not going to change at least not in the near future except something is radically done to free the corporation from the evil grip of politicians especially the Presidency. The highly trumpeted Petroleum Industry reform bill (PIB) will not in any way stop the plundering so long as the administration of the corporation is still tied to the Presidency. Does the NNPC have its own accounts or rather funds different from the Presidency in the strict sense of it? Diezani Madueke should tell Nigerians the true situation. The NNPC has no operational budget in the strict sense of it. The corporation gets whatever it needs for its operations directly from the Presidency. Is that how to run an oil company?

Truth be told, no amount of refutation or colouring will clear or repair the damage politicians especially the Presidency since the days of Obasanjo and Umaru Yar’adua and now Jonathan have done and still doing to the nation’s apex oil concern. Few privileged politicians have looted the NNPC to bankruptcy. The problem of the organization is in the deliberate and fraudulent structuring of its relationship with the Presidency where the corporation does not have a life of its own but depends on any sitting president for almost everything it needs to run its operations.

Past Nigerian leaders indiscriminately demanded money from the corporation without recourse to due process. Ibrahim Babangida, Sani Abacha and Abdulsalami Abubakar were all culprits in this fraudulent hijacking of the NNPC funds. Olusegun Obasanjo came, saw and completely destroyed whatever was left as financial autonomy of the corporation. Yar’adua did his own and now Jonathan with the help of his minister of petroleum is on it. The current problem started with Gaius Obaseki as the group managing director of the NNPC and former President Olusegun Obasanjo who in a sinister attempt to check alleged widespread corruption in the organization usurped almost all the powers of the GMD in money matters.

The unholy act continued and was even taken to a criminal height during the tenure of Funso Kupolokun where the NNPC boss cannot even approve any spending higher than one million. Those close to the Presidential Villa at that time would confirm that Kupolokun used to come to the villa with Ghana-must-go bags of documents for Obasanjo to sign and approve.

The evil act also continued into the Yar’adua Presidency and was worsen by the late president’s incapacitation as a result of the ill health which made NNPC seek approvals from all kinds of aides even house wives. Nigerians were openly told during the PTDF controversy between Obasanjo and his deputy how NNPC funds were diverted by President Obasanjo through proxy accounts to fund both the activities and chieftains of the Peoples Democratic Party (PDP).

The current NNPC boss, Mr Oniwon, at a Senate Oil and Gas Committee hearing on the insolvency controversy sometime last year clearly showed some of the few cases of outright irresponsibility by the Presidency concerning the NNPC funds. According to him, “when the Department of Petroleum Resources, DPR, was to be established, the then President (unnamed) directed the NNPC to release N651 million for the take off but that it had never been refunded. “When a sugar company was to be established, the President (unnamed) also asked them to release another $18 million which also has never been refunded to date.”

These are just a few cases of how the Federal Government (Presidency) has been directing NNPC to release funds without recourse to due process. In the thinking of the Minister for Petroleum, the proposed reform in the oil and gas sector was to sanitise the NNPC as well as the entire nation’s oil industry. “It is our hope that all stakeholders and players in the industry will extend a hand of partnership in entrenching the transparent and efficient ways in which we now desire to do business by leveraging on the laws of the land. This will no doubt ensure accountability in the management of investments across the value chain.”

This is a pure lie. The reform will not stop corruption in the system as long the President remains the defacto administrator of the nation’s apex oil concern. The first stakeholder that should be warned is the Presidency where the minister of petroleum resources is domiciled right from her arrival as oil minister.

And most importantly, the National Assembly should put legislative instruments in place to severe the NNPC from the parasitic apron string of the Presidency and ruling party loyalists.

Ifeanyi Izeze is an Abuja-based consultant on Strategy and Communication
(iizeze at


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