Mohammed Shosanya
The recent metamorphosis of the Nigerian National Petroleum Corporation to the Nigerian National Petroleum Company Limited on account of the birth of new Petroleum law,was a watershed in the history of the nation’s hydrocarbon industry.
Little wonder,those whose who had expressed concern over the the fate of the old NNPC are doubly satisfied with the ongoing change in the company,which is being spearheaded by its Group Chief Executive Officer,GCEO,Mallam Melee Kyari.
They are particularly excited over the profitability streak of the company and the futuristic gains the development would have on the nation’s economy.
The Nigerian National Petroleum Company Limited NNPCL under the current management has been working silently to groom the company into a world class business outfit that can compete with its contemporaries in the other parts of the world
Industry sources hinted that the journey into turning the company into a profit making entity actually commenced two years ago when the company, contrary to negative permutations from its detractors posited a whopping profit of N674.1 billion
This contradicts views by some individuals and institutions on the activities of the company in recent years.
The N674.1 billion,without contradiction,was the highest profit figure to be recorded by the organisation in its 46-year history.
Industry watchers expressed concern over recent campaign of calumny and falsehood being spread against the management of NNPCL, calculated to de-market the establishment’’.
The development had put the company in the eye of the storm, stoking confusion and misleading stakeholders and the general public on the activities of the company at present.
The e NNPCL posted its first profit in 44 years in 2020, recording a profit of N287 billion from a loss of N803 billion posted earlier .
It also recorded a loss of N1.7 billion in 2019 before it returned to profit-making in recent years, arising from critical business strategies adopted by the company’s management lately.
The emerging facts detailed what it described as speculative and misleading allegations that needed to be explained for a better understanding of the role of the NNPCL in nation building.
It mentioned what it described as untrue that “the NNPCL has been notorious for befuddled accounting, waste, losses, run-down refineries and non-remittances of cash, due to the federation account’’.
It explained that the essence of making the facts public was to bring out basic truths on various issues agitating the minds of people and to keep the records straight.
It also added that the NNPCL had posted all its financial statements from 2015 to 2022, noting that certain claims could be verified in the office of the auditor-general of the federation rather than misinforming the public.
On the allegation that the President Muhammadu Buhari administration wasted $19 billion to rehabilitate four state-owned refineries without result — the same amount the Dangote Group had invested in its 650,000-barrels per-day refinery, the emerging facts described the allegation as an attempt to mislead Nigerians.
“The totality of the spending inclusive of salaries and wages of workers can’t be compared with what it will cost to set up Dangote refinery,’’ a source in NNPCL argued.
An presidency source also shed light on a statement that the Goodluck Jonathan administration had said it would borrow $1.6 billion for Turn Around Maintenance (TAM) but that under Buhari, the NNPCL also borrowed additional $1.5 billion for the same TAM.
According to the presidency,the figures were wrong, saying that the company, which represented the Federal Government in its efforts to rehabilitate the refineries through an Engineering Procurement and Construction (EPC) contract with its partners had spent only its approved counterpart funding.
It added that the details were clearly spelt out in the memorandum of understanding signed for the respective refineries.
“For the records, the cost approved by the Federal Government for the rehabilitation of the nation’s three refineries are $1.5bn; $740m and $548m for Port Harcourt, Kaduna and Warri refineries, respectively.
“The two EPC contractors are Tecnimont (France), which handles the Port Harcourt Refinery rehabilitation and Daewoo (South Korea), which oversees the quick-fix projects at both Kaduna and Warri refineries.
“Under President Goodluck Jonathan, no money was borrowed for turn-around maintenance. Under President Buhari, only $1 billion was borrowed. Rehabilitation is still ongoing.”
A senior official close to the presidency also picked holes in the allegations by a committee of the House of Representatives that the company failed to transfer N2 trillion to the federation account after the Petroleum Industry Act (PIA) came into effect in 2021 and that Buhari unveiled a company worth $64 billion (N28 trillion at N450/$1), but that only $58.8 billion or N26 trillion was transferred.
According to him,,the net book value of assets transferred to NNPCL as of July 1, 2022, amounted to $58.8 billion worth of assets and not cash.
“This figure is without the Nigerian Pipeline and Storage Company (NPSC), which has all the depots and pipeline network that was transferred to NNPC in 2022.
“That figure didn’t include NPSC, which wasn’t moved initially at the time of being a limited liability company. So, how much are we worth in assets?”
On another allegation by members of the House of Representatives that equipment worth $250 million the NNPC ordered for the Port Harcourt Refinery years ago had not been accounted for, the source clarified that more than 100 containers with materials meant for the refineries were left to rot at Nigerian Ports.
He added:This was before Buhari’s administration, and it was attributed to the reckless procurement process in the past.Things started to change for the better with the rehab programme in 2021. This follow-up also led to the reduction in the cost of turnaround maintenance”
Reacting to the allegation against the management by the lawmakers that NNPC Ltd. had claimed to have 25 subsidiaries, whereas on record, only 21 could be accounted for.
Premium News reports that there were 25 subsidiaries in NNPC Limited before re-organisation.
A senior official of the company said:“All unviable subsidiaries were shut down in a bid to reduce overhead cost and optimise revenue.Businesses with duplicated functions were merged for economies of scale and optimisation, and new units were created like new energies, leading to reduction in the number of subsidiaries from 25 to 21″
