NNPC: Why Luman's Reform Will Fail


Ifeanyi Izeze



The former Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Alhaji Abubakar Yar Adua, was sacked two weeks ago to give way for government’s restructuring of the nation’s oil sector and ensure more effectiveness according to the explanation by the Presidency.


He was replaced by Alhaji Mohammed Sanusi Barkindo, who was until last two weeks, the Group Executive Director, Special Projects.


From its established record of quick successions of GMDs, the Nigerian National Petroleum Corporation (old and the expected new –born NNPC) deserves a comical applause in the global oil and gas circle.


A top level NNPC staff aptly captured the picture of the pathetic state of the nation’s apex oil concern when he sarcastically said, “Here (NNPC), it is like a neighbourhood barbers shop where heads of different sizes and shapes come and go. And it is not a coincidence that almost all the former group managing directors of the corporation were removed with executive fiats citing almost similar reasons- inefficiency, corruption and probably disagreement with powers that be on the technicalities of the corporation’s activities”.


Engr Yar’Adua who was appointed in August 2007, took over from the Obasanjo ace man, Funso Kupolokun who took off from where Dr Jackson Gaius Obaseki stopped. Dr Obaseki occupied the position for about four years just like his predecessor Alhaji Dalhatu Bayero whose tenure was preceded by Mr Chamberlain Oyibo who occupied the position for less than twelve months. Dr Edmond Dakouru, as the NNPC group managing director, spent about twelve months and that of Dr Thomas John who took over from Alhaji Sani Bello preceded his tenure. Before Bello was late Dr Aret Adams who took over from Lawrence Amu.


It is very interesting that majority if not all the staff were removed or rather changed with similar excuses not from the industry but from the Presidency where the real and functional headquarters of the NNPC has been domiciled.


The crucial question is: At what point do the fleet of sacked group managing directors usually become bad administrators? We must ascertain the specific point in the life cycle of their career whether before, during or after assuming the position of the group managing director as this may be a useful pointer to even the new helmsman on the familiar path he is going to thread on his way out of the organisation.


It was more or less an abuse on the sensibility of Nigerians for the Presidency to claim that “the change(s) were made to bring greater effectiveness to the coming reform with the implementation of the Dr. Rilwan Lukman committee on the oil sector.


“The appointment of Barkindo as the new GMD is strategic as it marks the beginning of the reform process and the kind of national oil company the President envisages to emerge at the end of the restructuring process.”


Interestingly, the Presidency claimed that the recent sweep at the NNPC “was part of a transitional phase that will see the Corporation transform from a mismanaged cost centre with conflicting roles to a fully integrated commercial oil and gas corporation driven by revenue generation and profit objectives.” This is pure grammar!


Is Bakindo coming from the moon? Has he not been part of the same alleged mismanaged cost center even at the topmost cadre?


The NNPC regrettably has been the architect of its misfortunes. The successive administrators of the Corporation allowed the Presidency to use them to ridicule the nation’s sole representative in the crucial oil sector. This is the truth.


It is unexplainable that the successive GMDs have been mere rubber stamp executives. Authouritatively speaking, all NNPC documents that has to do with expenditures whether projects or administrative expenses had to be taken to the Presidency for signing and endorsement before the GMD can do anything. Haba!


This is mainly because since the corporation was established in 1977 to oversee the management and operation of the nation’s oil industry, it has not only failed to establish itself as an active oil company that is in business to make profit, it has also failed in establishing administrative structures that is free from government manipulations.


The administrators and their masters at the Presidency have over the years milked the organization through fraudulent diversion of funds from sales of crude oil, importation of refined petroleum products, fake contracts and other business transactions of the corporation’s strategic business units. This was how the Corporation metamorphosed into a haven for fraud.


So any performance rating or assessment of the NNPC would be incomplete and bias, if it does not take due consideration of the negative effects of government’s undue meddling in the activities of the corporation.


Has anybody bothered to ask from where and how the NNPC gets the funds to run its operations including the joint venture obligations? Does the Corporation really have anything like budget in the strict sense of the term?


Government’s interference in the operations of the firm, especially in money matters has done more harm, and made the corporation to lose its credibility both at home and abroad. This practice was taken to a criminal level during the Obasanjo administration.


No amount of restructuring would produce any meaningful result except the issue of government’s undue meddling is address as a core issue in the new reform agenda.


As a critical pivot in the Lukman’s reform agenda, the Presidency should learn to stay clear from the day to day running of the NNPC and to trust the administrators of the corporation to do the right things. This could be achieved by putting the right people in the right places rather favouring political jobbers who may just be sitting inside the NNPC system. If not, few years from today, we will be chanting the same old song of an expanded mismanaged cost centre.