How Buhari can reposition NNPC for efficiency, transparency, by PENGASSAN

As concern grows over the vague manner in which the Nigerian National Petroleum Corporation (NNPC) and its subsidiaries are run, oil workers under the aegis of Petroleum and Natural Gas Senior Staff Association (PENGASSAN) have pointed the way forward for the incoming government of president-elect, Muhammadu Buhari.

They want an immediate total restructuring to position the corporation for global best practices, transparency and accountability.

A recent audit report by PricewaterhouseCoopers (PwC), a reputable audit firm, commissioned by the out-going Federal Government to look into the books of the NNPC revealed that the corporation was not transparently run. The forensic audit indicted the management of the national oil corporation for various questionable transactions.

Part of the findings by the audit firm was that the NNPC failed to remit about $1.48 billion to the federation account for various unreconciled transactions. The audit was prompted by an earlier allegation by the former governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi (now Emir of Kano), that the corporation failed to remit about $20 billion oil money into the Federal Government’s coffers.

Francis Johnson, president of PENGASSAN, in a position paper by the association titled ‘Roadmap to revamp the Nigeria oil & gas industry’ released at the weekend, said the NNPC as presently structured undermines national growth majorly because of undue interference by external forces which include the presidency, minister of petroleum, among others.

“NNPC and its ten subsidiaries have been subjected to undue political interference that hinders its autonomy  for effective running and competitiveness. 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 national oil corporation and its subsidiaries.

“Appointment, removal and/or transfer of the heads and the staff of the corporation and its subsidiaries are often executed by fiat, undermining the extant national laws, NNPC Act and its corporate policy and procedure guide,” said Johnson.

To move the corporation forward and position it to realise the national objective of its establishment, PENGASSAN called for the reorganisation of the corporation and its subsidiaries to function effectively and with clearer mandate.

“Instill in NNPC the culture of corporate governance and career management which require a legislative review to ensure that the board of NNPC is headed by technocrats and not politicians.

Infuse compliance with global best practices and competitiveness, responsibility, transparency and accountability of all accruing revenue and expenditure. Ensure that audit of NNPC and subsidiaries’ business and investment relationships, operations, financing, procurements are carried out
and published at appropriate intervals,” the association said.

It also called on the incoming government to make the position of the group managing director (GMD) of NNPC and the managing directors of the subsidiaries to be tenure-based and ensure security of tenure, not to be terminated at will by the president. Frequent changes in top management positions lead to policy somersault, and create unstable system, which often breed compromise of corporate values and principles.

“Equally ensure that group executive directors (GEDs) are permanent members of the board to facilitate effective decision making. Eliminate undue political interference and abuse of policy on recruitment to foster career growth.

Halt poor succession plan and career management, causing distortion in NNPC structures,” Johnson said.