NNPC: Another Messy Contract | Independent Newspapers Limited
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NNPC: Another Messy Contract

Posted: Jul 31, 2015 at 4:00 am   /   by   /   comments (0)

The recent call by the governor of Kaduna State, Mallam Nasir El-Rufai, for the disbanding of Nigerian National Petroleum Corporation (NNPC) may not have come as a surprise to keen observers especially because of the most despicable manner that the NNPC management is said to have run the corporation particularly with respect to award of contracts. A development has brought to question the integrity of those under which NNPC and its subsidiaries were managed during the last administration.

Since the NNPC and its subsidiaries came under a new level of scrutiny, there have been several revelations. First was the alleged speculation of incidents of difference in volume of crude oil that was discharged compared to the volume on the bills of lading between Nigerian authorities and crude oil buyers. This information regarding difference between the loading and discharge figures, especially with certain countries only clearly shows that NNPC and the subsidiary companies, DPR, NAPIMS, etc. may be neck deep in corrupt practices.

It is doubtful if this regime has not also discovered how the former minister of petroleum, reportedly¡ out of anger, ignored the advice of Total Upstream Nigeria Limited, TUPNI, which is in joint partnership with NNPC on the DML – 130 Egina field development project, FPSO hall and top-sided contract no. EGI/C115 and allegedly approved a recommendation  for an international bid duly won by Hyundai Heavy industries, (HHI). Even when the general executive committee of Total reportedly insisted that Hyundai Heavy Industries’ bid and tender as well as technical expertise got Hyundai the job, last minute manoeuvres and intrigues,allegedly pushed Hyundai out of the international bid that they clearly won for Samsung Heavy Industries(SHI).

Although intrigues are common to most business practices,however for international standards,not a few Nigerians expect the NNPC to follow due process.

The fact that the NNPC GED, E & P approved NAPIMS and Total joint recommendation to award the $3.9billion FPSO project to Hyundai Heavy Industries in May 2012 only for the same GED E & P to sign another document with two other officials recommending SHI, to the board of NNPC which the former petroleum minister hurriedly approved even when Total insisted on fair treatment of the original bid winner, is  unfortunate. That in itself portends  a dangerous trend for the NNPC.
This is coming on the heels of recent discovery of how Nigeria allegedly lost $2billion in oil deals under the last administration a development that may have made Nasir EI-Rufai and the speaker of the House of Representatives, Hon Yakubu Dogara to call for a policy direction that would restructure the NNPC.

According to El-Rufai, NNPC only remitted about 58% of the monies earned between 2012 and half of 2015.

No doubt, a corporation that can retain 48% of the common wealth of the country is not different from a veritable parallel republic. Which is why the NNPC in our estimation decided to award contracts with impunity not minding whether it was an international bid or not.
NNPC and its subsidiaries may not be alone in the impunity melodrama but as a way of ensuring that those who run the corporation with reckless abandon do not go unpunished, the Muhammadu Buhari administration should bring to book all the people involved in the illegal award of contracts without following due process as well as make them to explain to Nigerians the position of the FPSO Egina project. That way, international observers and indeed Nigerians who were dissatisfied would appreciate that the wind of change has suddenly made Nigeria a country where due process is now the name of the game.