NNPC Reacts To Punch’s Call To ‘Tame NNPC Now’

NNPC headquarters

The Nigerian National Petroleum Corporation, NNPC, has reacted to an editorial of Punch newspaper of Monday, April 11, 2016, titled ‘Audit Report: Tame NNPC Now’.

In a statement signed by the Corporation’s management, it said the editorial contains some errors, which it highlighted.

Read the rejoinder below:

The Nigerian National Petroleum Corporation (NNPC) acknowledges the PUNCH newspaper editorial of Monday, April 11, 2016. In the said editorial, the paper opined that in the wake of the allegations by some government agencies that the NNPC has failed to remit some certain amount of monies into the Federation Account; the Corporation’s “lawlessness” should be called to order.

Although we have our reservations as to the real motive and intent of the editorial, the nuanced presentation and prayers in the editorial have persuaded us to accept that it was written with the best of intentions and we therefore accept the criticisms in good faith.

In spite of its patriotic language however, we wish to strongly state that the editorial contains a number of errors, distortions and misrepresentations in most, if not all, of its claims. To start with, virtually all the issues raised by the PUNCH editorial which essentially have to do with the remittance of proceeds from crude oil sales to the federation account have been addressed in painstaking detail by the NNPC management when the issues were originally raised by the various agencies that the PUNCH editorial relied upon for its claims.

A little check on NNPC’s position on some of those issues would have saved The PUNCH editors not only some valuable time but also some precious space. For the purpose of proper record keeping we wish to restate our position as follows:

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These allegations of non-remittance of government revenue by the NNPC by various government and non-governmental agencies are erroneous. If anything, most of the allegations were borne out of misunderstanding of how revenues from crude oil and gas sales are remitted into the Federation Account.

At every given opportunity, the current NNPC management has not failed to lay the facts and figures bare before all Nigerians and other stakeholders. Without mincing words therefore, most of these points raised by the PUNCH editorial have been addressed by the NNPC. This fact may sound typical and overstressed, but it remains what it is: the absolute truth, which no matter how often it is repeated, remains the only valid and acceptable explanation.

Of great importance to some of these issues is our constant interface with relevant government agencies such as the Office of the Auditor General of the Federation, the Nigerian Extractive Industry Transparency Initiative (NEITI), the Revenue Mobilization, Allocation & Fiscal Commission (RMAFC), the National Assembly and more recently, the Natural Resource Governance Institute (NRGI), an international governance watchdog.

In all these important engagements, we have categorically stated our positions and our explanations have never been rejected by these stakeholders. In all cases these agencies turn out better educated on our business processes and operations as it affect revenue generation and remittance to the nation’s coffers.

It should be noted that upon his appointment as GMD NNPC, Dr. Ibe Kachikwu identified all legacy claims between NNPC and the Federation and engaged with the Federal Ministry of Finance (FMF) to resolve these issues by inviting the appointed forensic auditors to conclude the previous forensic audits on these claims and the final report on this is expected soon.

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The case of the NRGI deserves some mention here. Following the recent release of its report that NNPC has failed to remit crude oil proceeds of $4.2bn into the Federation Account over the last one year (Q3 and Q4), the NNPC management invited the author of the report along with other officials of the NGRI and opened up its books to them to cross check with their claims. Two meetings were held and at the end of which NGRI admitted that their report was wrong and asked the NNPC management to grant the NGRI one week to review their claims. The one week expires today Tuesday, April 12 2016, and we expect the NGRI to issue its reviewed position anytime from today.

We also wish to appreciate the compliment of the PUNCH editors who advised the government “not to rely on the perceived integrity of the Honourable Minister of Petroleum Resources alone.” This albeit reluctant endorsement of the Minister’s personal integrity underscores the reality of what he has been preaching and practicing since his assumption of office both as GMD of the NNPC and Minister of State for Petroleum. His cardinal principles have always been: Transparency and efficiency.

It is no longer news that under Dr. Kachikwu’s stewardship of the NNPC as the GMD, the Corporation has made transparency and accountability its watchword. For instance, for the first time in over a decade, NNPC’s financial and operational reports are now in the public domain. The Minister’s integrity therefore is real and not merely perceived.

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Furthermore, under his leadership, NNPC’s financial focus has been on cost reduction across board, an effort that has yielded a drop in monthly operational losses from N30Billion in August 2015 to N3Billion in January 2016. This is also evident in the improvement in revenue remittances to the Federation Account.

It is also noteworthy that it is Dr. Kachikwu’s belief in openness and transparency that led to him allowing full access by relevant government agencies into NNPC’s books. As we speak today, most of the reports put up by these relevant government agencies are now richer, with Nigerians now better informed.

Finally, it is our belief too that on at least one important issue both the PUNCH editorial and the NNPC management are in agreement. This is with respect to the need for the NNPC to be restructured and repositioned for optimum performance and efficiency. And this, we hasten to add, is at the core of the efforts on which Dr. Kachikwu has invested his energy and wealth of knowledge of the oil and gas industry garnered over decades as a major player in the industry.

Finally we wish to acknowledge that the PUNCH has a right to demand for an NNPC that is better positioned to meet modern realities. This is also the fundamental objective of the Kachikwu-led reform of the NNPC: To reinvent an NNPC which operations and claims are Factual, Accountable, Competitive and Transparent (FACT).

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