Role of NNPC’s Crude Oil Market Dept. exposed
NIMASA pocketed N65bn annually, says Amaechi

In tandem with the determination of President Muhammadu Buhari’s administration to fight corruption, especially in the revenue generating agencies in the country, Nigerian Pilot investigations have revealed that the organisations are not only fleecing the country dry, very powerful forces are behind their stubbornness in yielding their respective operations to needed due diligence.
The report of the month-long investigation also reveals the role of the Crude Oil Marketing Department, CMOD of the Nigeria National Petroleum Corporation, NNPC and the embattled Nigeria Maritime Administration and Safety Agency, NIMASA among others in the entire scheme.
Agencies short-change Nigerians
With 82 federal revenue-generating agencies, Nigeria ought to be awash with cash. But the administration of President Muhammadu Buhari has been worried that on the contrary, not much revenue is coming from the agencies. Instead, it has been reports of corruption, graft and practices inconsistent with the government’s revenue drive. This development caused the government last week to announce its decision to probe all revenue generating agencies of the federation. In view of the present poor revenue from crude oil sales, the decision was considered by many as timely if not overdue.
Investigations
Nigerian Pilot found out that many federal government agencies such as NIMASA, NCAA, NAMA, NCS, NIS, NDLEA, FAAN, NPA receive revenue in foreign currencies but some of them change the money in the black market and remit Naira to the treasury; with the amount remitted usually far below the amount generated. The difference is shared among the management staff. Also alleged large-scale sabotage involving top managers of the agencies is making nonsense of the nation’s drive to fiscal discipline.
Before the coming of the present NNPC leadership, the Crude Oil Marketing Department, COMD of the NNPC, this newspaper found, out was a chief culprit in this regard. Apart from the general belief that NNPC is a major source of revenue to government, the COMD is the main cash cow. But its operations are not made public.
For instance, in the third quarter of last year, the redeployment of the head of its crude oil marketing division, Gbenga Komolafe, was announced by the NNPC and his immediate subordinate was seconded to succeed him. Although NNPC’s statement announcing his replacement fell short of stating so, stakeholders in the oil and gas sector concluded that the development was not unconnected with the report of the Natural Resource Governance Institute (NRGI) released days earlier which disclosed that over $32 billion oil revenue was lost to NNPC’s mismanagement of Domestic Crude Allocation (DCA), opaque revenue retention practices and corruption-ridden oil-for-product swap agreements.
The report covered a 10-year period while Mr. Komolafe was only appointed to the crude oil marketing division in which the former GGM served for only one year.
Indeed, the GMD, Ibe Kachikwu, shortly after he assumed office last year, admitted that things had been done inappropriately in the corporation. Said he:“Things have been done wrongly and things need to be done differently. We are doing a lot of work in terms of repositioning, restructuring, getting the right personnel in key places and setting a culture of accountability and service delivery so that the new NNPC that you are going to see will be a different institution altogether.”
According to one expert, “the NRGI report offered a deep, independent analysis of how NNPC sells its oil, and found that the national oil company’s discretionary spending from domestic crude oil sale revenues has skyrocketed, exceeding $6billion a year for the 2011 to 2013 period (i.e. over $18 billion in three years).”

The document, which was published before the coming of the present leadership led by Ibe Kachikwu, stated that NNPC’s approach to oil sales has remained riddled with corruption largely because of its inability to either develop its own commercial or operational capacities, or facilitate the growth of the sector through external investment.
Experts told Nigerian Pilot that the foregoing need not be if revenue agencies and departments like COMD are given appropriate target and remit all collected revenues.
Last October, the federal government raised the alarm over what it described as rip-off by revenue generating agencies in the process of remitting revenues to government vault. It therefore put measure in place to audit these agencies. The move by the federal government to audit the revenue-generating agencies was informed by the need to curtail corruption as the diversion of federally collected revenue is believed to be taking a huge toll on the finances of government.
Besides, it was found out that for over10 years, COMD has never been audited. The forensic audit of NNPC by KPMG last year did not include the CMOD. According to NNPC egg-heads, “to probe COMD will be an endless journey because most documents of transactions in that department are usually destroyed for reasons outsiders don’t really know.”
In calling for a special audit of the department, experts suggest that allocations of crude oil to top and well connected Nigerians including executives of NNPC from 2009 through May 2015 must be investigated alongside revenues from such transactions.
To do this efficiently, the experts said the list of contracts being serviced as well as the interests of joint venture stakeholders who are still not well known must be investigated.
While they argue that the Auditor General of the Federation must conduct the foregoing special audit of COMD, the experts task the Accountant General to conduct treasury inspection of the Division and come up reports of crude produced over the period as well as quantity sold and revenue remitted to see if they tally.
The experts spoken to, also called for parliamentary inquest into COMD believed to be the richest arm of NNPC even as they alleged that some NNPC executives own refineries offshore while others are key players in the downstream sector.
“That is a way out for government and Nigerians to know why it is difficult for Nigeria to determine barrels of crude produced via the JVCs. There is a grand conspiracy there to rip off the country revenue-wise on a very regular basis,” said a consultant in the oil and gas sector.
However, Nigerian Pilot gathered that the present leadership under Ibe Kachikwu as both the NNPC GMD and Honourable minister of state, Petroleum resources, has successfully blocked all the identified leakages including scraping the age long crude oil swap deals. bidding process is now done in a transparent and open manner, televised LIVE and winners selected. Other reforms include revitalizing the refineries, resuscitating moribund firms and agencies, enhanced staff welfare, establishment of anti-corruption desk in all the subsidiaries and the corporation, publication of monthly statement of accounts including crude oil production amongst other reforms, some still ongoing.
On other things the NNPC under the present leadership is doing, Kachikwu has this to say:“The whole idea is to go back to being able to look at your appraisals; and how well have you done in the job? If you have done very well, how do we elevate you to a position where you can offer more service? If you have not done well enough, we can retrain you and if you have not done well enough and there is no possibility of retraining you, we will let you go.

“The NNPC is not a public service. It is a corporation and we run like a company generating money for the people of Nigeria. And so, that whole concept of ‘anything goes’ should stop. And this is the first stage of that whole process.”, he stated. In a bid to move the corporation forward, the NNPC has adopted what it described as “20-fixes” with which it hopes to reform its operations, guarantee profitability and perhaps run a transparent national oil company. NNPC through the “20-fixes” which are embedded in five cardinal business objectives that it intends to pursue, plans to amongst other initiatives, attain zero tolerance for corruption, restructure its major subsidiaries as well as enhance probity in its operations across board. The corporation’s “20-fixes” also include its intentions to restructure Joint Venture funding and reduce cash call demands; improve retail profitability; deploy and attract focused investments; expand crude oil marketing and generate electricity profitably. Also to be done within the initiative are, reduction and audit of running costs; restructuring of corporate centres and staff; renegotiation of existing contracts including Production Sharing Contracts (PSC); streamlining of subsidy management as well as improve security of the country’s critical petroleum pipelines. The corporation will also restructure its refining business; improve on its use of information technology for its businesses and demand for top-notch service performance from all its staff. Nigerian Pilot recalls that immediate past director-general, budget office Bright Okogu, had regretted that revenue-generating agencies practically spent a larger chunk of what they generated by upping their expenditure to match their revenue. That was fallout of findings when he was still in office. Said he: “We have uncovered that some relevant revenue generating agencies, anytime there is increase in the size of revenue collection, their expenditure went up. In 2009, we found that a particular agency generated N85 billion but spent 83.2 billion. In 2010, I decided to conduct a study to a particular agency which generated N1.7 billion but jerked up the spending to N1 billion. That was why we sent a letter to the President that we need to change the pattern”. The presidency then agreed and issued a directive that revenue-generating agencies must remit at least 25 per cent of their gross revenue while basing their budget on the balance after remittance. However, it is still believed that revenue targets set for most government agencies were peanuts compared to what they actually generated. For instance, the Nigeria Customs Service, NCS in 2010, got a revenue target of N561 billion; Federal Inland Revenue Services, FIRS, in 2008, had a set target of N2.27 trillion. Their targets are said to be peanuts when compared to the actual earning capacity of these agencies. -

Source: http://nigerianpilot.com/fraud-revenue-agencies-fleecing-nigeria-dry/#.dpuf

Change is here.

The March to the gradual killing of Corruption in Nigeria, is positively moving forward. We well get there, and as regards the report by the Newspaper, it will be hard to mostly trace those stolen fund.

But, what we can do is to block all the loopholes, so it does not happen again in future. A relevant example, is the TSA account, which has generally stopped a lot of thieves from stealing Nigeria Blind, and thus making the Banks complain because that revenue generator for them has being blocked.

Buhari is working.

Buhari should take this case to world court!

PMB is the best thing to happen to Nigeria

veraponpo:

PMB is the best thing to happen to Nigeria

GBAM!!!

Visionless and unproductive politician... Time to sow and diversify, they were busy eating...

Nigerian Pilot found out that many federal government agencies such as NIMASA, NCAA, NAMA, NCS, NIS, NDLEA, FAAN, NPA receive revenue in foreign currencies but some of them change the money in the black market and remit Naira to the treasury; with the amount remitted usually far below the amount generated. The difference is shared among the management staff. Also alleged large-scale sabotage involving top managers

Okokobiok.

PDP messed Nigeria up
Funny how same Nigerians defend it

Wailers will come here to tell you this is pure propaganda/ media trial. God bless Nigerians for voting out that useless dead and corrupted party outta power

Wow ...I really don't knw how people steal in millions & billions and still have the conscience to walk around Nigeria seeing beggars on the street, dilapidated roads, hospitals & schools

mrvitalis:
PDP messed Nigeria up
Funny how same Nigerians defend it

They do that outta hatred they got for other tribes

With the scale of corruption is it any wonder that we are in this kind of situation we find ourselves in? It is a good thing the war on corruption is hitting hard on these thieves.

veraponpo:

PMB is the best thing to happen to Nigeria

You can say that once again man!!! This are the atrocities committed already which they feared would hunt them that was why they tried all they could to stop PMB from becoming the president but God decided to deliver Nigerians

Next

mrvitalis:
PDP messed Nigeria up
Funny how same Nigerians defend it

PDP did not mess up Nigeria. Nigerians messed up Nigeria

vedaxcool:
With the scale of corruption is it any wonder that we are in this kind of situation we find ourselves in? It is a good thing the war on corruption is hitting hard on these thieves.

They have tried all they could to frustrate the fight against corruption but it's not working, let's see if Metuh will return the 400M or continue eating his 10 sets of beans and 5cups of water with smiles

just some noise making, beer parlor gists, no substantial claims. How can you just wake up and say Obasanjo stole $36b without saying when and where? Nairaland mods should delete threads like this.

when will crude oil price crash to $5 per barel

Epic!

God have mercy on us.

Mehn this is serious corruption has really eaten deep into our society nd yet na we be the most religious people on earth wonder Wetin we dey learn for our churches nd mosque plus our native doctor house

I really applaud PMB's fight against corruption. .I hope they make more exposures. .. People can't keep stealing billions of Naira meant for the masses and have eyes to sleep at night....

Looking forward to a better Nigeria where corruption is at its lowest point! , Amen...

goodlifehyd:
They have tried all they could to frustrate the fight against corruption but it's not working, let's see if Metuh will return the 400M or continue eating his 10 sets of beans and 5cups of water with smiles

lol at the 5 cups of water

Nigeria we hail thee

Shout up,this one will come PDP MISSED up Nigeria who are this PDP were are they,a Governor that recieved trillion to develope his state all we could see uncompleted monorail project.abeg live matters for all this APC zumbies

aa

Jonathan should be ashamed of himself

Epic

A total overhaul of Nigeria public coperation financial processes should be pursued by Buhari at all cost, TSA is the first step in the right direction, more of similar changes is welcome.

The masses are now paying the price for the corruption of some greedy few. And those pursuing this change are well fed.

You can't fight corruption on an empty stomach

goodlifehyd:
Wailers will come here to tell you this is pure propaganda/ media trial. God bless Nigerians for voting out that useless dead and corrupted party outta power

HungerBAD:
Change is here.

The March to the gradual killing of Corruption in Nigeria, is positively moving forward. We well get there, and as regards the report by the Newspaper, it will be hard to mostly trace those stolen fund.

But, what we can do is to block all the loopholes, so it does not happen again in future. A relevant example, is the TSA account, which has generally stopped a lot of thieves from stealing Nigeria Blind, and thus making the Banks complain because that revenue generator for them as being blocked.

Buhari is working.

Did you miss the other thread where Buhari led government has been accused of hiking budget to be spent in aso villa from 580 to 1.7 billion or you intentionally skipped that thread?