₦airaland Forum

Sack Of NNPC Leadership: A Dance Around The Real Problem By Ifeanyi Izeze JUL 03, 2012

The Nigerian National Petroleum Corporation (NNPC) deserves a Nobel laurel for its record in churning out Group Managing Directors as compared to apex national oil concerns of other oil producing countries particularly those of the OPEC cartel. Is it not record-breaking that in the last 10 years the NNPC produced seven Group Managing Directors from Dr. Jackson Gaius-Obaseki to Mr. Andrew Yakubu?

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The Nigerian National Petroleum Corporation (NNPC) deserves a Nobel laurel for its record in churning out Group Managing Directors as compared to apex national oil concerns of other oil producing countries particularly those of the OPEC cartel. Is it not record-breaking that in the last 10 years the NNPC produced seven Group Managing Directors from Dr. Jackson Gaius-Obaseki to Mr. Andrew Yakubu?

However, if President Goodluck Jonathan expected applause for the sack of the entire leadership of the Nigerian National Petroleum Corporation (NNPC), obviously he is not going to get it, at least from those who know where the real problems of the nation’s apex oil company comes from. The President’s action was a mere naked ‘owigiri dance’ because he deliberately failed to properly situate/address the root of the gross financial malfeasance in the NNPC which to a great extent, was not the fault of the top management though they cannot be completely extricated from complicity in the rot.

According to a statement by the Presidential spokesman, Dr. Reuben Abati, the sack was to further strengthen the ongoing reforms and transformation of the petroleum sector. As said, “The action of the President was in furtherance of efforts to achieve greater transparency and accountability in the oil and gas sector.”

To a great extent, the NNPC was the architect of its misfortunes. The top Management of the corporation especially within the last 14 years allowed the Presidency to use them to ridicule the organisation’s efforts at being anything near a credible and serious-minded national oil interest. This is the truth.

No doubt that since the NNPC was established in 1977 to oversee the management and operation of the nation’s oil industry, it had not only failed to establish itself as an active oil company in business to make profit, it also failed in establishing administrative structures that is free from government manipulations. And this led to the 100 percent hijack of the day-to-day financial and business decisions- making muscles of the corporation by the Presidency under the pretence of correcting the fraud and culture of corruption often associated with the organisation. The presidency of Chief Olusegun Obasanjo started this unholy relationship and ever since, any sitting administration sees the NNPC as a cash cow to be milked, and in most times, in unsustainable manners.

However, if we are now ready to redress the fraud and corruption culture in the NNPC system, the approach must be holistic if it’s a sincere one. All these years, we have majorly dwelt on the bad eggs in the system ignoring the hen that has continued to lay these bad eggs. It is time we place the NNPC problem in proper perspective.

The Presidency’s interference in the operations of the NNPC, especially in money matters has done more harm and made the corporation completely lose its credibility in business transactions both at home and abroad. It is not a Jonathan thing at all. It was instituted by King Obasanjo when he reigned as the sole administrator of the entire oil and gas sector using even NNPC funds to run his Peoples Democratic Party activities and campaigns. That was why we had people like the former PDP Chairman heading the “lucrative” cow -milking conscription- the PPPRA. We had what happened during the fight between Obasanjo and his deputy Atiku over how the NNPC was used for purposes other than our collective national interests. And it has been so through Yar’adua and now to Jonathan- nothing has changed.......

Any performance or transparency rating/assessment of the NNPC would be out rightly biased and grossly incomplete if it does not take due consideration of the negative effects of the undue Presidency’s interferences in the activities of the corporation.

......Is it no interesting that everybody in the NNPC who should refund or at least tell us how to trace and retrieve the stolen fuel subsidy money is being sacked in an ‘operation sweep’ style. Who is going to be held responsible for the monumental fraud in the fuel subsidy scam? How is the stolen billions going to be retrieved from the alleged culprits if actually those NNPC officials were the ones responsible for the fraud? Is it not obvious that somebody or an office that was actually responsible, maybe by proxy, wants to clean-up/cover something?

In the past few months, the nation has spent billions of naira on the refineries’ revamp project working to bring back the refineries. And there have been some results to this effect no matter how small, as the Kaduna and Port Harcourt Refineries have started working progressively towards their installed capacities from their present disabled setting. Now we have sacked the people in charge of this operation. So are we going to start all over again or accept that nothing is going to come out from the exercise after the huge resources already committed to the exercise? Is it deliberate that the first causality of the President’s decision to sack the entire leadership of the NNPC is definitely going to be the ongoing Turn Around Maintenance (TAM) and revamp of the four existing name-plate refineries intended to put them back on stream to operate at least somewhere near acceptable capacities? Let’s watch and see.

http://preview.saharareporters.com/2012/07/03/sack-nnpc-leadership-dance-around-real-problem-ifeanyi-izeze

.... So blanket condemnation of the NNPC as inefficient and fraud infested may not be enough in our genuine quest to unravel the demon that has continued to hold the corporation moribund. Every concerned Nigerian should bother to ask where and how the NNPC gets the funds to run its operations including the joint venture obligations. Does the Corporation really have anything like its own budget in the strict sense of the term?

Any performance or transparency rating/assessment of the NNPC would be out rightly biased and grossly incomplete if it does not take due consideration of the negative effects of the undue Presidency’s interferences in the activities of the corporation.

Ask me, and I would say that the parasitic marriage of convenience between the Presidency and the NNPC be dissolved immediately rather than re-packaging it under the guise of reform and restructuring for transparency and accountability.

There is no amount of restructuring that would make NNPC corruption/fraud-free and profit-driven, if the corporation continues to take direct instructions from the Presidency, or even any other government agency that is not schooled in the highly technical oil and gas exploration and production business, even the marketing of the crude and products. The Presidency should completely hands- off the NNPC so that the corporation can function like a commercial profit-driven business outfit.

http://preview.saharareporters.com/2012/07/03/sack-nnpc-leadership-dance-around-real-problem-ifeanyi-izeze

Olufemiolaolu:
Do u think oil theft happened without govt of clueless turning a blind 2 it. Y has it suddenly stopped now? Has d all d militant suddenly gone on extinction right?

sevule:
@laudate

I have read most of your posts and I really have no idea why you are up in arms about this early retirement. You asked why he is retiring staff that were meant to retire in December 2016 now, but the question is WHY SHOULDN'T THEY BE RETIRED? What value are they really adding?
Are you aware of the billions that would be saved by retiring them now rather than waiting till December 2016?

This is what is called RESTRUCTURING and as far as I am concerned more deadwood should be cut out from NNPC. We all know that the NNPC is an incredibly inefficient and humongous bureaucracy and the place NEEDS TO BE SANITIZED!!

As far as i am concerned the MD is actually being nice by retiring only a thousand people. Change is painful but it is necessary. Obviously the MD is trying to run NNPC like a limited liability company and he OUGHT TO BE COMMENDED not condemned. It really blows my mind that we Nigerians say we want change but when the change starts to happen we start complaining. Do we really want an NNPC that has no idea how much crude oil Nigeria is generating? An NNPC that refuses that refuses to remit funds from sale of crude oil to the federal account? An NNPC that has not been audited for almost 10 years? Is this what we really want?

Besides all the people that were retired early would be paid their full benefits so what exactly is the problem?

Olufemiolaolu:
Missing funds, crude oil swap, oil theft &
shady subsidy scams re evidences of incompetence ok

Governors and Oil Industry Cash Calls APR 02, 2010

The Forum of State Governors rose from a meeting a fortnight ago expressing their dismay at the rising level of cash calls paid to Joint Venture Companies (JVCs) from the Federation account. The exasperation of the Governors stemmed from the fact that cash calls being akin to a first charge on the Federation revenue need to be kept to a level that leave a fair amount of funds in the kitty to be shared amongst the three tiers of government.
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....There have been concerns across various stakeholder groups in the Nigeria oil and gas industry that Nigeria is not optimising its investments in the oil sector, that the costs of production in Nigeria exceed the costs associated with similar projects in comparable regions and that there is an insufficient basis on which discrepancies, differentials, meaningful analytical insights can be understood. These concerns are fundamental. The Trade Union Congress, from the pivotal positions that our members hold in the oil and gas industry, given our knowledge from within are even more concerned.

The audit of the oil and gas industry that was carried out by the Nigeria Extractive Industry Transparency International (NEITI) for 1999-2004, which reports are available on their website showed that the problem with cash calls is not a confirmation of what cash calls where paid and received as these “on the surface” receipts and payments were fully reconciled as between the Central Bank of Nigeria (CBN), Nigeria National Petroleum Corporation (NNPC) and the JVCs where fully agreed. The problem, if one reads between the lines seemed to summarise into

· Concern that upstream companies (JVCs and PSCs) are gold-plating their expenditure (both capital and revenue), with impacts on quantification of sums paid to them in cash calls on the one hand and what gets into the Federation account by way of revenue from petroleum profit tax and similar government income elements on the other. This double jeopardy punch of paying more than might have been necessary for capital and revenue items as well as reducing what income gets into the government purse is perhaps what the Governors are worried about!

· Concomitant to the above is whether the price of the goods/services arising from contracts and procurement are comparable with the market price of similar goods/services at a similar time.

· Whether a comparison of actual costs incurred in Nigeria between JVCs and Production Sharing Contracts (PSCs) which together are responsible for over 98% oil and gas production and the equivalent level of costs actually compare with each other in terms of cost efficiency and effectiveness.

· Most importantly, whether Nigeria’s costs are out of line with acceptable international levels.

· Whether planned versus actual processes on development of fields, facilities and projects can be subjected to any standard level of analysis to understand and determine the related rates of return, efficiency and productivity such that can give comfort to stakeholders like the Governors whether or not they are making wise investments.

· In recent time, the oil industry in the argument that the National Assembly’s reduction of annual cash call allocation in the budget have resorted to alternative financing of some capital projects, there is uncertainty about the quantitative impact of alternative financing on costs, cost of capital and government revenue generally.

· Whether a fair opportunity is being given to Nigerians to be engaged in the industry either as employees or contractors such that local content of input and earned income is enhanced.

Government and NNPC have agonized during cash call negotiation sessions that they were not comfortable with the rising trend of operating costs in Nigeria, compared to reducing trends elsewhere together with concerns about procurement processes of the JVCs and the PSCs. These twin issues and the concerns that they raise in the minds of the people have been compounded by the fact that NNPC does not have standard metrics established within a performance Measurement and Benchmarking mechanism with which to challenge and drive the industry towards efficiency, effectiveness and a higher standard.

With regards to all the above the players in the oil and gas industry have tried to make the case that as a result of the challenges in the Niger Delta where they operate, a cost premium has to be paid to cover the inherent risks. Be that as it may, there is a general belief that the amounts currently being spent on cash calls can achieve a higher result than it currently does. Alternatively, the current level of operations or achievements can be met with reduced cash calls. Herein lies the challenge that the players in the sector should meet. It is a direct call that they need to be more efficient and effective by aiming for enhanced economy.

They need to be seen very transparently achieving more with less. This calls for the need for them to plug all leakages and eliminate waste. It also calls for the application of best practice processes such that the players begin to reasonable benchmark against efficient players in the industry internationally.

To make matters worse, we know for certain that the oil and gas companies are supposed to maintain a uniform accounting system that is supervised by NNPC. This standardization is supposed to help in ensuring accurate records and books of accounts are maintained by Joint Venture and PSC operators, support uniformity of financial and cost accounting and reporting and thus enhance transparency and value for money.

Specifically, this standard accounting format is meant to ensure that a uniform format for accumulating and reporting costs are applied using a chart of accounts set out by NNPC.

However, it is doubtful if the players in the industry comply with these rules or strictly adhere to them. It has been argued by industry accounting experts that companies keep their records in accordance with their preferred systems and find ways to pay only “lip service” to a standard accounting and reporting to fulfill “all righteousness” with the directives of NNPC.

Read the rest of the article here: http://saharareporters.com/2010/04/02/governors-and-oil-industry-cash-calls

pisca:
This is no scam, all documents are available on request. Thanks

Bodlade:
Misquoting me

Bodlade:
You need to get letter from your pastor as a redeem member. This is in order to check against wrong people becoming resident on camp. This is not an act of discrimination as some people have abused the privilege initially given to everyone and in order to avoid repetition of such abuse.

cuteboy2:
Don't have ur time, man

If you have been penciled for retrenchment and u feel you are not ready to go, file a complaint at Public Complaints Commission, brief your lawyer, talk to your senator, or write to Buhari. Do something positive man to fight your case following the due process that you love so much.

Go and look at other National Oil Companies like Petronas, Aramco, Qatar Petroleum, ADNOC, Pemex, Sonangol, Sonantrach, to name few. Then you will appreciate how much damage NNPC has wrecked in Nigeria. They should all hide their faces in shame.

Thousands of Nigerians are daily flocking to Saudi Aramco and Qatar Petroleum to look for jobs that NNPC could easily have created here in Nigeria. Yet they still have mouth to talk. If I hear phim from any chop-chop Union ehn...... The clean up must continue. We want a brand new NNPC.

If you have been thrown out and you feel you are still good go to one of the new Independents like Seplat or Aramco and proof yourself there.

Why are you disturbing us here?

cuteboy2:
Good advice..

This @laudate fellow has been disturbing our ear drums with his wailing and lamentations.

Few weeks ago Shell announced they will let go 6500. Nobody heard hues and wailing. As a matter of fact retrenchment has been a recurring theme in Shell since 1998.

That NNPC stinks is known by all. Go and find out how much NNPC is owing their JV operators (ExxonMobil, chevron, Total, She'll, Addai, etc), in unpaid cash calls you will weep. On top of this they refuse to remit the proceeds from sale of their 60% equity oil to government as required by law. NNPC has practically crippled the oil industry making it impossible for operators to fund new investment and execute annual work programs and budgets agreed with the same NNPC.

All these was going on in an Era when oil price was sky high at over $100/barrel. So what happened to oil the money?

Dr Kachickwu is even lenient, most of those bad eggs should be prosecuted and jailed for economic sabotage.

Proof my foot

abbakacici:
NNPC will have 2 phases of massive restructuring, first one is actually massive retirement because 80 percent people sack are about to reach retirement age while phases 2 is massive sacking using performance review

pisca:
please, for more information, you can call Abiodun on : 08033925730

Fastfingers:
I don't engage in online arguments with a blind dunce. Go and read my previous comment. And please polish your English. It's basic proof of how dumb you are.

kishimi8:
OK had to come in, I believe the article said retirement right, they have already spent the 35 years allowed, thats why they had to go!!!!

obailala:
So because it was not mentioned in the article, you have assumed the rest?.... C'mon, it's not everything they have to mention to you.

obailala:
Don't you guys think you 'might' be the ones prematurely jumping into conclusions?.... @kay9, you claim the GMD hasn't been in office for up to 2 weeks hence it is too early for him to make such a decision. @Laudate claims due process may have not been followed. From your arguments, the both of you have instantly concluded that this retrenchment exercise is a brainchild of the new GMD. Have you imagined that this could be a process that has been on for a long time even before the appointment of Mr Kachi?... Have you both given it a thought that a thorough investigation may have been conducted in past and this recommendation may have just been lying on the desk of the previous GMD and president without action?...

I personally do not know the details, but I'm almost sure this exercise is not totally the handwork of the new GMD; the new GMD may just be a man of hard balls who's just implementing the recommendations of an investigative panel which was concluded in the past. Let's seek more information before we dive into the arguments.

FUCKINGNIGAZ:
LAUDATE damburuba, dambanza sege waka yafada. you are a stupid Southerner worker, I hereby command you to be subservient to Buhari and all his northern cohort walahi. Inshalla u shall learn that the north shall make Nigeria great again. I will search you i.p. address and when I catch you I will turn you into suya and sell to your canibal southern brothers. walahi.

Setaje:
... The biggest problem nnpc has is government involvement. The other day, El rufai said a nnpc should be scraped. Ignoramus were saying yes it should. Bla bla bla. I have it on good authority that El rufai said that because his brother was denied a slot to be importing fuel. His brother is not an oil marketer but he wanted to use his influence for his brother and he was refused. Days later he came out to say nnpc should be scrapped.

Any rich and influential man that knows his onus should never venture into Nigerian politics because they will rubbish u the way they have rubbished okonjo. Anybody that wants to run Nigeria effectively must come wiv clean hands. If he thinks he can install his family members there. Everything is being documented. I know nnpc like a plate of rice.

FUCKINGNIGAZ:
FVCK Y'ALL NIGAZ, have you so soon forgotten the glories and successes of past military regimes and your Northern masters?
BORN TO RULE FOREVER. Notherners are your natural Masters, obey and submit to their authority, only they can save you all.
may ALLAH bless Nigeria. Nagode!

WIZGUY69:
Yes of course:
because you see me on nairaland doesn't mean I don't have work to do.
you should be happy that an hon. is replying your mentions.
ingrate!

kay9:
I don't mean to defend laudate's demands for "proof", but the very fact that the new GMD hasn't even been in office for up to TWO WEEKS and already plans to sack 1,000 people... bros me, something is NOT being properly done.

Yes, NNPC is over-bloated with lots of "white elephant" personnel, but you can't tell me that in just a little over 1 week, Mr. Kachi has done a comprehensive appraisal of all concerned staff AND identified all those that are under-performing. C'mon, let's be realistic here. It was also mentioned that people due for retirement by December 2016 will be laid off as well. Like seriously?? Eziokwu?? Please someone should inform the new boss that doing that is actually a crime, and that the laid-off workers will have a VERY solid case in court. So unless his real motive is to sink the NNPC into an even bigger mess, he should re-think his strategies. And what about disengagement packages? Or, does he intend to sack and continue round 2 in settlement courts?

Anything worth doing is worth doing well; the NNPC needs downsizing, yes, but it must be done right - fairly, equitably - not by a knee-jerk pronouncement.

kaeforum:
The Corporation is being restructured and not liquidated, is good , How can someone stay 35yrs ina place and not be able to set up a business to employ other people imagine, where is his/her contribution, the excessive stay in paid employment is the reason we have so many jobless youths in the country, these guys dont do anything they just go to work and sleep.

Say no to work till you die policy.

PLSHELEP:
Why it's good to read before making a comment. The 1000 to be sacked are people approaching retirement with one and a half years left for service. And for another of your question, NNPC employs 9500 staffs... And before you start asking numerous questions like you know more than these people doing the restructuring, ask yourself if you know more than them and if they've also got brains like you do or perhaps better brains. Don't just assume they also don't take your concerns into consideration, also maybe you want to look at the achievements of the new GMD to reassure yourself that he's probably of the right track.

Eruditor:
Laudate,

I am not sure you read the article well. Or maybe your primordial dislike for his background or ideologies is tainting your understanding of some of his actions.

The article said 2 things.

1. About 800 of the 1000 were already on their way out due to AGE and years of service.

2. That he is not responsible for the lower cadre retrenchments. He only handled that of the GEDs, GGMs and GMs and he has delegated the responsibility of weeding out redundant, unproductive, overaged and overworked staff to those below him.

It is also important to take note that there is an ongoing recruitment process for EH and GT that I am sure will be used to replace some of the redundant workers in due time.

There is something called professional experience, institutional memory etc. All these will be lost in a single day, because some clowns sat down and decided to lay off 1,000 people in one fell swoop instead of taking time out to conduct a thorough investigation, then gradually phase out those who are not pulling their weight, within the system. A well-structured handover and succession process would then be instituted, as these people gradually wind down, and leave the system. Was that done in this case?? Kindly let us know.

oreos:
Dear Puma, did you per chance read the whole article before jumping into conclusion?

refreshrate:
You're stressing yourself explaining this?
You think it's everybody that has sense? Sometimes it's best to just look at them. This is one of such times.