EXCLUSIVE: Why Buhari sacked NNPC board

By Amako Nneji June 26, 2015 20:35

EXCLUSIVE: Why Buhari sacked NNPC board

President Muhammadu Buhari on Friday through the Head of Service of the Federation, HoS, Danladi Kifasi sacked the board of the National Petroleum Co-operation, NNPC, with immediate effect.

The Head of Service who in a statement dated June 26, 2015 stated that the President thanked members of the dissolved board for their services to the nation.

Before now, the Senate had on Wednesday June 24, 2015 summoned the leadership of the NNPC to appear before it so as to examine the conditions of the nation’s four refineries.

Investigation revealed that the NNPC has often been seen by President Buhari as the goose that lays the golden egg but allegedly riddled with corruption and oil cabals who had held the nation to ransom.

Buhari who was one time the head of the NNPC during the military era of Former President Olusegun Obasanjo had vowed during his 2015 presidential election campaign that he would probe the oil sector.

During the campaigns, he promised to probe the $20 billion alleged to be missing from the coffers of the oil giant by Emir of Kano Muhammed Sanusi, a claim he made when he was the governor of Central Bank of Nigeria.

Former President Goodluck Jonathan sacked him from the CBN for the claim which he considered untrue and embarrassing to his Government because the figures he was reeling out were inconsistent.

Speaking in Yola immediately after the presidential election, Buhari said: “I heard that some people have started refunding money, but I will not believe until I see it.

“His royal highness, the Emir of Kano, Sanusi Lamido Sanusi was removed from the Central Bank because he said that about $20 billion was missing, instead of the Government to investigate the matter, they refused, instead they sacked him.

“He has already written a detail report on it, the incoming government will not ignore it, even though we have promised to draw a line, but $20 billion is too big to ignore.

“This is Nigerian money and it must be investigated.”

According to an All Progressives Congress, APC, source, the new administration of Buhari will set the ball rolling by sanitizing the oil sector by sacking and replacing the top management of the Nigeria National Petroleum Commission, NNPC, before restructuring the oil company. Then it will investigate its accounts to restore credibility.

A bill will be drafted to break the NNPC into four entities, as already prescribed in the latest PIB draft. But it will also, crucially, remove the oil Minister from the NNPC’s board of directors to curb political interference.

One APC source also told Reuters that more generally; the petroleum Minister’s current powers would be heavily trimmed.

Oil and gas will have separate companies for upstream, with a third covering pipelines and refining, and a fourth will be an inspectorate.

According to sources that confided on Reuters, the issue of fiscal terms, seen as crucial by the industry, will have to wait on current thinking about oil and gas policies for Africa’s leading producer

Senator Bukola Saraki had on April 16 told Journalists that Buhari would do an overhaul of the oil sector in order to address structural issues.

“A more transparent NNPC is needed with reasonable accounting,” he said.

A string of multibillion dollar oil corruption scandals tainted the NNPC and other bodies that handled the oil sector.

By contrast, Buhari was seen as one of the few Nigerian leaders to have cracked down on corruption during his military rule in 1983-1985.

“The worry is that there’s going to be a lot of time wasted in witch-hunting…That could take a year in which nothing else will happen,” said a source from the oil and gas sector.

APC leader Bola Tinubu, whose support was instrumental in Buhari’s victory and wields huge influence, told Reuters a transitional committee would be set up.

Jonathan’s administration re-drafted a Petroleum Industry Bill , PIB, in 2012 that had been in the works for a decade.

The PIB was meant to change everything from fiscal terms to overhauling the NNPC, environmental rules and revenue sharing, but its comprehensive nature caused disputes between lawmakers.

Yet the main thing the oil companies were worried about was tax. The bill proposes 20 percent tax on offshore projects and 50 percent for onshore. Shell, Exxon and other majors had all complained publicly that the terms are unfair, given the risk associated with operating in Nigeria.

Uncertainty over the fiscal terms of the bill have been holding back billions of dollars of investment, especially into capital-intensive deepwater offshore, leading some to propose the bill be broken up into several pieces debated separately.

“It doesn’t need to be an omnibus, you can take things piecemeal,” one APC source said.