Oil and gas industry across the world is often perceived to be elitist with its stakeholders mostly seen as members of the upper class either operating as workers, contractors with people in Government overseeing its activities.
The multi-trillion dollar industry for decades has contributed to the prosperity and growth of oil producing nations, thereby helping to raise the standards of living of citizens through improved infrastructure like good roads, hospitals, world class education standards at all levels.
But, despite the capacity of these natural resources to bring about improved living conditions for citizens the same cannot be said of Nigeria whose middle and lower class have continued to question how oil wealth is being distributed in the country.
On several occasions, human right groups, Civil Society Organisations , National Association of Nigerian Students (NANS), Nigerian Extractive Industry Transparency Initiative(NEITI), state government and the National Assembly have had cause at one time or the other to allege mismanagement of the country’s oil wealth.
In 2014, the Socio-Economic Rights and Accountability Project (SERAP) urged the Economic and Financial Crimes Commission (EFCC) to “urgently begin a thorough, transparent and effective investigation into allegations into how $20 billion oil money allegedly got missing from the account of the Nigerian National Petroleum Corporation (NNPC).”
The petition was hinged on the allegation by the former Governor of the Central Bank of Nigeria (CBN), Lamido Sanusi, that “NNPC was operating a racket through which the federation has been losing billions of dollars annually.” Sanusi made the allegation at the resumed Senate hearing on the matter, insisting that the NNPC has yet to account for $20 billion (equivalent N3.25 trillion) from the total $67 billion oil sales receipts from January 2012 to July 2013. It was for this reason and many more that the Group Managing Director of the NNPC, Mallam Mele Kyari, upon assumption of office July 8, 2019, promised to run a transparent and accountable NNPC with a firm pledge to open the books of the Corporation to scrutiny anchored on his Transparency, Accountability, Performance Excellence (TAPE) vision.
However, Kyari on June 11, 2019, kept that promise when for the first time since it creation NNPC published its comprehensive 2018 Audited Financial Statements (AFS), in compliance with President Muhammadu Buhari’s commitment to accountability and transparency.
Indeed, stakeholders have described the 2018 NNPC AFS as a game changer for the industry, saying it will further prove to investors that allegation of opaqueness associated with the Corporation have been disproved while opening up the industry for fresh Foreign Direct Investment(FDI).
The Petroleum products’ supplies Publication
Kyari, had last October said the oil firm was set to commence the publication of details of its products’ supplies.
Beyond publishing its monthly financial and operations reports, the NNPC GMD said plans were afoot to make public all petroleum products supply transactions across the country to further deepen transparency in the system.
Kyari was quoted in a statement as saying, “We will continue to be transparent; we will do more than you can ever imagine in terms of transparency.
“We will not just publish our financial records, but very soon, we will publish more things that Nigerians need to know, particularly details of petroleum products supply and distribution, which is an area most people don’t understand.”
He said the Corporation stands to gain more in terms of reputation and goodwill from being transparent, adding that trust in business required corresponding responsibility of accountability to all stakeholders.
“You lose nothing by being accountable and transparent, and the combination of the two will enable you to have a good relationship with your stakeholders and ultimately lead you to excellent performance,” Kyari said.
Already stakeholders have commended the 2018 AFS for its full disclosures. The 2018 NNPC AFS is a full disclosure of its books involving those of 19 Strategic Business Units (SBUs) and a Corporate Services Unit (CSUs).
It has equally affirmed its 2019 AFS was already being prepared and expected to be ready in a couple of months.
According to the Executive Director of the global Extractive Industries Transparency International’s (EITI), Mr. Mark Robinson, the development came at a record time, as NNPC has set a new standard of reporting. Robinson’s commendation of NNPC was posted on the global transparency body’s official tweeter handle.
NEITI equally described as laudable, its decision to make public its audited accounts on its website for the first time in history noting that the development fulfilled a pledge by Mr. Mele Kyari, to the management of NEITI at a meeting on August 6, 2019, where he reiterated on November 25, 2019 during the official visit to Nigeria of Robinson.
It recalled that during the August 2019 advocacy meeting, the NEITI management had urged Kyari to consider demonstrating his espoused commitment to transparency by making public the Corporation’s audited accounts, a request Kyari acceded to on the spot.
NEITI Executive Secretary, Mr. Waziri Adio, said that the organisation welcomed the eventual fulfillment of the pledge and obligation, saying given NNPC’s antecedents and its prominent role in the sector and in the country, the publication of its audited accounts was positive, signaling more openness for the oil and gas sector and for Nigeria.” He stated that the development, when combined with the monthly reports that NNPC started publishing in 2016, the publication of the AFS marks a sea-change for NNPC which was considered opaque in the past, while admonishing it to make full disclosure of its books a routine practice and to mainstream transparency into all facets of its operations.
NEITI called on the NNPC to go further by publishing its previous audited accounts and in open data formats so that the reports can be more accessible to citizens who are its shareholders,. “NNPC should also strengthen and sustain its commitment to data mainstreaming and systemic disclosure.” Adio said. Also commenting, human rights lawyer and member of CSO, Mr. Richard Akinola, said he remained happy, that being one of the critics of NNPC that it has brought out its books for Nigerians to scrutinise.
Speaking on Channels Television, Business Morning monitored in Lagos last week, Akinola said upon assumption of office, he advised Kyari to make the NNPC books open for Nigeria.
‘‘But one year down the line, I am happy that Kyari yielded to that advice. It is only reasonable for us to applaud him for taking up this challenge. When I challenged him one year ago, and he promised to do it, I never expected it. I just took it lightly as one of those promises by public office holders’’. He said .
He explained that the 2018 AFS will engender public confidence in NNPC which he said appears to have been eroded, adding that many Nigerians see NNPC as a cesspit of corruption with everything shrouded in secrecy.
He said the 2018 is the first step towards probity in its affairs because this will help Nigerians dissect and ask more probing questions about the operations of the NNPC which was never the case before now.
According to him, the report will help NNPC to run more efficiently because from the questions that Nigerians will ask, it will learn to do things right which will definitely reflect in subsequent reports to be published in due course.
For his part, Senator Bassey Akpan, Chairman, Senate Committee, Upstream, said the recently published AFC of the NNPC underscored the readiness of the new Management of the national oil company to pursue transparency, good governance and accountability in the Petroleum Industry.
In all, it’s 19 entities registered under the Companies and Allied Matters Act (CAMA) as amended, the National Petroleum Investment Management Services (NAPIMS), had their books published on the NNPC Website.
The 2018 NNPC’s AFS posted positives in many of the upstream going concerns. A perusal of the AFS for the year ended December 31, 2018 of the National Engineering and Technical Company (NETCO), an Upstream subsidiary of the NNPC, indicated a profit after tax of over N4.5billion, a remarkable improvement from the previous year record of over N2.4billion.
The AFS of the Nigerian Petroleum Development Company (NPDC) indicated a profit after tax of over N179.1billion which comes as significant improvement from the 2017 profit of over N157.4billion. During the period, NPDC posted revenue of over N1.3trillion compared to the 2017 revenue of over N882.3billion. The AFS indicated that the NNPC’s flagship subsidiary has a total asset of over N5.3trillion within the period, compared to the N4.007trillion asset recorded in 2017.
The Nigeria Gas Company (NGC) recorded a profit after tax of over N13.2 billion with a comprehensive annual income of about N19.9 billion. The AFS also valued the NGC total assets in 2018 at over N251.7 billion compared to N196 billion in 2017.
In the Downstream Sector, the Petroleum Products Marketing Company (PPMC), for the first time, recorded gross profit of N24.3billion in the year under review, while NNPC Retail Limited posted profit after tax of over N2.2 billion compared to the N1.8 billion recorded in the preceding year. The statement also indicated that National Petroleum Investment Management Services (NAPIMS) posted revenue of N5.04 trillion in 2018 and profit of N1.01trillion, with total assets under the portfolio of the services unit valued at N18.6 trillion. NAPIMS, among others, manages the Joint Ventures contracts in the Upstream Sector on behalf of the government.