NNPC; Nigeria’s state oil firm on brink of extinction

Heavy losses, Corruption and liabilities are pushing Nigeria’s giant state oil firm toward annihilation, its top official warns, just as Nigeria’s Excess Crude Account is being looted by the State Governors with the active connivance of the Federal Government.

The Nigerian National Petroleum Corporation’s (NNPC) Managing Director Mohammed Barkindo said on Friday that in 2008, with a negative account balance of 326 billion naira ($2.1 billion), the corporation was technically bankrupt.

According to statistics, the company lost 25 billion naira in terms of revenue and spent about 800 billion naira on fuel importation last year.

Barkindo said that illegal bunkering, pipeline vandalism and product theft had particularly affected the capacity of Nigeria’s oil and gas assets. The official said that 16,083 instances of pipeline breaks were recorded within the past 10 years. 

Meanwhile, Oil Minister Rilwanu Lukman said that the NNPC is “running at a loss of more than 200 billion naira (1.32 billion dollars, 974 million Euros) with contingent liabilities” of more than 1.25 billion dollars. 

In his address in Abuja on the impending reorganization of the NNPC, Lukman warned that if this trend continues, the company “will cease to exist.” 

He cautioned that the next 18 months would be “critical and indeed the most challenging period” in the history of the NNPC and Nigeria’s oil and gas industry — the world’s eight largest oil producer. 

Meanwhile, the Excess Crude Account is being looted by the State Governors with active collaboration of the Federal Government.

At the beginning of the Yar’Adua administration, the Excess Crude Account of the Federation which was established by the preceding government to save money for a rainy day held well over $20 billion in its coffers. 

Today, it is down to $2 to $3 billion. As Ijeoma Nwogwugwu wrote today, The bulk of that amount has been consistently pillaged by the 36 State governors to sustain the bloated administrations they oversee and for personal gains. The rest was used for petroleum subsidies and power projects. Yet, very few states can vouch for the judicious use of the excess crude proceeds. 

She continued; what is worse is that the 36 governors used the release of more funds from the Excess Crude Account as a bargaining chip to promote Goodluck Jonathan from vice-President to acting president. Not until they had obtained his commitment to share another $2 billion did they move to get the National Assembly to pass the February 9 resolution. The fact that the $2 billion was released within 48 hours of that resolution being passed was not lost on most observers.

But getting their paws on their share of the $2 billion was not the single motive that informed the decision to back Jonathan. The need for self-preservation and fear of the unknown also forced their hand into persuading the National Assembly to pass the resolution. Let no one be deluded into thinking that the governors acted in the best interest of the country.

They did what had to be done to remain in office. Had they the power to control the mood of the public and certain elements beyond their reach, they would have fought to maintain the power vacuum and drift in the presidency.

These men continue to decimate our resources and are not held accountable.  

Ijeoma concluded; this era of selfish brazenness by a handful of men is no longer acceptable. It is a slap on our collective will as a people to which we must stop turning the other cheek.