- It cannot be business as usual in the big house of oil
Although meant as a cautionary note, the statement put out by the Nigerian National Petroleum Corporation (NNPC) on August 27, that about 98 per cent of documents involved in the sale of crude oil was fake aptly captures the ugly reality of the goings-on at the corporation.
NNPC’s Group General Manager, Crude Oil Marketing Division, Mele Kyari, had let it be known that the corporation does not sell crude oil from hotel rooms, warning would-be crude oil buyers to be mindful of the activities of local and international fraudsters who – from the cosy comfort of hotel rooms and apparently using the corporation’s symbols and other insignia – have perfected the practice of luring unsuspecting victims with higher discount offers on cargoes, offers of non-OPEC crude specification, crude allocation, crude oil sale letters and all manner of mouth-watering offers.
For a state oil corporation struggling valiantly to clean up its image and reposition itself as one worthy of public trust, we consider the statement as both timely and appropriate. In the age of scammers and briefcase-carrying businessmen, the effort, more like pushing the reset button, seems the least the corporation could do to reassure its publics – internal and external – of a desire to turn a terrible situation around. What is perhaps unhelpful is the attempt by the corporation to pass the situation off as an exception. Had the corporation cared to look inwards, not only would it be less sanguine about its pretentions, it would certainly discover how much the practice which it so stridently denies is more or less the rule – hence that those who describe the rot as deep and pervasive do not exaggerate.
The point is that the rot without the corporation merely mirrors the deeper rot within. We see both as obverse sides of the sham described as Nigeria’s oil industry. An industry riddled with subversion, to the point of becoming the norm. It explains why it is arguably the most opaque among its peers in the world. It does not matter whether it is the influence-riddled oil block allocation process; or the high-tech upstream operations where our officials, either for their pathetic lack of grasp of the intricacies of operations watch while the country is being bled by oil multinationals; or in their predilection for fraud continue to promote the scam described as strategic alliances known to cost the treasury billions of dollars in unremitted revenue; the industry has long become an industry of anything-goes. Need we add the downstream sector’s subsidy-gate known to have thrown up overnight billionaires for doing nothing other than recycling fuel subsidy papers while importing no fuel?
To the extent that the current situation goes beyond merely undermining the trust in legitimate business transactions but strikes a deadly dart at the heart of NNPC itself as a corporate entity, it bears stating that the real change will have to come from within the NNPC itself.
What to do? First, much as we agree that the police and the Economic and Financial Crimes Commission (EFCC) have a role in stamping out the practice; NNPC must accept that the greater burden lies with it to clean up its acts to ensure greater transparency in its operations. A good way to begin is for the corporation to identify such gaps that still exist in its operations/procurement chain that can be exploited by criminally-minded officials to rip off unsuspecting members of the public. The introduction of electronic platforms for crude oil marketing and its integration with other electronic platforms such as Platts and Argus would certainly help foster a regime of transparency in crude sales and marketing. Second, after years of clamour for the restructuring of the corporation into a world-class operator, the government must accept that the exercise can no longer wait.
