By Punch Editorial Board
Like a recurring decimal, anytime the NNPC helmsman is removed, other firings follow. So, it was within the regular sequence of events that usually follow the sacking of the CEO when some top managers of the company were fired after the removal of the former CEO of the company, Mele Kyari.
Allegations of fraudulent acts are usually part of the package. Kyari and some former MDs of subsidiaries, especially the refineries, are facing the Economic and Financial Crimes Commission’s investigations.
However, beyond the firings and the fraud allegations is the reality that changing a top management team does not necessarily lead to improved performance.
The problem with the NNPC is that the government is too involved in the running of the company. This needs to change.
There are too many Federal Government interventions in hirings and firings and the day-to-day business of the company, which have turned it into a glorified parastatal rather than a world-class oil company.
Every successive Nigerian president has elected to be the petroleum minister and often will change the top management and appoint his men to the positions.
However, firings and hirings have never changed anything substantially in the NNPC because lack of transparency and corruption always remain.
The Finance Minister, Wale Edun, has hinted that the company will undergo a forensic audit. That is a welcome decision. The transactions that took place under Kyari should be examined by eagle-eyed auditors.
The fact that the refineries that were said to have resumed production in Port Harcourt and Warri are said to be performing sub-optimally should be investigated.
Beyond all that is the urgent need for the company to be listed on the Nigerian Stock Exchange. Listing will help to reduce corruption in the company and will promote transparency.
If this government is interested in turning around the fortunes of the company, it must encourage the company to list.
Going forward, appointments to the company’s top management positions should be based on competence rather than a need for geo-political balancing.
The choice of the management team should be merit-based and dwell less on politics and ethnic leanings.
The NNPC, if well restructured, could evolve into first, a regional energy giant and later a global giant.
Malaysia’s Petronas, Brazil’s Petrobras and Saudi Arabia’s Aramco became oil giants because the governments of those countries created enabling environments for the companies to thrive.
Saudi Aramco has both the world’s second-largest proven crude oil reserves, at more than 270 billion barrels and the largest daily oil production of all oil-producing companies.
On December 11, 2019, the company’s shares were listed on the Saudi Exchange.
Petrobras is also a listed company, and the Brazilian government directly owns 54 per cent of its common shares with voting rights, while the Brazilian Development Bank and Brazil’s Sovereign Wealth Fund each control 5.0 per cent, bringing the state’s direct and indirect ownership to 64 per cent.
Although Petronas (Petroliam Nasional Berhad) of Malaysia is a government-owned company and is not publicly traded, many of its subsidiaries are. Petronas Gas Berhad is a subsidiary and is listed on Bursa Malaysia. There are other Petronas-related companies, like Petronas Chemicals Group Berhad, which are listed on Bursa Malaysia.
The three companies have refineries that are working so effectively, unlike the NNPC-owned refineries, which have almost become liabilities rather than assets.
So, turning the NNPC around for the good of the country will take the determination of President Bola Tinubu to do the appropriate thing for the company once and for all by reducing the government’s interference in operations, appointing top management by merit, and privatising it outright.
Punch Editorial Board
