BETWEEN RIBADU AND FGN

The petroleum sector is the live wire of our economy and it is evident that its current state is nothing to write home about, with massive frauds and short-changing of federal accounts going on.

Since the fuel subsidy protests, the petroleum sector has been exposed as never before and the stench emanating is so choking that its either we succeed in cleaning up the rot or we sing good bye to our beautiful crude. From the probes in the national assembly to the multiple committees set up to investigate and proffer solutions to ways to make the sector transparent and profitable to the government, the only thing that is manifest is layers and layers of corruption, fraudulent activities, incompetency and inaccuracies. It’s a big shame that we cannot keep our precious hen that lays the golden egg in order. What a shame!

Enter Mallam Nuhu Ribadu acclaimed corruption fighter to cleanse the rot. After the 2011 elections with him as the presidential flag bearer of the ACN, some of us found it absurd that he will choose to serve in any capacity in the PDP led government. Then in February 2012 he was appointed to chair the Petroleum Revenue Special Task Force (PRSTF). However some opined that his services will benefit the country at large in that petroleum sector that is bedridden with corruption. But today we are confused as to what was he actually sent to do there.

 The report presented to President Jonathan  about a week ago has generated a lot of controversy due to the altercation between Ribadu and Mr.Orosanya the deputy chairman of the committee. This has reduced their work to a caricature with Mr Orosanya discrediting the report and Ribadu alleging bias on Mr Orosanya as he was appointed into the board of NNPC within the period of the committee job. Truth be told, it will be difficult to accept that Mr Orosanya wasn’t brought in to play the game of the spoiler and his innocence in the matter. As it is alleged he only attended the committee meeting only once and was defending ADDAX petroleum company all through the meeting. If out of the over 20 man committee only two are dissenting then something is wrong with the two. Or there is a grand conspiracy by the other members of the committee. But with people like Dr Olisa Agbakoba(SAN), Prof Olusegun Okunnu, Pastor Itua Ighodalo and Dr(Mrs) Omolara Akanji, I doubt how they would have conspired against only two members of the committee.

However, with the presence of controversies comes revelation of truth and critical analysis of issues, which has been the case since the submission of the report. Going through the report one will get the impression that this task was a difficult and complex one at that considering  the numerous parastatals and subsidiaries involved and the volume of data that they will have to go through. That is why I find it difficult to believe that the report was just a sham as some want to us to believe especially that fellow who is an “attack lion” to the presidency.

First and foremost, the committee wasn’t given time duration to complete the job. They were asked to present monthly reports to the minister of petroleum. Which I understand they did till they submitted the final report to the minister and she sat on it for about a month before she was pressured into allowing for its submission to the president. Among their terms of reference was to work with consultants and experts to determine and verify all petroleum upstream and downstream revenues (taxes, royalties etc) due and payable to the federal government of Nigeria and to take all necessary steps to collect all debts due and owing, to obtain agreements and enforce payment terms by all oil industry operators. But from their reports they were able to identify were there were leakages in revenue accruable to the federal government and debts owed the federal government, but I couldn’t see the report of how much they were able to recover from the culprits or concrete agreements on how to pay up, which seems to be the basis for the “attack lion” to discredit the report.

As much as there are controversies surrounding the submission of the report, there are points that must be noted and acted upon as a matter of urgency if our golden egg will give us the expected accurate revenue.

 Illegalities by the NNPC and its subsidiaries must be stopped as it was noted that they deducted amounts for subsidy related expenses prior to remittance of revenues to the federal coffers.

Also noted was that about 50% to 80% of crude produced in Nigeria was not refined in Nigeria between 2002 and 2009 , Which is a big shame. World 8^th major oil producer refining crude outside its shores is a big slap on us as nation. I wander how these fellows in the petroleum sector feel when they meet their colleague from lesser countries who don’t have half the crude we have and refining enough to satisfy their national needs. Since the days of OBJ our refineries have always been undergoing Turn Around Maintenance (TAM) with budgets running into billions of dollars. But yet the same issues persist. I will keep saying it until somebody wakes up to act. It is not a secret that along the Niger delta that crude is being refined locally. We shouldn’t look at it as a national sabotage but a sign of ingenuity and drive buy the youths to take their destinies into their hands as the government has failed them. Rather than destroy them out rightly as being done now by the JTF, they should be brought together and taught ways to make it better and refine with minimal environmental destruction. They should be brought together on unions like corporative organizations and refine in small scales to serve our local needs. It is on record that during the civil war that crude was refined in small scale which helped to sustain the Biafran troop  during the war. Let us encourage them to improve on the technology rather than destroying them out rightly.

Contrary to global practice Nigeria uses crude oil traders 100% to sell its crude rather than selling to refineries, demonstrating, potential for middlemen to manipulate pricing with suboptimal returns to the federal purse. This may be contributory to the high cost of our PMS.

Government has not been able to pay its joint venture cash calls which has led to NNPC to enter into a range of borrowing arrangements referred to as Alternative Financing Arrangements with debt(estimated at around 8%) continuously mounting. NNPC has 16 subsidiaries which are running at deficit of about 298billion naira as at 2009 and NNPC doesn’t receive the required capital to grow its assets or meet operating costs. Therefore it relies on federal government for lines of credit and deductions of oil revenue due to the federation account which is illegal as it has no basis in the constitution.

Other revelations include the fact that the amount refined and exported each day cannot be accurately reconciled by the relevant agencies. The Department of Petroleum Resources (DPR) is currently unable to independently track and measure gas volumes produces and flared depending largely on the information provided by the operators. Now a reconciliation of data meeting supposed to be held a minimum of about 36 times within the period under review were concluded only 6 times. This smacks of inefficiency. And one wanders why these fellows in these industries earn huge amounts of cash for doing nothing.

Then the greatest albatross is the theft of crude oil said to be at about 6-30% of production. About 10% of daily production is stolen and when the cash estimates are calculated it runs into about a trillion naira annually.

Going through the report you will discover a lot of irregularities going on in the oil sector leaving you with a sense of despair as if nothing can be done to remedy the situation. But it is my belief, that, since the fuel subsidy protest that we are on the right track despite the efforts of some devilish people to take us back. After this season of revelations will come the period of  correction and implementation. This will only be driven by the people. If it will take us to protest always till we get things right then let us keep protesting till we achieve a nation that we so desire.

Thanks

 Dr Agwu Nnanna

Portharcourt. Rivers state.

dr_nnanna@yahoo.com

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