Cracking NNPC into fractions

It did not need a soothsayer to predict that the days of omnipotence for the Nigeria National Petroleum Corporation (NNPC), Nigeria’s monolithic, national oil monopoly, are numbered. Rather, it was only a matter of when, how and of course what would be the after effects of any change in its status, given its straddle like […]

It did not need a soothsayer to predict that the days of omnipotence for the Nigeria National Petroleum Corporation (NNPC), Nigeria’s monolithic, national oil monopoly, are numbered. Rather, it was only a matter of when, how and of course what would be the after effects of any change in its status, given its straddle like grip on the Nigerian economy that was the issue. Bestriding virtually every aspect of the country’s life, the NNPC has for 27 years remained the principal cash cow for the oil dependent country, and by implication the most profound national institution on the horizon.
Between 1977 when it was established and the present, the agency had grown from a government parastatal that was intended to harness for good, the nation’s fortunes in the critical oil and gas sector, to a colossus over which the nation no more had control. Its officials became power drunk while its finances were operated outside the terrain of statutory financial expedients and audit processes. In the process it earned for itself the unenviable title of Nigeria’s number one citadel of chicanery, corruption and scandals.
The trouble with the NNPC and by implication the nation’s oil and gas sector became so endemic that a deluge of remedial initiatives coalesced into the evolution of the Petroleum Industry Bill (PIB), which for the past nine years has been stuck in the National Assembly on its tortuous journey to passage into law.The advent of the PIB was widely hailed as the arrival of the ultimate panacea for the ills of the oil sector. This column had even canvassed in an earlier edition that as far as the reforms of the Nigerian oil and gas sector are concerned, on PIB we stand.
How far the government identified with that position was left in abeyance as the administration was tinkering with one reform or the other since its advent. Nigerians had before the advent of the present administration been following the track of the PIB and were looking forward to its eventual passage and implementation.
Then comes President Muhamadu Buhari like a knight in shining armour to tackle the demons bedeviling the sector and thereby stirred great expectations that his intervention would deliver on the promised change. These expectations were boosted when on appointing a cabinet he assigned the petroleum minister’s portfolio to himself and brought in Dr Ibe Kachikwu, a well-grounded professional in global oil business as the minister of state. The duo commenced the cleaning of the odious stable of the NNPC with preliminary maneuvers of weeding and repositioning of personnel and other assets. Needless to state that Nigerians who had been waiting for the big show which is the surgery on the NNPC establishment itself, extended the waiting period for his act.
This came to pass (or so it seemed) last week with the announcement by the Minister of State Dr. Kachikwu of the unbundling of the NNPC mega structure into 30 different companies each with its own individual identity. Welcome as this initiative is, it was however followed (even avoidably) by some bitter after taste, as all hell was let loose. Firstly, the industry was stirred into mixed reactions with some stakeholders actually opposing the initiative on grounds of timing and other claims as others hailed it as justified.  Oil industry workers, acting through their unions threatened to go on strike, citing nonconsultation with them by the minister of state. The situation spawned a nationwide state of panic over another round of fuel crisis. Meanwhile, the hoard of fuel hawkers had a field day as they cashed in as usual on the situation to make quick money from impatient motorists.
The whole situation threw up a paradox over why the unbundling of the NNPC which should be a desideratum turn out to spread agony and misgiving nationwide. The twist in the matter is that even the PIB which is still wallowing in the legislature has as one of its cardinal provisions the unbundling or cracking of the NNPC into fractions, just like crude oil, one of its main concerns. And from the build-up to the PIB, the issue of unbundling remains one area of consensus among stakeholders in the industry.
The problem therefore lies in the delivery of a good message in a rather less than robust manner. A critical look at Kachikwu’s handling of the NNPC unbundling affair betrays a veiled denigration of the reality that the fortunes of the NNPC and any other government agency that is established by law are beyond the sole prerogative of the executive arm of government. Whereas the NNPC was established by decree in 1977 under a military administration, the situation today is different as the country is now in a democracy, where the rule of law holds sway.  For the purpose of clarification, government action in a democracy enjoys legitimacy only in as much as such is domiciled in the popularly expressed will of the people. And this is only established through the formal processes of the legislature, the authentic voice of the people.
In the case of the NNPC, the choice of the government to adopt a surreptitious approach for unbundling the agency is disturbing. Not only was the option not necessary, it may even have heightened interest – both negative and positive, as it creates the impression that the government was only looking for a loophole to carry out an action it would have handled most elegantly with the collaboration of the legislature.
With this development, however, there is now a clear sense of urgency about the unbundling of the NNPC, if only to free the nation from the vicious grip of the tentacles of the leviathan organization. This lesson cannot be lost on any stakeholder no matter what interest is deemed to be at stake. There is now more than ever, the need to address the future of the NNPC in the Nigerian economy.
 While the unbundling may not be reversed, the need, however, exists for the administration to join forces with the National Assembly to drive the PIB to its speedy passage in any form that will prove acceptable to the majority of stakeholders. This will assure the stakeholders that come the demise of the NNPC, their interests will remain protected.
Meanwhile,  there may  still be some merit in the surreptitious launch of the message by Kachikwu,  as it has proved to be a shock therapy on the nation’s psyche, preparatory to making the unbundling of NNPC a fait accompli.