A Look At The Uneasy Calm In The Petroleum Sector Over Imminent Probe By The New Buhari Government
September 7, 2020 | News
We can still recall when the former Governor of the Central Bank ofNigeria (CBN), Lamido Sanusi, revealed to Nigerians that $20 billion wasnot remitted to the Federation Account by the Nigerian National PetroleumCorporation (NNPC), and the denials and counter-allegations that followedthat revelation. In fact, many believe that the said revelation by theformer CBN Governor was part of the issues that contributed to hiscontroversial removal from office. Now months to that revelation, itappears the last may not have been heard of the alleged missing $20billion as President Muhammadu Buhari, few weeks before he was sworn in,had assured that he would order a probe to ascertain how the oil moniesdisappeared into thin air from the accounts of the NNPC.
About a week before the President made this revelation, there were reportsthat the fear of the President Muhammadu Buhari and the call for probe ofthe petroleum sector may have gripped the operators, as both the righteousand the corrupt now reluctantly await the day of reckoning. Indeed,industry sources alleged that some government agencies such as theNigerian National Petroleum Corporation (NNPC), Department of PetroleumResources (DPR) and the Petroleum Product Pricing Regulatory Agency(PPPRA) have been strategically tidying up activities particularly thefinancial aspect of the business. Others believed that the impending probewill bring sanity and transparency in the sector, which has experiencedseveral management and policy hiccups in the past.
Some industry watchers like the Chairman, Frontier Energy, Dada Thomassaid: “I truly hope that President Muhammadu Buhari will do the rightthing and select a superb capable team that will actually deliverperformance not only in the petroleum sector but throughout the wholesectors of Nigerian economy and society. We must separate politics fromachievement and performance. We need to make it a transparent industry, weneed to make up an industry, which is competent, and capable investorswill come to play, not those briefcase companies that are being awardedall sorts of unscrupulous arrangement and contracts to the detriment ofthe nation,” he said. The industry chief said many corrupt allegations inthe industry should be brought to the fore and thoroughly investigated.
Indeed, there is need for the new government under President Buhari to‘sanitize’ and cleanse Nigeria’s oil and gas sector, starting with theexisting rot in the NNPC and some of its subsidiaries.President Buhari, who made his position known when he received adelegation of All Progressives Congress (APC) chieftains from AdamawaState at his campaign headquarters in Abuja before he was sworn in, saidthe issue regarding the said missing $20 billion from the NNPC would notbe swept under the carpet. President Buhari said the mere fact that theformer Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusiwas ignominiously sacked after blowing the whistle on the alleged missingmonies does not mean the matter had been rested.
The NNPC had repeatedly faulted Sanusi’s claim on the missing $20 billionoil money, noting that a recent report by PriceWaterhouseCoopers (PWC)using forensic audit had determined that there was no malfeasance in itsoil transactions. But President Buhari maintained that going by the hugesums of money involved, there was no way an APC-led administration thathas the “fight against corrupt” practices as a cardinal objective, wouldsit by and watch some highly placed Nigerians loot the treasury.Let us also mention here that many relevant stakeholders like us hadwondered how come it is now that the opposition has won the Presidentialelection with President Muhammadu Buhari’s emergence, that the NNPC underthe leadership of the former Minister of Petroleum Resources, Mrs. DiezaniAlison-Madueke, was said to be refunding money into the FederationAccount? Let us recall that reports revealed that the former Minister ofPetroleum Resources, Mrs. Diezani Alison-Madueke, had disclosed that theNNPC has started refunding $1.48bn into the Federation Account asrecommended by an audit firm, PriceWaterHouse Coopers (PWC), which we findappalling and rather unfortunate that it had to take an audit firm toexpose and recommend the NNPC to out rightly return the said amount ofmoney to the Federation Account.
PWC had stated in the report that while the total gross revenue generatedfrom crude oil lifting was $69.34bn between January 2012 and July 2013 andnot $67bn as earlier stated by the immediate past Senate ReconciliationCommittee, what was remitted to the Federation Account was $50.81bn andnot $47bn.
The audit report revealed that $28.22bn was the value of domestic crudeoil allocated to the NNPC, adding that total amount spent on subsidy forPremium Motor Spirit was $5.32bn. Though, Alison-Madueke had explainedthat the unremitted fund was owed by NPDC for a block that had beenassigned from NNPC to NPDC, the question is why wait for an audit firm torecommend that the money should be returned before steps were taken? Whyhold on to the said amount meant for the Federation Account all thiswhile, even after the former CBN Governor Lamido Sanusi, now Emir of Kanohad stated that the NNPC still has money it needed to remit to theFederation Account?
Though the said former Minister of Petroleum Resources Mrs. DiezaniAlison-Madueke did not disclose how much has so far been refunded by theNNPC corporation, however we cannot help but ask if the said amount is allthere is that actually needs to be refunded by the NNPC. The formerMinister practically ‘explained-away’ how they have spent about $18billionusing receipts and all manner of transaction papers they have done.
The former Petroleum Minister also denied reports that she was seeking theassistance of some highly-placed persons in other to get soft landing fromthe President Muhammadu Buhari government. But the question is what ifBuhari did not say he will probe the NNPC about the missing $20 billion?Will they just keep quiet and everybody carry on as if nothing happened?What if the now former President Goodluck Jonathan had won thePresidential election, would those under his government in the PetroleumMinistry had carried on with ‘their business as usual’ in the NNPC?
From what we can deduce, it is obvious that the Minister and the NNPC werebanking on the fact that the PDP-led Government under President GoodluckJonathan would continue with the next government after the Presidentialpolls, and as such, it will be business as usual for them to allow thingsremain the way they were. But now that the table has turned, with anobviously “no-nonsense” government led by President Buhari now in power,everybody, in this case the NNPC and those under the Ministry of PetroleumResources are trying to put their house in order to save themselves fromthe wave of CHANGE that is already sweeping in government circles.
Let us also recall that former President Goodluck Jonathan had, few weeksto his exit, ordered for the immediate release of the full audit report ofthe NNPC; accused of diverting $20 billion oil money. The former Presidentgave the directive a day after the now President Muhammadu Buhari, pledgedto launch an investigation into the claim made by the former governor ofthe Central Bank of Nigeria, Lamido Sanusi about the said missing fund.Again, the question we asked was why now? Why wait for the new President’spromise to probe the missing money before such a directive would be comefrom the now out gone President?Also, despite the fact that the said audit report by PWC exposed that“Double Payments” were made in the name of subsidy on petroleum andkerosene products by the NNPC, the former President did nothing aboutthis. Almost a trillion naira was given in double entries if we were tocalculate what is in the said report. Former President Jonathan andrelevant stakeholders under his government did not probe; did notinvestigate or even sack the now former Minister of Petroleum Resourcesunder whose watch these atrocities were committed. With this sort of mindbugging revelations made in the PWC report, why was nobody investigated?Why was nobody jailed? This tells us that indeed, there were the“untouchables” in the immediate past administration of former PresidentJonathan. This is exactly what we, and many Nigerians, are hoping willchange under the new President Buhari dispensation.
Another interesting twist to the whole development regarding the saidmissing $20 billion is some contents of the 199-Page PWC Report that wasreleased to the Nigerian public by the Government. The first line of thesaid report states: “The procedures we performed did not constitute anexamination or a review in accordance to generally accepted auditingstandards or attestation standards. Accordingly, we provide no opinion,attestation or other form of assurance with respect to our work or theinformation upon which our work was based”. We can imagine such a boldstatement being made by a supposed audit firm that was contracted toconduct an audit of the nation’s Petroleum Corporation’s financialappropriations.
Let us remember that the said audit firm was paid with Nigerianstax-payers money for such a crap for an audit. Agreed that the report didmade some ‘profound revelations’ which was a good step in the rightdirection, but let us also recall that the former Finance Minister andCoordinating Minister of the Nigerian Economy, Dr. Ngozy Okonjo-Iweala hadtold Nigerians that they will do a “forensic audit,” mark the word –forensic – on the NNPC and its financial activities to lay to rest thecontroversies that surrounded the missing $20 billion.
Now, if the said audit firm could clearly state in the above lines of itssaid ‘forensic audit’ Report that “the procedures (they) performed did notconstitute an examination or a review in accordance to generally acceptedauditing standards or attestation standards,” where does that leaveNigerians and relevant stakeholders? How does the Nigerian Governmentunder former President Jonathan expect Nigerians and relevant stakeholdersto accept the contents of such a report that was not done in accordance to“generally accepted auditing standards or attestation standards”? Whyshould an audit firm conduct a supposed ‘forensic audit’ and not followlaid down accepted procedures?
Or was the said audit firm, PWC, trying to indirectly tell Nigerianssomething? It clearly does not make sense. On Page 13 of the said Report,there is a footnote that expresses they could not have access to some‘sensitive’ accounts of the NNPC operations. Apparently, it appears theNNPC did not give PWC access to some sensitive vital aspects of theCorporation’s accounts to be audited.
It is rather unfortunate that, in spite of all the noise made by theformer administration to make public the audit report of the NNPCfinancial activities regarding the missing $20 billion (which thegovernment intended to use to exonerate itself from any blame), whatNigerians were fed with was a supposed ‘forensic report’ that cannot berelied upon or attested with generally accepted standards. So, we are backto where we started; and that is the fact that Nigerians know little ornothing about the missing $20 billion.
We can see that apart from the NNPC and its subsidiaries, the entireNigerian oil and gas sector seriously needs some ‘cleansing’ to make itmore accountable and transparent for all stakeholders. Dada Thomas said:“The oil industry accounts for 90 per cent of the foreign exchangeearnings in Nigeria. I believe that the allegations made by the formerGovernor of Central Bank of Nigeria (CBN) that some $20 billion wasmissing or not accounted for. I believe that the Senate hearing in whichgovernment officials were admitting that there was some wrong doing thatwas being perpetrated. I believe that the entire world looks at Nigeriawith horror and disdain about the total lack of transparency andcorruption in Nigeria’s oil and gas.
I believe that we cannot continue to allow corruption, lack oftransparency, and lack of accountability to dominate the way we administerand manage our petroleum industry. I believe we need a total clean up tomake the industry truly beneficial to all Nigerian populace and Nigeriaas a nation.” As noted by another industry watcher: “Generally speaking,if probe will bring about more transparency, more professionalism and ahigher level of delivery on our mandate, it is all well and good.”While we wait to see the actions of the new government in addressing thedeep-seated corruption and lack of transparency/accountability in the NNPCand the nation’s oil and gas sector, we are however glad that PresidentBuhari’s body language is already sending signals to industry players andstakeholders that it will no longer be ‘business as usual’ in the industryand the NNPC.
As we can see, since his emergence as President of Nigeria, things arealready shaking up in every sector of the polity, particularly the eminentprobe in the oil and gas sector. We believe it is so because PresidentBuhari is known as a well-disciplined and principled man who would nottolerate any lapses from any public official. This is exactly what we needin Nigeria’s ‘dying oil and gas industry.’
About a week before the President made this revelation, there were reportsthat the fear of the President Muhammadu Buhari and the call for probe ofthe petroleum sector may have gripped the operators, as both the righteousand the corrupt now reluctantly await the day of reckoning. Indeed,industry sources alleged that some government agencies such as theNigerian National Petroleum Corporation (NNPC), Department of PetroleumResources (DPR) and the Petroleum Product Pricing Regulatory Agency(PPPRA) have been strategically tidying up activities particularly thefinancial aspect of the business. Others believed that the impending probewill bring sanity and transparency in the sector, which has experiencedseveral management and policy hiccups in the past.
Some industry watchers like the Chairman, Frontier Energy, Dada Thomassaid: “I truly hope that President Muhammadu Buhari will do the rightthing and select a superb capable team that will actually deliverperformance not only in the petroleum sector but throughout the wholesectors of Nigerian economy and society. We must separate politics fromachievement and performance. We need to make it a transparent industry, weneed to make up an industry, which is competent, and capable investorswill come to play, not those briefcase companies that are being awardedall sorts of unscrupulous arrangement and contracts to the detriment ofthe nation,” he said. The industry chief said many corrupt allegations inthe industry should be brought to the fore and thoroughly investigated.
Indeed, there is need for the new government under President Buhari to‘sanitize’ and cleanse Nigeria’s oil and gas sector, starting with theexisting rot in the NNPC and some of its subsidiaries.President Buhari, who made his position known when he received adelegation of All Progressives Congress (APC) chieftains from AdamawaState at his campaign headquarters in Abuja before he was sworn in, saidthe issue regarding the said missing $20 billion from the NNPC would notbe swept under the carpet. President Buhari said the mere fact that theformer Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusiwas ignominiously sacked after blowing the whistle on the alleged missingmonies does not mean the matter had been rested.
The NNPC had repeatedly faulted Sanusi’s claim on the missing $20 billionoil money, noting that a recent report by PriceWaterhouseCoopers (PWC)using forensic audit had determined that there was no malfeasance in itsoil transactions. But President Buhari maintained that going by the hugesums of money involved, there was no way an APC-led administration thathas the “fight against corrupt” practices as a cardinal objective, wouldsit by and watch some highly placed Nigerians loot the treasury.Let us also mention here that many relevant stakeholders like us hadwondered how come it is now that the opposition has won the Presidentialelection with President Muhammadu Buhari’s emergence, that the NNPC underthe leadership of the former Minister of Petroleum Resources, Mrs. DiezaniAlison-Madueke, was said to be refunding money into the FederationAccount? Let us recall that reports revealed that the former Minister ofPetroleum Resources, Mrs. Diezani Alison-Madueke, had disclosed that theNNPC has started refunding $1.48bn into the Federation Account asrecommended by an audit firm, PriceWaterHouse Coopers (PWC), which we findappalling and rather unfortunate that it had to take an audit firm toexpose and recommend the NNPC to out rightly return the said amount ofmoney to the Federation Account.
PWC had stated in the report that while the total gross revenue generatedfrom crude oil lifting was $69.34bn between January 2012 and July 2013 andnot $67bn as earlier stated by the immediate past Senate ReconciliationCommittee, what was remitted to the Federation Account was $50.81bn andnot $47bn.
The audit report revealed that $28.22bn was the value of domestic crudeoil allocated to the NNPC, adding that total amount spent on subsidy forPremium Motor Spirit was $5.32bn. Though, Alison-Madueke had explainedthat the unremitted fund was owed by NPDC for a block that had beenassigned from NNPC to NPDC, the question is why wait for an audit firm torecommend that the money should be returned before steps were taken? Whyhold on to the said amount meant for the Federation Account all thiswhile, even after the former CBN Governor Lamido Sanusi, now Emir of Kanohad stated that the NNPC still has money it needed to remit to theFederation Account?
Though the said former Minister of Petroleum Resources Mrs. DiezaniAlison-Madueke did not disclose how much has so far been refunded by theNNPC corporation, however we cannot help but ask if the said amount is allthere is that actually needs to be refunded by the NNPC. The formerMinister practically ‘explained-away’ how they have spent about $18billionusing receipts and all manner of transaction papers they have done.
The former Petroleum Minister also denied reports that she was seeking theassistance of some highly-placed persons in other to get soft landing fromthe President Muhammadu Buhari government. But the question is what ifBuhari did not say he will probe the NNPC about the missing $20 billion?Will they just keep quiet and everybody carry on as if nothing happened?What if the now former President Goodluck Jonathan had won thePresidential election, would those under his government in the PetroleumMinistry had carried on with ‘their business as usual’ in the NNPC?
From what we can deduce, it is obvious that the Minister and the NNPC werebanking on the fact that the PDP-led Government under President GoodluckJonathan would continue with the next government after the Presidentialpolls, and as such, it will be business as usual for them to allow thingsremain the way they were. But now that the table has turned, with anobviously “no-nonsense” government led by President Buhari now in power,everybody, in this case the NNPC and those under the Ministry of PetroleumResources are trying to put their house in order to save themselves fromthe wave of CHANGE that is already sweeping in government circles.
Let us also recall that former President Goodluck Jonathan had, few weeksto his exit, ordered for the immediate release of the full audit report ofthe NNPC; accused of diverting $20 billion oil money. The former Presidentgave the directive a day after the now President Muhammadu Buhari, pledgedto launch an investigation into the claim made by the former governor ofthe Central Bank of Nigeria, Lamido Sanusi about the said missing fund.Again, the question we asked was why now? Why wait for the new President’spromise to probe the missing money before such a directive would be comefrom the now out gone President?Also, despite the fact that the said audit report by PWC exposed that“Double Payments” were made in the name of subsidy on petroleum andkerosene products by the NNPC, the former President did nothing aboutthis. Almost a trillion naira was given in double entries if we were tocalculate what is in the said report. Former President Jonathan andrelevant stakeholders under his government did not probe; did notinvestigate or even sack the now former Minister of Petroleum Resourcesunder whose watch these atrocities were committed. With this sort of mindbugging revelations made in the PWC report, why was nobody investigated?Why was nobody jailed? This tells us that indeed, there were the“untouchables” in the immediate past administration of former PresidentJonathan. This is exactly what we, and many Nigerians, are hoping willchange under the new President Buhari dispensation.
Another interesting twist to the whole development regarding the saidmissing $20 billion is some contents of the 199-Page PWC Report that wasreleased to the Nigerian public by the Government. The first line of thesaid report states: “The procedures we performed did not constitute anexamination or a review in accordance to generally accepted auditingstandards or attestation standards. Accordingly, we provide no opinion,attestation or other form of assurance with respect to our work or theinformation upon which our work was based”. We can imagine such a boldstatement being made by a supposed audit firm that was contracted toconduct an audit of the nation’s Petroleum Corporation’s financialappropriations.
Let us remember that the said audit firm was paid with Nigerianstax-payers money for such a crap for an audit. Agreed that the report didmade some ‘profound revelations’ which was a good step in the rightdirection, but let us also recall that the former Finance Minister andCoordinating Minister of the Nigerian Economy, Dr. Ngozy Okonjo-Iweala hadtold Nigerians that they will do a “forensic audit,” mark the word –forensic – on the NNPC and its financial activities to lay to rest thecontroversies that surrounded the missing $20 billion.
Now, if the said audit firm could clearly state in the above lines of itssaid ‘forensic audit’ Report that “the procedures (they) performed did notconstitute an examination or a review in accordance to generally acceptedauditing standards or attestation standards,” where does that leaveNigerians and relevant stakeholders? How does the Nigerian Governmentunder former President Jonathan expect Nigerians and relevant stakeholdersto accept the contents of such a report that was not done in accordance to“generally accepted auditing standards or attestation standards”? Whyshould an audit firm conduct a supposed ‘forensic audit’ and not followlaid down accepted procedures?
Or was the said audit firm, PWC, trying to indirectly tell Nigerianssomething? It clearly does not make sense. On Page 13 of the said Report,there is a footnote that expresses they could not have access to some‘sensitive’ accounts of the NNPC operations. Apparently, it appears theNNPC did not give PWC access to some sensitive vital aspects of theCorporation’s accounts to be audited.
It is rather unfortunate that, in spite of all the noise made by theformer administration to make public the audit report of the NNPCfinancial activities regarding the missing $20 billion (which thegovernment intended to use to exonerate itself from any blame), whatNigerians were fed with was a supposed ‘forensic report’ that cannot berelied upon or attested with generally accepted standards. So, we are backto where we started; and that is the fact that Nigerians know little ornothing about the missing $20 billion.
We can see that apart from the NNPC and its subsidiaries, the entireNigerian oil and gas sector seriously needs some ‘cleansing’ to make itmore accountable and transparent for all stakeholders. Dada Thomas said:“The oil industry accounts for 90 per cent of the foreign exchangeearnings in Nigeria. I believe that the allegations made by the formerGovernor of Central Bank of Nigeria (CBN) that some $20 billion wasmissing or not accounted for. I believe that the Senate hearing in whichgovernment officials were admitting that there was some wrong doing thatwas being perpetrated. I believe that the entire world looks at Nigeriawith horror and disdain about the total lack of transparency andcorruption in Nigeria’s oil and gas.
I believe that we cannot continue to allow corruption, lack oftransparency, and lack of accountability to dominate the way we administerand manage our petroleum industry. I believe we need a total clean up tomake the industry truly beneficial to all Nigerian populace and Nigeriaas a nation.” As noted by another industry watcher: “Generally speaking,if probe will bring about more transparency, more professionalism and ahigher level of delivery on our mandate, it is all well and good.”While we wait to see the actions of the new government in addressing thedeep-seated corruption and lack of transparency/accountability in the NNPCand the nation’s oil and gas sector, we are however glad that PresidentBuhari’s body language is already sending signals to industry players andstakeholders that it will no longer be ‘business as usual’ in the industryand the NNPC.
As we can see, since his emergence as President of Nigeria, things arealready shaking up in every sector of the polity, particularly the eminentprobe in the oil and gas sector. We believe it is so because PresidentBuhari is known as a well-disciplined and principled man who would nottolerate any lapses from any public official. This is exactly what we needin Nigeria’s ‘dying oil and gas industry.’