5th August, 2015
Ayorinde Oluokun/Abuja
In terms of its timeliness, the appointment of Dr. Ibe Emmanuel Kachikwu as the Group Managing Director of Nigeria National Petroleum Corporation, NNPC by President Muhammadu Buhari could not have come at a better time.
For one, the announcement of the former vice chairman and General Counsel for ExxonMobil in Africa was made less than 24 hours after a report by Natural Resource Governance Institutes (NRGI), a non-profit again confirmed the unenviable status of the Corporation as a behemoth of corruption in dire need of urgent radical reforms.
The report, one of several of such arising from investigations and probes in which the Corporation has been indicted of corrupt practices on all fronts, detailed how the nation has been shortchanged to the tune of about $32 billion from the so called crude oil swap arrangements, non remittance of revenue earned on behalf of the country from sale of petroleum products to the national treasury and other shenanigans involving domestic crude allocation.
NRGI particularly noted that the management of oil sales by NNPC’s oil began to deteriorate seriously as from 2010 under the administration of former President Goodluck Jonathan. The NRGI report collaborates similar reports by the Nigeria Extractive Industry Transparency Initiative, NEITI, PwC among others.
Former central bank governor, Lamido Sanusi was sacked after pointing out that $20 billion had not been remitted by NNPC between January 2012 and July 2013. Also in June, the National Economic Council said the NNPC had earned 8.1 trillion naira ($41 billion) from 2012 until May 2015, but only paid 4.3 trillion to the federal government.
Significantly, the institute noted that NNPC’s mismanagement of public revenues and its performance failures has persisted due to lack of political will by successive governments to reform the corporation.
Yet, the imperative for reforms of the Corporation through which the country earns about 85 per cent of its income could not be crucial at any other time than now. Declining price of crude oil in the international market which has rebounded locally in form of inability of federal and state governments to pay salaries and meet their other obligations means that every cent earned from sale of oil must now be well accounted for.
President Buhari who has also served as a minister of Petroleum in the 70s has never failed to indicate his determination to take the bull by the horn in terms of restructuring of the Corporation. Though the President himself has not come out to say how he intends to restructure NNPC, reports during his recent trip to the United States indicated that he may unbundle the Corporation by creating two entities out of it.
The unbundling of the oil behemoth will be in tune with the Petroleum Industry Bill, PIB. The Federal Government has not been able to pet the bill which proposes to overhaul the industry through creation of separate regulatory and commercial institutions in the petroleum industry, change of the fiscal dynamics and reform of the operational mechanisms of the upstream, downstream and natural gas industries into an Act since 2008.
Industry analysts believe a speedy passage of the bill is crucial for any enduring reform of the sector. Reports indicated that President Buhari met with Dr. Kachikwu a day before the announcement of his appointment during which he spoke to him about his vision for NNPC.
The fact that the new NNPC GMD resumed within an hour after he was announced as the GMD of NNPC may also indicate the urgency of the task Kachikwu has been assigned.
The GMD assumed duty during a brief handover ceremony held at the NNPC Towers, Abuja, according to a statement from the Corporation expressed gratitude to his predecessor, Dr. Joseph Dawha, for his hard work in holding the corporation, while pledging to work assiduously in achieving the President’s growth aspiration for the oil and gas industry.
Kachikwu is a First Class Graduate of Law from the University of Nigeria, Nsukka, and the Nigerian Law School. He also holds Masters and Doctorate Degrees in Law from the Harvard Law School. He started his career with the Nigerian/American Merchant Bank before moving on to Texaco Nigeria Limited from where he joined Exxon-Mobil.
On September 25, 2012, the Society for Corporate Governance (SCG) celebrated the appointment of Dr. Emmanuel Ibe Kachiukwu, as the Executive Vice-Chairman, Exxon Mobil, at the Civic Centre, Victoria Island, Lagos.
At that event, guests made up of distinguished Nigerians, former Chief of General Staff, Commodore Ebitu Ukiwe, Professor Pat Utomi, a former presidential candidate and Dr. Christopher Olukolade a corporate titan had described Kachikwu in glowing terms, attesting to his intellectual and professional capacity.
“This Emmanuel is a package of dynamite. He looks gentle, but don’t be deceived, he’s got more up his brilliant sleeve than you can guess by looking merely on the surface… I liken him to a human resource of the most eminent quality that the world needs to look up to more of his likes to put this world in order so that they can experience good governance…,” Olukolade said.
Immediate reactions to his appointment among stakeholders in the industry on Tuesday were also positive. NAN quoted Mr. Emmanuel Iheanacho, Managing Director, Integrated Oil and Gas Limited as describing the appointment as a welcome development. “While I congratulate him on his new appointment, I also urge him to reform the corporation and ensure it is corruption free. The new man is a well-known experienced oil and gas captain of so many years; he will use his good experience to reform the corporation”.
Also, the agency quoted Mr. Chinedu Okoronkwo said that the era of impunity in the corporation was over, adding that the oil and gas sector would begin to experience re-birth in the hands of a private sector driven person. Okoronkwo said “that is the change the people had been clamouring for. Buhari understands the system and he is the man for the job”.
According to him, the days when a single marketer or individual will be given allocation to control the sales of oil and gas market is over.
A source at NNPC told NAN that the appointment was a welcome development, adding that, Kachikwu would address the issues of corruption and dubious accounting practices in the corporation.
The source said that Kachikwu, who had been scheduled to perform a wider role in his new portfolio, was a very well respected technocrat with an impeccable record.
The glittering four towers which houses the NNPC Abuja national headquarters is described as “towers of corruption,” to indicate the vice that the state oil company has come to be associated with over the years. Nigerians can only wait to see if Kachukwu will be able to shorn NNPC Headquarters of this unenviable name in the years ahead.