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Says he received death threat from unknown persons
- As Reps, Senators, NEITI, EFCC, others seek enhanced transparency, accountability in oil and gas sector
By Christiana Ekpa
The Group Chief Executive Office (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, Wednesday, justified the engagement of the private security contractors to protect the oil and gas pipelines and installations especially in the Niger Delta region, saying their efforts were yielding positive results.
Kyari who disclosed this while giving his keynote address at a Legislative Transparency and Accountability Summit themed “Enhancing Transparency and Accountability in the Oil and Gas Sector”, organized by the House of Representatives Anti-Corruption Committee said that the could not have continued to lose over 200,000 barrels of oil through oil theft on daily basis.
He said that thousands of illegal refineries had been destroyed just as the company made a discovery of over 295 illegal connections to national trunk pipelines.
Kyari however said that two national lines had since been restored while efforts were being sustained to root out oil thieves and other unwholesome activities.
The GCEO also said that he had received many threats to his life in his drive to curb the menace in the oil extractive industry.
Speaking on the finances and remittances of the company, Kyari said that NNPCL was open to forensic auditing even as he underscored the reality of fuel subsidy.
He said: “The energy sector remains very critical to national development. There’s no country that has developed without energy. You can’t do this if you’re not able to harness your resources for the benefit of the people. It’s important to see a situation where the energy sector becomes completely transparent and accountable. I congratulate the National Assembly for passing the petroleum industry act. The law was very clear about many things we can’t no longer do. As we continue to improve on this, you will see that this industry will serve its purpose, to provide energy for today and tomorrow.
“We are making sure that systems are automated, systems and processes respect policies. No doubt, abilities need to be upgraded. I agree with Prof that confidentiality clauses in agreement are always a root cause of some of the challenges that we have. Can we have timeframe within which we can disclose it? On the average time is that no contract should be private after one year. That way you can preserve the commercial interest and at the same time make it known to all stakeholders Which are Nigerians.
“In 2018, we made loss of N803 billion, we reduced the losses to N1.3 billion. By 2021, we made profit of N687 billion. So, it’s possible to make profit. We can do better than what we are doing today.
“Dealing with multinational oil companies, the strength of any agreement is the capacity of active members who negotiate these contracts. Partners do take advantage of their partners, it happens. But there’s a common rule in the oil and gas industry that when you take advantage of your partner, you will come to realize it years later and it pays back at you.
“The issue of crude oil theft that we discovered, was not expected. We didn’t know that this is happening. But the scale is enormous, we have seen pipelines taken from our main trunk lines to abandon platforms. We have thousands of illegal refineries that we have taken down in the past 45 months.
We have seen over 295 illegal connections to our pipelines. Many of them have been there for years. That you have a situation where your production came down to 1.1 million barrels, from 1.8, the reason is that not all of them are stolen. Let me clear about that misconception that the remaining balance is stolen.
“But it’s not possible for you to buy fuel, at N165 when your actual cost is far from the value. We need to understand what this subsidy means. Today when PMS comes into this country, we transfer to the marketers at N113 for us to realize N165 at the port. This is a reality. So, that means whatever is the cost, anything after that value is subsidy so someone has to pay for it. So, every difference between 113 and that value is subsidy.
“So, somebody has to pay for it. There is no way today that you can land a litre of fuel of pms to the ports even at N419/445 exchange rate at less than N400 to a litre. In some instances, you may be subsidizing two hundred and something to a litre and with this regime, it is impossible for you to avoid all the wrongs things that are happening ; round tripping, closed border smuggling, document forgery, as long as arbitrate is there, you will continue to have these challenges and so cannot hold NNPC accountable for it because it’s a value chain that involves everybody. NNPCL of today will no longer be required to go to FAAC. And the reason is very simple. It’s expected to pay taxes, royalties, dividends.
In his presentation, the chairman of the Economic and Financial Crimes Commission, EFFC Abdurasheed Bawa who was represented by the Head of Operations, Micheal Wetcas pledged to work together with the relevant authorities to enhance transparency in the oil and gas sector.
“For us in the EFCC, we are determined to continue to work closely with stakeholders in the extractive sector to enforce accountability. We will continue to hold accountable those who breach the public trust in the sector whether they are corporations or individuals, whether local or foreign. The laws enforce by the commission target contravention of legal stipulations on transparency and accountability in both public and private sectors. As far as the extractive industry is concerned, the most critical challenge is how to achieve a pro Nigerian meeting of minds on the platform of extant laws and regulations between investors and regulators.
Similarly, the Chairman of the Independent Corrupt Practices and Other Related Offences Commission, ICPC, Prof. Bolaji Owasanoye cautioned Nigerian against signing agreements that were counterproductive.
“ICPC serves as secretariat for the inter agency committee on IFF. We have focused on building capacity of line officers from the member agencies in particular and other MDAs on negotiation of agreements (if you sign a bad agreement, you will feel the consequences of such bad agreement and the evidence on ground right now is that Nigeria currently loses about 60 percent of her revenue to bad agreements) in sectors that facilitate IFFs notably oil and gas, trade and investment, taxation and environment.
On his part, the Executive Secretary, Nigerian Extractive Industry Transparency Initiative, NEITI, Ogbonnaya Orji reeled out recent earnings from oil, pleading the national assembly to always use their report for data purposes.
“From our records, between 1999 and 2020, Nigeria has earned $741.74 billion from oil and gas alone. From the solid mineral sector, we have already counted in Naira, N624 billion has been earned. In forum like this should be strengthened with data and that is where NEITI will continue to insist that we work with the National Assembly. The National Assembly needs information on what is paid, what is received and what the money is used for, and NEITI has that data
In their respective speeches, the Senate President, Ahmed Lawan represented by Chairman, Senate Committee on Anti-Corruption, Suleiman Abdu-Kwari and the Speaker of the House of Representatives, Femi Gbajabiamila represented by the deputy majority leader, Hon. Peter Akpatason bemoaned oil theft in Nigeria, saying that accountability and transparency were much needed in the oil sector to make impact in the foreign earnings of Nigeria.
Earlier, the chief host and Chairman, House of Representatives Anti-Corruption Committee, Hon. Shehu Garba in his welcome remarks said the summit was essentially organized to provide platforms for conversations on the provisions of the legal and regulatory framework in the oil and gas sector.
