NNPC ends 2021 with global award for oil, gas reforms
By Edith Ike-Eboh and Emmanuel Afonne
The Nigerian National Petroleum Company (NNPC) Limited has ended the year on a bright note after it won an award as the overall best company in oil and gas reforms at the Open Government Partnership (OGP) global awards which was held in Seoul, South Korea.
Nigeria picked the award at the expense of other countries in Africa and the Middle East that were implementing the OGP at the summit of member countries, for setting up a Beneficial Ownership (BO) registry to end anonymous companies in the country.
The Deputy Director/Head Communications & Advocacy of the Nigeria Extractive Industries Transparency Initiative (NEITI), Obiageli Onuorah, said in a statement that a lot of factors were considered before Nigeria was picked for the award.
Onuorah said the summit considered the government’s overall commitment to reforms in the oil, gas and mining sectors and its support to NEITI to establish a beneficial ownership register of companies in business in Nigeria’s extractive sector.
Also considered were the broader reforms in beneficial ownership disclosure by the CAC through the amendment of the Companies and Allied Matters Act (CAMA) and the recent Petroleum Industry Act (PIA).
Commenting on the feat, Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji, expressed delight that the international community was beginning to assess Nigeria’s efforts at fighting corruption and deepening its democracy.
He described the award as impressive and encouraging, considering the political will and enormous resources the government had deployed to reposition the extractive industry to benefit all Nigerians.
The Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, congratulated Nigeria on the award and noted that establishing a beneficial ownership register had helped Nigeria “track, reduce and arrest corrupt practices that are undertaken either by companies or beneficial owners of companies.”
The Open Government Partnership (OGP) is a partnership of 78 countries and 76 local governments – together representing more than 2 billion people – along with thousands of civil society organisations.
They work together to make governments more transparent, less corrupt, participatory and responsive to its citizens.
Over 8,000 members of the OGP community voted in the Impact Awards, which had Tunisia and Ghana coming second and third respectively.
Still in the week under review, the Image Merchants Promotion (IMPR) recognised the Nigerian National Petroleum Company Limited (NNPC) as the best organisation in Community Relations activities.
This followed records of its impactful community relations projects across the country.
Speaking at the Award Ceremony in Abuja, the Chief Executive Officer of the IMPR, Mr Yushau Shuaib, said the recognition of the national oil company as the overall best in Community Relations category was purely based on visible multi-billion-Naira projects executed at its different operational locations and beyond.
Shuaib stated that the NNPC had ensured adequate utilisation of Public Relations strategies in the execution of community relations services, noting that the people-oriented initiatives were professionally driven.
“The award of N6bn worth of contracts to six oil and gas communities in Niger Delta and the revival of 5.4 hectares of land for the construction of a 200-bed capacity hospital and a diagnostic centre in Gombe State among others received wider publicity and commendations from beneficiaries,” he said.
Receiving the award on behalf of the NNPC Limited, the Group General Manager, Group Public Affairs Division and former President of the Nigerian Guild of Editors, Mr Garba Deen Muhammad, said as a socially responsible entity, the company would continue to embark on CSR interventions that would add value to the society.
He pointed out that NNPC was one of the few establishments that had a policy document on Corporate Social Responsibility (CSR), saying that in spite of the current reality of Petroleum Industry Act that stresses profitability, the company would remain committed to its payoff – touching lives in many positive ways.
Some of the organisations in attendance were, Defence Headquarters (DHQ), the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Department of State Security Service (DSS), the Nigeria Customs Service (NCS), National Information Technology Development Agency (NITDA), among others.
In another development, the Works and Housing Minister Mr Babatunde Fashola dispelled insinuations that the NNPC was taking over the job of the ministry, stressing that the arrangement was coming under Executive Order 7, which existed during the last administration, but was never deployed.
The Minister made the disclosure during the symbolic presentation of cheque for the 21 critical roads funded by NNPC through the Tax Credit Scheme at the Ministry’s headquarters in Abuja.
Shedding light on the scheme, the Minister said, “NNPC is not taking over roads, NNPC is not constructing roads, NNPC is just putting forward its tax liabilities to the authority who is supposed to collect, which is the Federal Inland Revenue Service, (FIRS).
Fashola further made it clear that this is a tax credit intervention and essentially, the private sector company is putting forward what should have been its tax compensation for liabilities to government.
He explained that the scheme was not for one company alone as any company that was interested in it can apply to Federal Government.
Fashola said the Buhari administration amended the Executive Order 007 to give room for the roads to be impacted to be diverse and also allow smaller companies to come together as a group to use their tax liabilities for smaller roads that would aid their businesses.
He expressed happiness that the amendments attracted the interest of conglomerates like Dangote group, the oil industry which was stepping in with 600 billion Naira to address 21 roads covering over 1, 800 kilometres.
Speaking further on the amendment made by President Buhari, Fashola revealed that a governing process had been put in place that required the Ministry of Works and Housing to look into the certification, send them to FIRS for verification within five days, after which NNPC was expected to pay within 30 days.
He also said that an agreement had been reached with the contractors that nobody would ask for price variations even though some of the contracts were over 10 years old.
Also speaking, Group Managing Director and Chief Executive Officer of the NNPC Limited, Malam Mele Kyari, described the initiative as remarkable because of the difference the funding would make in the country’s roads.
Represented by the Chief Financial Officer, Mr Umar Ajiya, the GMD noted that due to the incessant vandalism of the NNPC’s pipelines, the national oil company had resorted to hauling products by road.
“This is a very remarkable event simply because the condition of the road network in the country is affecting our business in our quest to participate in the energy security of Nigeria.
“These roads have also suffered some failure over the years and sometimes we find it difficult to pass the road.
“It is on that note, that we found it necessary and very important to step in to support the federal ministry of works in funding these numbers of roads,” he explained.
The Chairman, FIRS, Muhammed Nami, explained that the scheme would encourage taxpayers to use company income tax payable by them to fix Nigeria’s critical infrastructure in exchange for tax credit.
“This tax credit is issued after a confirmation process has taken place using our audit procedures that verifies that monies that ordinarily should be invested in these roads are actually invested in the roads.
“Once that is done, we then issue a tax credit to the taxpayer.
“This is also to support the fact that there is a social contract between the taxpayers and the government.
“What government is using the Executive Order 007 to do is to give value to taxpayers’ money.
“This is unprecedented and very necessary for us to fix the roads in Nigeria because the annual budgetary allocations for these roads are not only minimal but absolutely insufficient.”
The occasion also witnessed the signing of an MoU, among the stakeholders, including the ministry, FIRS, NNPC Limited and the contractors.
Also in the week, a professor of capital market at the Nasarawa State University, Prof. Uche Uwaleke, called for the removal of fuel subsidy in line with the provisions of the Petroleum Industry Act, PIA.
Uwaleke who bared his mind on the development said that for the country to maximise the benefits of the PIA and attract investors to the oil and gas industry, especially the downstream, fuel subsidy had to stop.
He said contrary to popular belief, according to the World Bank, it was the rich, not the poor who disproportionally benefits from Nigeria’s fuel subsidy.
Nigeria’s poor rely primarily on public transportation as such their per capita fuel consumption were significantly less than the country’s rich, who generally use private vehicles.
He therefore suggested that compensation schemes must be put in place to mitigate the impact of the removal.
On the topical issue of energy transition which had attracted global attention, he noted that fossil fuel would remain relevant and important for a long time to come, adding that Nigeria needed the revenue from the petroleum industry to develop the other sectors of the economy.
Also in the week, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) called for a paradigm shift in the relationship between the labour union and management with a view to promoting organisational profitability.
The outgoing Group Chairman of PENGASSAN, NNPC Group Executive Council (GEC), Comrade Victor Odor, stated this on Wednesday at the 6th Triennial Delegates’ Conference of the Council which held in Abuja.
Odor said given the new reality occasioned by the PIA, there was need to review Union-Management engagement strategies to focus more on collaboration, synergy and support for policies that would improve the company’s revenue base and sustainability prospects.
He commended the GMD for the numerous initiatives geared towards the progress of the company.
Also speaking at the event, NNPC CEO, Kyari, said that the new NNPC would be driven by performance and profitability.
He noted that the PIA had provided the enabling structures to support the NNPC’s viability and growth.
The GMD who was represented by the Chief Financial Officer (CFO), Mr Umar Ajiya, stated that management would continue to leverage on industry-wide coverage to build a stronger national oil company that would support the growth of the nation’s economy.
“Our vision is to create an NNPC Limited that is driven by performance and profitability, and I am counting on the unwavering support of our in-house unions and all NNPC employees to achieve this.
“The PIA has certainly created a major restructuring and at the same time more opportunities for growth across the industry,” he said.
Kyari urged the union and staff to demonstrate practical commitment in the affairs of the organisation, assuring of job security for staff in compliance with the provisions of the PIA which guarantees that employees of NNPC as a Corporation were deemed to be employees of NNPC Limited on terms and conditions not less favorably enjoyed prior to their transfer of service.
Also, the Group General Manager, Group Public Affairs Division of the NNPC, Mr Garba Deen Mohammad and the Vice President of PENGASSAN, Comrade Matthew Duru, commended the Odor-led executive for providing quality leadership for the union in the last two years.
In another development, the Nigerian Pipelines and Storage Company Limited (NPSC) had been urged to evolve new ways to boost its revenue generation and ensure cost optimisation.
NNPC’s Group Executive Director, Downstream, Engr. Adeyemi Adetunji gave the charge at a retreat organised by the NPSC.
He reiterated the need for the company to align itself with the post PIA NNPC
Speaking earlier, the Company’s Managing Director, Engr. Mansur Sambo said the aim of the retreat was to identify key challenges, best possible solutions, and strategies to make NPSC viable and sustainable in a PIA-driven era.
He explained that the essence of bringing together all Managers across NPSC was to identify the necessary steps that would reactivate and revitalise the revenue drivers as well as optimise the company’s operational cost.
He charged the Managers to be bold in making necessary business decisions, while assuring them of Management’s commitment and support towards the delivery of the Company’s mandates to grow and sustain its business.
The Leadership of the in-house union, Comrade Nurudeen Adetoro, Chairman, PENGASSAN and Comrade Baba Kaumi, Chairman, NUPENG, pledged their support to the new Management.
The Union urged the new Management Team to always work in collaboration with the members of Staff and Union.
On a final note, the Research and Innovation (RTI) Division of NNPC inaugurated NNPC Innovation Interface Community Hub (NIICH).
The development was inspired by the need to provide a forum for creative minds within the company to convert their ideas into valuable products and solutions.
The hub was designed to provide a platform to create and recreate new ideas as well as re-invent for the purpose of relevance, and resilience in the eco system where the industry operates.
Speaking at the launch, Engr. Betty Ugonna, Chief Innovation Officer of the NNPC, said the focus was to leverage on the interface community through the Hub inspire an innovative culture, and provision of services through viable solutions.
In his presentation, Group Executive Director, Ventures and Business Development, Dr Billy Okoye, stated that the directorate would do everything within its mandate to sustain the Hub.
The highpoint of the event was the formal launch of the hub by GMD/CEO of NNPC; Malam Mele Kyari through a virtual speech.
Subsequently, a virtual demo session of the hub was made by Engr. Ibrahim Ajiboye, the RTI’s Innovation Engineer for Digital Transformation.
The NIICH would provide for NNPC a forum for interactions, training sessions, webinars, periodic, evaluation and development of prototype ideas and innovations within the industry as well as with business partners.
