Nigerian National Petroleum Corporation

Nigerian National Petroleum Corporation

Type	State-owned enterprise
Industry	Oil and gas
Founded	1977
Headquarters	Abuja, Nigeria
Products	Crude Oil, Gas, petroleum productss, petrochemicals,
Website	www.nnpcgroup.com

The Nigerian National Petroleum Corporation (NNPC) is the state oil corporation through which the federal government of Nigeria regulates and participates in the country's petroleum industry.

History

NNPC was established on April 1, 1977 as a merger of the Nigerian National Oil Corporation and the Federal Ministry of Mines and Steel. NNPC by law manages the joint venture between the Nigerian federal government and a number of foreign multinational corporations, which include Royal Dutch Shell, Agip, ExxonMobil, Chevron, and Texaco (now merged with Chevron). Through collaboration with these companies, the Nigerian government conducts petroleum exploration and production. In 2007, the head of the Nigerian wing of Transparency International said salaries for NNPC workers were too low to prevent graft.^[1]

The NNPC Towers in Abuja is the headquarters of NNPC. Consisting of four identical towers, the complex is located on Herbert Macaulay Way, Central Business District Abuja. NNPC also has zonal offices in Lagos, Kaduna, Port Harcourt and Warri. It has an international office located in London, United Kingdom.

NNPC Organisational Structure

The NNPC Group comprises the NNPC Board, the Group Managing Director's office, Eight Directorates as listed below. Each of the Directorates is headed by a Group Executive Director (GED). Its Divisions are headed by Group General Managers (GGM) while its subsidiary companies are headed by Managing Directors. NNPC has several subsidiaries, two partly owned subsidiaries and 16 associated companies.

Directorates:

• Exploration and Production
• Refining and Petrochemicals
• Commercial and Investment
• Finance and Accounts
• Corporate Services
• Gas and Power
• Engineering and Technology
• Business Development

Divisions and Subsidiaries:

Installations

NNPC has sole responsibility for upstream and downstream developments, and is also charged with regulating and supervising the oil industry on behalf of the Nigerian Government. In 1988, the corporation was commercialised into 11 strategic business units, covering the entire spectrum of oil industry operations: exploration and production, gas development, refining, distribution, petrochemicals, engineering, and commercial investments. The subsidiary companies include:

Legal premise

According to the Nigerian constitution, all minerals, gas, and oil the country possesses are legally the property of the Nigerian federal government. As such, the oil corporations operating in Nigeria appropriate portions of their revenue to the government, which accrues nearly 60% of the revenue generated by the oil industry in this manner. The revenue gained by the NNPC accounts for 76% of federal government revenue^[1] and 40% of the entire country's GDP. As of 2000, oil and gas exports account for 98% of Nigerian export earnings.

Corruption at the NNPC

KPMG Report

In December 2011, the Nigerian government permitted a forensic report conducted by KPMG to be published. The audit, commissioned by the Ministry of Finance following concerns over the NNPC’s transparency, detailed the NNPC’s sharp business practices, violation of regulations, illegal deductions of funds belonging to the state, and failure to account for several billions of naira that should go to the federation account.^[2]

Auditors found that between 2007 and 2009 alone, the NNPC over-deducted funds in subsidy claims to the tune of N28.5 billion. It has not been able to account for the sum ever since.^[3]///

Willbros Group Inc

In May 2008, Willbros Group Inc, a US company, admitted to making corrupt payments totalling over $6.3 million to officials at the NNPC and its subsidiary NAPIMS, in return for assistance in obtaining and retaining contracts for work on the Eastern Gas Gathering System (EGGS).^[4]

ABB Vetco Gray

In July 2004, ABB Vetco Gray, a US company, and its UK subsidiary ABB Vetco Gray UK Ltd, admitted to paying over $1 million in bribes to officials at NNPC subsidiary NAPIMS in exchange for obtaining confidential bid information and favourable recommendations from Nigerian government agencies.^[5]

Trafigura and Vitol

In November 2013 after a report was published by Swiss Non-governmental advocacy organization - Erklärung von Bern - allegations of heavy fraud surfaced, placing the NNPC under suspicion of siphoning off $6.8 billion in crude oil revenues.^[6][7][8]

Unremitted Funds

On the 9th of December 2013, a letter from the Central Bank of Nigeria (CBN) Governor to the President of Nigeria, Goodluck Ebele Jonathan, dated 25 September 2013 showing details that the NNPC had not remitted over $49.8 billion proceeds of crude oil sales to the Government surfaced. Investigations later showed that out of the unremitted $49.8 billion, $20 billion was actually embezzled. No staff of the NNPC or Ministry of Petroleum has so far been punished, though on Thursday, 20 February 2014, the whistle-blowing CBN Governor was suspended from office by the President.

References

External links

• NNPC website