In response to what they deem as “blatant misinformation” surrounding their activities, high-level sources in NNPC Ltd. have taken the initiative to explain and clarify the operations of the 46-year-old energy giant. The move comes as the company aims to foster a better understanding of its activities amid recent misinterpretations and misconceptions.
One of the key issues addressed by the sources is the recent allegation made by the Nigeria Extractive Industry Transparency Initiative, stating that Nigeria lost a staggering N16.25 trillion to oil theft in the 12 years leading up to 2021. NNPC Ltd. refuted the claim, asserting that oil theft has been a longstanding issue in the country. They revealed that production levels fell below one million barrels a day in 2022 due to efforts to curtail theft, but a comprehensive industry-wide security apparatus launched that year, along with the establishment of a command-and-control center, helped turn the tide. The result was a remarkable increase in crude oil production from 900 thousand barrels a day to over 1.6 million barrels a day within a year. Despite the losses incurred during this period, NNPC Ltd. continued to meet its obligations to contractors and the Federal Government through taxes.
Addressing allegations of petrol imports worth $11.3 billion in 2021 and a total annual import bill of $28 billion for all refined products, the sources emphasized that the ongoing reconciliation of the company’s financial transactions would ultimately reveal the truth. They dismissed the claims as malicious accusations and invited those in doubt to reach out to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for validation or conduct a forensic audit.
The sources also addressed allegations made by some analysts and lawmakers regarding the subsidy bill, which purportedly amounted to N3.7 trillion from January to June 2023, and the N2.53 trillion spent on subsidies for real and fictitious products in 2011. Denying the allegations, NNPC Ltd. stated that the ongoing reconciliation process would provide clarity on these matters.
Regarding concerns raised by oil industry experts about NNPC being the only major oil company in the world that sells all its crude through middlemen, potentially fueling illegal arbitrage and corruption, the sources shed light on the establishment of NNPC Trading Ltd. The new trading company is now responsible for managing the sale of crude oil. They emphasized that NNPC, as an oil company, owns refineries and a trading arm where buying and selling can occur. This arrangement allows for various trading options, including selling to end-users such as refineries or reselling to international companies. They stressed that these transactions follow willing buyer, willing seller arrangements and denied the misuse of the term “middlemen.”
On the topic of privatizing the refineries to foster competition and address the subsidy regime, NNPC Ltd.’s management clarified that they are not averse to privatization and would consider it if it proves to be a beneficial move.
In light of the comprehensive explanations provided by NNPC Ltd., stakeholders and the public are now better informed about the company’s operations and the efforts being made to dispel misinformation. The move represents a significant step toward promoting transparency and accurate understanding of NNPC Ltd.’s role in Nigeria’s energy sector.
