Challenged, NNPC’s Kyari Maintains Course

Mele Kyari
Mallam Mele Kyari

Clearly invigorated from the deserved plaudits trailing his first anniversary in the saddle as NNPC’s boss, Mallam Mele Kyari, brushes aside allegations from shadowy oil syndicates – holding his focus on consolidating and further deepening good governance, writes Louis Achi

Via his Twitter handle, Governor Nasir el-Rufai of Kaduna State lauded but also warned the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, that oil cabal would soon come after him. El-Rufai’s prescient prediction came against the background of the sweeping, disruptive governance changes the GMD was putting in place.

Just as the governor predicted, several online publications, particularly two Nigerian-owned, US-based online platforms carried reports alleging that Nigerian officials and NNPC staff sold 48 million barrels of diverted crude oil. Subsequently, several television broadcasts and commentaries in respect of the same subject were aired.

The publications mirrored the content of a recent letter forwarded to NNPC on behalf of SAMANO SA DE CV by its solicitors, Messrs. Lords & Temple.

The NNPC though reacting late, has however dismissed the publications’ allegations, stating unequivocally that they are “falsehoods, offensive, gold-digging and a calculated attempt by the said SAMANO SA DE CV (SAMANO) working in concert with its local and international agents to intimidate, blackmail and extort money from the Federal Government of Nigeria and NNPC.”

The national oil coy further made specific clarifications which apparently unmasked SAMANO SA DE CV (SAMANO)’s dodgy plots and unwholesome schemes.

With its detailed, strong rebuttal of the allegations of missing 48 million barrels of crude oil valued at $2.5 billion, Kyari’s NNPC has left no one in doubt it is not about to tolerate shadowy international briefcase companies and syndicates of fraudsters adept at targeting Nigeria with all manner of tricky proposals that are of no benefit to the country.

These companies usually come up with ‘sweetheart’ deals and proposals of joint ventures only to turn round to claim breaches and then resort to blackmail in an attempt to extract undeserved monetary benefits for themselves.

If they succeeded in the past, Kyari has just shown them he is not about to fall for their tricks. NNPC clearly did a detailed investigation of this particular company and exposed its fraudulent claims and criminal history.

But this time, the syndicate posed as providing information that would lead to recovery of stolen national asset it clearly didn’t exist.

The corporation revealed that SAMANO first contacted officials of the Federal Government sometime in 2015, indicating it had been approached by an unnamed group in China to buy 48 million barrels of Nigerian crude, which they believed to have been stolen from Nigeria. SAMANO had alleged that the oil was stolen and shipped to China before the assumption of office of President Muhammadu Buhari in 2015.

SAMANO had then requested to be allowed to purchase the ‘stolen’ crude oil after its recovery by the Federal Government. In a seeming volte-face, SAMANO indicated that it was no longer interested in buying the crude as it only obliged the Federal Government with the information to assist President Buhari’s anti-corruption fight.

From investigations and checks with top experts, based on the operations and state of the international crude oil market, it seems impossible to ship 48 million barrels of crude oil to just go missing from Nigeria to China without any record or trace.

Corroborating the national oil company’s position, an oil expert who spoke on the condition of anonymity, queried the huge volume alleged to be missing.

“It is not possible. How did they move such volume of crude oil? From which terminal was it moved? If you are able to get such volume out of the country illegally, it will require the active participation of over 20 agencies of the government that will sign off on it. How would you pull that off? If you succeeded in pulling that off, the impact on the country’s finance would be immediate,” the expert stated.

Also reacting, another operator in the sector, dismissed the allegation of 48 million stolen crude. “This looks like another false alarm, like the $48.9 billion alleged to be missing or unaccounted for by the NNPC a few years ago. May be there is a special appeal the number 48 holds to those who want to attack NNPC,” he quipped .

According to NNPC, the daily production of crude oil in Nigeria, as of 2015, was below 1.6 million barrels. Forty-eight million barrels of crude oil would have been the total production capacity of the country for a whole month. It was simply impossible for one-month crude oil production for the entire country to disappear.

Besides, the NNPC was also aware that as of the time and considering the fact that China is one of the most regulated economies in the world, the export of crude oil from Nigeria to China was exclusively undertaken by four known companies approved by the Chinese government, under its control, ownership, and management.

It would, therefore, have been impossible to transport 48 million barrels of crude oil from Nigeria to China without the active involvement of the said companies.

From an economic perspective, it made little sense that anyone would store that volume of crude oil in China for such a considerable period having regard to the attendant significant storage costs.

It is noteworthy that the Chinese government had, through its officials, stated emphatically in response to this allegation at different fora, including the United Nations General Assembly that there was no stolen Nigerian crude oil stored in any port or terminal or storage facility in China.

Given the fact that the recovery of the country’s looted resources has been an integral component of state policy under the current administration, a further decisive step was taken to establish or confirm SAMANO’s claims.

The Federal Government empaneled a Presidential Committee on Recovery of Stolen Nigerian Crude Oil in response to the claims made by several companies including SAMANO over alleged stolen Nigerian crude oil allegedly stored in China.

The presidential committee requested that SAMANO furnish it with proof of its allegations but SAMANO declined this request.

Despite the failure of SAMANO to produce verifiable evidence in support of its allegations, relevant officials were mandated to pay an in-person visit to China and further investigate SAMANO’s claim.

It was during this fact-finding trip to China that it was discovered that SAMANO’s claim was false as there were no 48 million barrels of stolen Nigerian crude oil in any port, terminal or storage facility in China.

The presidential committee also discovered that all the documents presented by SAMANO in support of its claims were not genuine as a result, the government terminated all communications with SAMANO as it became apparent that its claim was a hoax.

“When SAMANO realised the game was up, it apparently opted for blackmail and intimidation of key government officials. It curiously threatened to publicise the fact that the non-existent crude oil had been recovered, sold and proceeds looted by senior government officials and other personalities when it knew this was absolute falsehood.

“SAMANO boldly made several demands including the payment of $125 million by the government officials to prevent it from disclosing this information to the public. This demand soon morphed into harassment as it embarked on a mischievous exercise to embarrass the Federal Government on international media platforms and before several international institutions like the Organisation of Petroleum Exporting Countries (OPEC) all in a calculated bid to blackmail the government and NNPC to play ball and pay it a tidy amount of money as compensation,” a source said.

Enter DSS, Police, AGF

Flowing from the constant nuisance SAMANO was constituting, NNPC was compelled to make a formal report to the Department of State Services (DSS) and the Nigeria Police, while other victims wrote petitions in respect of the same subject to the Attorney-General of the Federation, Abubakar Malami.

After investigations by the police and the DSS and confessions by agents of SAMANO, it was discovered that the allegations of conspiracy, forgery, obtaining money by false pretence, blackmail and extortion were well-founded and that some of the fraudulent activities of a certain Mr. Ramirez and Mr. Jose Salazar Tinajero (both agents of SAMANO) constituted a threat to the national security of the country.

According to Afe Babalola & Co, NNPC’s counsel, during its investigation, the Nigerian police discovered that SAMANO is part of a notorious crime syndicate that habitually intimidates, blackmails, and defrauds government officials and other high-profile persons.

The legal counsel explained further, “For instance, it was discovered that Mr. Ramirez, SAMANO’s representative, was indicted by the U.S. District Court in the Southern District of Texas as the mastermind of a scheme leading to the loss of several millions of dollars through various mail and wire frauds between 2010 and 2013.

“The police became aware that Mr. Ramirez fled the US and settled in Nigeria where he continued his criminal activities in conjunction with SAMANO and its managing director. There is a subsisting warrant issued by the United States government for the arrest of Mr. Ramirez. His wife has been convicted in the United States for her role in a visa lottery scam he masterminded.”

Some of these investigations, according to NNPC’s counsel, have led to the filing of Charge No.: FCT/HC/BU/CR/134/2019 between Federal Republic of Nigeria v. Marco Antonio Ramirez & 4 Others at the High Court of the Federal Capital Territory, Abuja. Some of the offences in the charge are criminal conspiracy, forgery, extortion and attempt to obtain money by false pretence.

On the part of NNPC, the corporation is convinced that “the chameleonic posture of SAMANO as a potential buyer, then gratuitous informant and subsequently a whistle-blower demonstrates its desperation to hoodwink and defraud the Federal Republic of Nigeria by all means,” as its counsel captured the unfolding matter.

The NNPC also understands that Mr. Ramirez and his cohorts are being prosecuted by the Economic and Financial Crimes Commission (EFCC) for other unrelated offences at the High Court of the Federal Capital Territory, Abuja in Charge No: FCT/HC/CR/147/2016 and the Federal High Court, Lagos in Charge No: ID/2763/2016.

Having seen that its ploy was unravelling and in what appears a desperate last-ditch effort, according to NNPC’s reaction, SAMANO claimed it was entitled to compensation for supplying information on the missing crude oil pursuant to the Federal Government’s Whistle Blower Policy.

“But they forgot that the Whistle-blower Policy of the Federal Government only commenced in December 2016 while the flawed information they supplied was in 2015. Worse, it failed to establish that the information it allegedly provided led to any recovery or that the information was disseminated through the proper channel,” it stated.

Kyari Maintains Course

NNPC is arguably the biggest state-owned oil company in Africa. NNPC, Algeria’s Sonatrach, Angola’s Sonangol and other notable NOCs in Africa stand on the brink of significant disruption – and of substantial opportunity – as a new era of structurally lower oil prices challenges business models that had long relied largely on exploration and production of hydrocarbons, oil.

To manage these challenges require new thinking and boldness. And this is where Kyari comes in. He was appointed GMD by President Muhammadu Buhari, July 8, 2019.

Perhaps his toughest call in an industry he has spent much of his professional life in, Kyari has responded to his new top-draw responsibility by quickly taking charge in close synergy with his corporation’s oversight entity, the Ministry of Petroleum Resources. His one-year trajectory has simultaneously demonstrated a fundamental grasp of what fossil energy means and a nimble understanding of the imperative of adroit governance of the giant that supervises the strategic sector.

Besides its role as the bedrock of the Nigerian economy, the petroleum industry has been one of the key defining phenomena of the country’s post-independence history. This fact centralises NNPC in the nation’s political economy, given the corporation’s assigned role in the industry. Not surprisingly, the corporation’s experience has been marked by struggles over what the corporation controls and over who controls it.

Kyari set sail by defining a vision of NNPC’s transformation and sent a clear message that the corporation’s lukewarm governance narratives of the past are gone for good.

With Kyari’s new vision of the corporation boldly anchored on the principle of ‘Transparency, Accountability, Performance and Excellence’ (TAPE), there is a renewed attempt to achieve global excellence.

Deploying more clarity to both staff and critical industry stakeholders, he stressed that going forward, excuses for poor performance are unacceptable.

He said, “We either deliver or walk away in shame.”

Perhaps, one of the most important governance initiatives that dealt a blow to the extreme operational opacity reputation of the corporation is ‘Operation White,’ a presidential mandated collaborative initiative, driven by NNPC with the active participation of regulatory and security agencies as well as other stakeholders in ensuring that all molecules of regulated petroleum products imported by NNPC are accounted for and utilised in the country.

This initiative effectively ended the era of poor transparency in the corporation’s governance style.

On account of this, the Nigeria Extractive Industries Transparency Initiative (NEITI) commended the decision of NNPC to make public its audited accounts for the first time in its history with the publication of its 2018 Audited Financial Statement (AFS) on its website. This is the first in 43 years.

Kyari also followed up with a strong commitment by charging the chief operating officers of directorates to develop five key priority areas (KPA). These include the upstream, refining and petrochemicals, downstream and the finance/accounts directorates.

At a ceremony to sign off on the performance bonds for the priority areas, he repeated that there would be no hiding place for non-performance. Currently, several of those KPAs have been delivered, while a few of them are still being pursued vigorously across the entire value-chain of the NNPC business.

Significantly, Kyari has demonstrated a bold move in appointing the highest number of women into management positions such as the chief operating officer (Downstream Directorate), chief strategist/planner, and chief research/innovation officer.

Kyari has recorded other important positives, including superintending the crude oil find in the Kolmani Structure in the Upper Benue Trough; signing of a Funding & Technical Services Agreement (FTSA) and Alternative Financing deal for NPDC’s OML 13 ($3.15billion) and OML 65 ($876million); achieving 20 percent year-on-year revenue reservoir studies alongside the upgrade of IDSL’s Data Processing Centre; $300 million reduction in AKK project cost via contract renegotiation; completion of feasibility studies for Condensate Refinery Project and the award of its Front End Engineering Design (FEED).

After it was exposed for what it was as a blackmail attempt, the sydincate continued to peddle falsehood by claiming that Kyari was grilled by the department of State Security, (DSS). THISDAY checks with DSS on its purported interogation of the Kyari proved not to be true as the agency denied that it even invited Kyari for questioning.