NNPC: Experts Finally Speak on Arrest, Mismanagement of Over $2.9 Billion for Refinery Construction
- Energy and economic experts have reacted as the country's oil business is once again at the core of a major corruption topic
- Investigations and arrests have been made in connection with the misappropriation of about $2.9 billion meant for refinery restoration
- Investigations are underway into the $1.56 billion given to the Port Harcourt refinery, $740 million to Kaduna, and $656 million to Warri
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Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
As investigations and arrests related to the mismanagement of more than $2.9 billion intended for refinery rehabilitation continue to rock Nigeria, the country's oil industry is once again at the epicenter of a massive corruption storm.
Source: Getty Images
Energy and economic experts have demanded a thorough investigation, prompt prosecution of those responsible, and extensive reforms to stop a recurrence.
A number of high-ranking former executives from the Port Harcourt, Warri, and Kaduna refineries were recently arrested by the Economic and Financial Crimes Commission (EFCC) on suspicion of financial irregularities in the multibillion-dollar rehabilitation projects.
BusinessDay reported that Efifia Chu, the former managing director of Warri Refining and Petrochemical Company, and Ibrahim Onoja, the former managing director of the Port Harcourt Refining Company, are among those detained.
The $1.56 billion allotted to the Port Harcourt refinery, $740 million to Kaduna, and $656 million to Warri are the subject of investigations.
Nigerians react
Alex Nnaemeka, a specialist in economics, responded to the situation by saying that anti-graft organizations such as the Independent Corrupt Practices Commission (ICPC) and the EFCC need to do more than just make superficial inquiries.
In order to purify the Nigerian National Petroleum Company Limited (NNPCL) and act as a warning to others, he emphasized the necessity of identifying and expelling collaborators who are still serving.
As a matter of national interest, he said, the situation necessitates the arrest of all suspects.
“Hopefully they cooperate, and if found guilty, they pay for their crimes,” he added.
Nnaemeka also highlighted the inequality between communities that produce oil and other areas that profit from it, complaining that while the Niger Delta continues to live in poverty, officials in the North and West seem to be embezzling the money.
The events that are transpiring are not only concerning but also a scathing indictment of systemic failure inside Nigeria's oil sector, according to a specialist in the energy sector who provided commentary on the matter.
The expert contended that at least two brand-new modular refineries with cutting-edge technology and increased production efficiency might have been constructed with the $2.96 billion under inquiry.
Additionally, he denounced the recent discovery of N80 billion in a suspect's personal bank account, claiming it was an obvious indication of regulatory and internal control shortcomings.
He called such statements "political theatre" and questioned the previous official narrative that the refineries were starting up at 70% capacity.
Testimonies from plant employees and field reports indicate that the facilities have remained mostly inoperable.
The refineries in Warri and Port Harcourt are fundamentally unable to produce Premium Motor Spirit (PMS) because they lack catalytic reforming equipment, which are necessary for this process.
The expert attributed this to deceptive public communications and inadequate project planning.
Source: Getty Images
The choice to renovate decades-old refineries without first guaranteeing the availability of pipes for crude delivery was also denounced by economic analyst Godwin Ekpe.
He emphasised that the refineries would never be profitable without operational feedstock infrastructure, such as the Escravos-to-Kaduna pipeline.
Building smaller, modular refineries that are suited to Nigeria's present market demands would have been a better prudent choice, according to Ekpe.
He urged a comprehensive examination of the NNPCL's and its former Group CEO Mele Kyari's roles, pointing to a history of media manipulation, financial mismanagement, and public deceit.
He called on the government to carry out a forensic audit of the procurement procedure, contractor involvement, project milestones, and the money spent.
The ongoing issue is made worse by support workers threats of going on strike, according to public affairs specialist Ekweribe Odo.
Reps investigate NNPC, oil firm over $1.6bn debt
Legit.ng reported that the Nigerian National Petroleum Company Limited and oil businesses' unpaid debts to the Federation Account are the subject of an investigation launched by the House of Representatives Public Accounts Committee on Tuesday, February 18.
Following inquiries from the Office of the Auditor-General for the Federation about NNPCL's financial responsibilities, the subcommittee chairman, Akinlade Isiaq, presided over the investigative hearing.
According to the reports, NNPCL and other oil companies owed the Nigerian Upstream Petroleum Regulatory Commission $1.6 billion in royalties as of the end of 2021 under the terms of the Modified Carry Arrangement, Repayment Agreement, and Production Sharing Contract.
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