NNPC N287bn Profit: Atedo Peterside Got it Wrong.

By Leo Atakpu

Like doubting Thomas, Founder of IBTC Stanbic Bank, Atedo Peterside, in a tweet Sunday, 29 August called out the Nigerian National Petroleum Corporation to clarify a spurious allegation that it dipped its fingers in the federation account in order to announce a profit of N287bn.

He was reacting to President Muhammadu Buhari’s public presentation of NNPC’s audit report which posted a profit of N287bn for the very first time in 44 years of the existence of the corporation. But a couple of questions for  Atade Peterside and his ilk: is it possible for an entity, signatories of a corporation to dip their hands into the federation account? Does this make any sense?  Obviously, their allegation is a white lie from the pit of hell that should be spurned by well meaning Nigerians. 

                           Leo Atakpu

The 2020 Audited Financial Statement of the NNPC is on its website for all to see as the current managers believe there is nothing to hide. The highlights of the 2020 AFS revealed that while the corporation’s financial position increased in total current assets by 18.7% compared to that of 2019, its total current liabilities increased by 11.4% within the same period. The group working capital remained below the line at N4.56trillion in 2020 as against N.44trillion in 2019, a decrease that could be attributed to the decline in the production of crude oil due to global impact of Covid-19. It is important to emphasise that this is the third consecutive year, the NNPC under the watch of Mele Kyari is publishing its Audited Financial Statement. Should such a fellow be condemned or praised? 

Nigerians can readily recall that President Muhammadu Buhari promised to turn around the fortunes of the then ailing national oil corporation and reposition it for profitability. This was the chief reason why he appointed Mallam Mele Kyari as the Group Managing Director of the NNPC in the first place. The strategy for the current handlers was clear: curb wastes, fight corruption, ensure transparency and accountability in line with the principles of the Extractive Industries Transparency Initiative (EITI) and the Open Government Partnership (OGP), both multi-stakeholder global initiatives, to which Nigeria is signatory, but more importantly, in keeping with his administration’s electoral promises to Nigerians.

When in 2019 Financial Audit Statement, the NNPC age-long losses were reduced from N803bn to N1.7bn, it was obvious that the corporation was heading somewhere pursuant to government’s agenda to turn around the fortunes of the NNPC. It was clear that if the right measures and controls were sustained, the corporation will eventually break the age-long jinx and so many watchers of events at the nation’s oil corporation weren’t too surprised when it eventually declared a net profit of N287billion in year 2020. 

This, in my view, calls for celebration of persons who made it happen because, for the first time in its 44-year history, the bugaboo of NNPC having to make profits has been broken. It is common knowledge that the corporation under previous administrations and GMDs was a cesspool of corruption and notorious for national economic hemorrhage and Illicit Financial Flows (IFFs). But all that is now history and people like Atedo Peterside are stupefied with the reality. They marvel in disbelief that  something good is coming out of Nazareth. Peterside and his co-travelers can bear witness to the fact that there was  no publication of annual financial statements until 2018 when Malam Kyari released the very  first Audited Financial Statement of account of the NNPC. But the question to ask at this point is: where was Atedo Peterside and his breed all those years? He was never known, seen or heard to have asked any sort of question or comment he just made. Was Peterside not alive then? Has he suddenly woken up from slumber or just suddenly arrived from the moon to join the fray in making such unfounded allegation?

Nigerians are now home to the delivery of promised transparency and accountability by the current NNPC management. Acrimonious and distractive elements like Atedo Peterside do not need to make spurious, baseless and untenable allegations against the leadership of the NNPC. Apparently, Mele Kyari and his management team, working with the orders of President Muhammadu Buhari, have  ensured that the NNPC did not only take steps to end the era of posting losses, but have gone ahead over time to  post profit as revealed in the 2020 audit. Methinks they should be commended and not vilified by meddlesome interlopers.

The argument of Atedo Peterside that the NNPC ought not to post profit in year 2020 that had the covid-19 challenge falls flat on its face because, Atedo’s Peterside’s IBTC Stanbik Bank also posted profit same year of covid-19 devastation. Stanbic IBTC Holdings Plc reported a profit after tax (PAT) of N83.211 billion for the year ended December 31, 2020, showing an increase of 109 per cent compared to N75.035 billion in 2019.So where lies the argument that the NNPC shouldn’t have posted profit in the year of economic crisis occasioned by covid-19. Why did they not post heavy losses to substantiate the point that no profit can be made in 2020, year of pandemic? It is common knowledge that covid was a global problem- while some oragnisations made profits, others suffered losses. That is business life for you and nobody should deride the other just to score cheap political or sectional point.

It is instructive to emphasise that Nigerians should not play ethnic or political cards when it comes to national economic issues. Better still,  Atedo Peterside can throw his hat into the Nigerian political  ring for the 2023 presidency or Governorship of his state so that he would have a first-hand experience in the political crucibles of this nation and for him to properly play politics in the real practical sense of the word instead of hiding under a business name to do so.

Nigerians are glad that, the  Group Managing Director of the NNPC, Mele Kyari who was the target of the media onslaught against the corporation since the release of the 2020 audit report equally came out on TVC News to clarify that the 2020 profit was very low and a very small number.  In his words: “This is potentially a trillion-naira company and of course with all expectation and all resources available to us, we should not be declaring losses at any time.” 

Impliedly, the 2021 audit will post more profit than the 2020 FAS and the trend will not only continue, but have come to stay to perpetually shame Atade Peterside and his sort.

When we use public space, sometimes, we forget that history lay ambush with a note pad. For the avoidance of doubt, Mele Kyari has been part of the Nigerian Extractive Industries Transparency Initiative (NEITI)  long before he became the GMD of the NNPC and I have personally met him in a number of NEITI meetings where he liberally canvassed the need for transparency and accountability in the nation’s oil and gas industry. It was therefore not surprising when appointed GMD he has given tacit support to implementation and abided by the general principles of the EITI in all his undertakings.

Under his watch, the NNPC joined a group of over 65 extractives companies, state-owned enterprises (SOEs), commodity traders, financial institutions and industry partners committed to observing the EITI’s supporting company expectations.

The NNPC we know before the coming on board of Mele Kyari and his management team operated as an opaque institution. This was pointed by NEITI in the very first forensic audit report which covered  1999-2004.  As a matter of fact, since its inception in 2004, the NEITI has conducted eight independent audits in the oil and gas sector (1999–2004, 2005, 2006-2008, 2009-2011, 2012, 2013, 2014, 2015) and one in the solid minerals sector (2015). All the reports have always been accompanied with recommendations based on findings relating to violations of stipulated laws and regulations on revenue or tax remittances by companies or receipts by government and its agencies.

Regrettably, as a close stakeholder, majority of these recommendations have always been observed in breach by the companies and the various government agencies, as there are no legal authority to NEITI to enforce compliance or issue sanctions for ignoring them.

Concerned about the recurring disregard to the recommendations in the NEITI audit reports, Mele Kyari, one of the earliest supporters of NEITI in the NNPC and his current management team chose to do things differently by working to bring an  end to the era of opacity in the NNPC. Come on, this should be applauded by Nigerians and lovers of democracy anywhere in the world.

To demonstrate his commitment to taking NNPC to a profit-making corporation, Mele Kyari launched the Transparency, Accountability and Performance Excellence (TAPE) programme. The programme ensures elimination of discretions, automation of processes and documents, sustained stakeholders communications, evolvement of a culture of openness and disclosure as well as sharing of knowledge and data with deliberate creation of spaces for feedback and implementation of open contracting processes all geared towards transparency in the NNPC.

In the area of Accountability, TAPE ensures strict adherence to NNPC’s business ethics, policies and procedures, ensure reliability in financial reporting as well as need to ensure the non-betrayal of the trust of over 200million Nigerians.

To ensure performance excellence, the Mele Kyari-led management set clear objectives and targets, capacity building and empowerment of staff and creation of value addition to NNPC bottom line, while making operational effectiveness and efficiency the new mantra of the corporation. This never happened in the history of the NNPC. 

Much more, the Oil  and Gas industry is now governed by  a Petroleum Industry Act (PIA) with couple of sections dedicated to transparency and accountability in line with the current management’s New Way of Working. These are novel and deft moves that the oil industry needed over the years but was deprived by forces of darkness in power that never wished the nation any good.

It was not therefore not any surprise to industry watchers that the NNPC steadily moved from drastic reduction in losses to posting profit in 2020. Our collective prayer is that this streak should endure so that the fortunes of the nation’s oil and gas industry can continue to flourish before the phaseout of the use of fossil fuel in Nigeria.

Mr. Leo Atakpu, a Civil Society activist writes from Benin City, Edo State.

Editor's Note.

The views expressed in this article is that of the author and not that of Newscurve.