‘80% Of Newly Constituted NNPC Board lack expertise’
…Laments excessive turnover of GMDs, employees
The newly constituted Nigerian National Petroleum Corporation (NNPC) Board lacks the required expertise to drive commercial efficiency within the national oil company, a policy expert has alleged.
Speaking during a webinar Masterclass organised by the Nigeria Natural Resource Charter (NNRC) on ‘Assessing the Role of State Owned Enterprises: NNPC in Nigeria’s Development held yesterday, the Principal Partner, Primus Partners and Solicitors, Mr Najim Animashaun, hinted that 80 per cent of newly constituted board members of the Nigerian National Petroleum Corporation (NNPC), lacks actual experience within the petroleum trade to drive progress and cost-cutting initiatives within the company.
According to Animashaun, NNPC doesn’t have an empowered, skilled and impartial Board, stressing that the present make up permits for political interference.
The policy expert noted that NNPC’s company governance would possibly enhance if board members have been largely impartial and chosen based mostly on technical capability and competence.
He stated, “The present Board has two politicians with no actual petroleum sector experience, whereas solely two individuals within the Board have greater than 10 years’ expertise within the oil and fuel sector. Eighty per cent of board members don’t have any actual experience within the petroleum sector.
“Provisions for constituting the NNPC Board are stipulated within the NNPC Act, which offers for the Minister of Petroleum Resources to behave as Chairman of the board. It additionally offers for a consultant of the Ministry of Finance, however leaves little room for government administrators, with solely the Group Managing Director (GMD) of the NNPC represented on the Board.
“While the Act allows for private sector participation, there is no representation of private actors on the current NNPC Board. Consequently, the set-up by design and practice make for a heavily government-oriented board, also reflecting the ownership structure. Little wonder the set-up described above freely allows for political interference,” Animashaun said.
Speaking further, Animashaun decried the high rate of GMDs and employees turnover in the national oil company. He said that NNPC has had 20 GMDs, with a median tenure of two years, in comparison with Saudi Aramco, whose chief government officers have a median tenure of 9 years, and Petronas, a median tenure of seven years.
Adding that recruitment into the NNPC is topic to patronage, socio-ethnic and spiritual concerns in addition to Federal Character that impedes aggressive staffing, including that it’s unclear how the NNPC’s technique of investments in employees anti-fraud interprets into employees integrity.
According to him, of their research of the NNPC, it was found that the company doesn’t have a transparent management and succession planning, whereas there may be the absence of profession growth additionally.;
He stated, “The situation of employees integrity will not be compliance studying or guidelines. It is within the company tradition and the sense of worth and being valued by employees. High administration turnover means employees sees administration as political appointees and never company leaders whose imaginative and prescient they buy-into and are desperate to implement.
Animashaun added that among the many 5 nationwide oil firms reviewed, solely the NNPC doesn’t have routine audits and publish its accounts, whereas he emphasised the necessity for NNPC to be commercially pushed.
Continuing, the policy expert accused NNPC lacking in openness, adding that the national corporation’s system is partly accountable for the poor record-keeping, the shortage of checks and balances, ineffective efficiency evaluations and audits, and the absence of transparency and accountability within the NNPC.
He stated, “Petrobras with decrease reserves than the NNPC, generates extra revenues and 26 occasions extra income than the NNPC. Even whereas it was topic to the largest corruption investigation in its historical past and paying fines or making provisions in extra of US$10 billion on its steadiness sheet and nonetheless make revenue.
“Failure of governance and failure of accountability and transparency impacted Petrobras’ management and operational efficiency, however, because it is commercially driven it has been able to sustain its business model. Commercial efficiency is key to the health and sustainability of a national oil company (NOC).
“Remove NNPC’s statutory discretion to engage in all commercial activities in the petroleum industry; focus on developing NNPC’s strengths and provide strategic policy direction for NOC to have an energy transition plan,” he said.