Atiku’s Threat To Sell Nigeria’s Cash Cow, NNPC And The Angst Of The Cabal
The Oasis Reporters
January 29, 2019
It is expected that when the PDP presidential candidate, Atiku Abubakar passionately swore to sell off the Nigerian National Petroleum Corporation, NNPC, he knew the furore the statement would generate.
Insults and twisted interpretations have trailed that statement since then, the recent being the panic expressed by the All People’s Congress, APC chairman, Adams Oshiomhole at the Party’s presidential rally in Ibadan, South West Nigeria, urging the people not to vote for the PDP because of that threat from Atiku.
Before delving into this post proper, permit me to share an abridged version of a little story sent to me via WhatsApp.
It is the story of a poor family that owned one cow. Each morning, they’d milk the cow. Drink some and sell the rest in the village market to buy some groceries.
Until a wise guru passing through the village became a guest of the family. On leaving the poor family, he asked his disciples to push the thin cow down the slope. The cow died.
A year later, the disciple of the guru (out of guilt) walked by that same village to check on the poor family. What he saw was opulence, swimming pool, golf course and all other accoutrements of opulence. Fearfully and with trepidation, he made enquiries of the poor family that lived where this rich family was occupying.
What happened?
The death of the cash cow opened their eyes to the opportunities around them, and they prospered exceedingly. In other words, if the cow hadn’t been pushed to death, the family would still have been reliant on that tiny cash cow under wretched conditions.
That is the story of Nigeria’s NNPC, the cash cow that is the life blood of the ruling oligarchy since crude oil was discovered at Oloibiri, Bayelsa State.
In a article, titled,
“ATIKU’S VISIT TO THE USA: SOUNDS LIKE VISA FOR NNPC” by Katsina born Maiwada Dammallam, he wrote:
“It’s bad enough for Atiku to spend lots of money to hire lobbyists to arrange for a safe visit to United States, it’s worse when he and his minions go gaga, invading every inch of the internet celebrating the “feat” with more happiness, vigor and sense of fulfillment than that of a kid inspecting his first bicycle and, without recourse to public sensibility.
“Well, listen to my worries about Atiku’s hurried visit to the USA… would meet with the business community in Lagos, unveil his terrifying plans “to get Nigeria working” which includes selling Nigeria’s cash cow, the NNPC if elected”,
“ Unscrupulous USA businessmen could easily arrange a visit for Atiku Abubakar if he could convince them of his willingness to handover the NNPC to them and, what better prove {sic} do they need more than bringing Nigeria’s Senate President to the table”
The main theme of his write up is centered on the anger that Atiku Abubakar has threatened to sell NNPC, the cash cow indeed!
For who, beyond a few families and friends really benefit from this cash cow?
What really is this cash cow about ?
According to the SA Stock Market news writing on the Petroleum industry in Nigeria – Wikipedia
https://en.m.wikipedia.org › wiki ›, it says:
“According to the International Energy Agency, Nigeria produced about 2.53 million barrels (402,000 m3) per day, well below its oil production capacity of over 3 million barrels (480,000 m3) per day, in 2011. Nigeria is an important oil supplier to the United States”. Or rather, was. That’s all you get.
The business of the NNPC seems to be, get the Crude-oil, sell it abroad in the oil spot market, then use a huge part of the income to purchase Petroleum products from foreign countries who have no Crude-oil, maybe, and import it to Nigeria.
Nigeria lacks the capacity to refine it’s own crude oil and consequently, thousands of engineering graduates from Nigeria’s universities and polytechnics (which include three of my father’s grandchildren who graduated in the last two years, can’t get employment in the NNPC), even though the Warri Refinery is in my backyard as a Niger Deltan.
To compound our woes, out of the balance of payments from the Crude-oil sales after paying for Petroleum products, the NNPC takes out a hefty sum of One trillion Naira and more, in subsidizing the well connected importers of the finished products.
For the loss of the over one trillion Naira, hospitals remain decrepit, the universities remain shut and roads remain death traps while the rich and powerful send themselves and children abroad for extended medical tourism, education and shopping, all from the cash cow NNPC till.
But when Niger Delta youths show dexterity in cheaply refining clean Petroleum products because they can’t get jobs elsewhere, the military shoots at them. And the nation would not refine the Crude-oil here to save the one trillion Naira subsidy payments and put our youths to work.
In other words, Nigeria subsidizes Asian and American Petroleum refining engineers, while our own engineers remain redundant at home.
So what really is the usefulness of the NNPC to the poor people of Nigeria?
In the course of the research towards this write up, I looked up at a contemporary of the NNPC in Brazil called Petrobas.
Read on:
“Petrobras’ market value soared as investors see favorable electoral results ahead, passing Vale to reclaim its position as top Brazilian company in terms of market value (US$93 bn).
Petrobras financials (solid cash generation and improving debt profile) coupled with tailwinds (oil prices up as global commodities recover) is encouraging.
Petrobras (PBR) retaking the lead in terms of market value among Brazilian companies (US$93 bn as of October 8), ahead of global iron ore exporter Vale (VALE), is symbolic for a revival of sorts for the state-owned company and could be indicative of an overall recovery of Brazil’s stock market. With improved corporate governance based on the notion that there will be less political meddling in corporate affairs, investors can shift focus to matters such as key market developments, oil prices and company fundamentals”
Then I tried to find out what the market value of our own NNPC was. It was as secretive as darkness. Nothing! No known value! The least Maikanti Baru, the NNPC Group Managing Director could gloat about is that under him, gas supplies to Nigeria’s power plants has risen to an all time high, providing 5,222 MW electric power to Nigeria. A figure that only New York City, consumes per day !
What I saw in Punch Newspapers of January 7, 2018 is that NNPC has posted a group operating loss of N68.84bn in 10 months,(between January and October 2017).
According to the latest oil and gas report from the firm, the corporation made a group revenue of N3.05tn and an expense of N3.119tn during the period under review.
Two subsidiaries of the NNPC, Pipelines and Product Marketing Company and Nigerian Pipelines Storage Company recorded the highest losses in the group, a development that eroded the profits made by other subsidiaries of the group in the corporation’s overall financial account.
Two of the country’s refineries, Kaduna Refining and Petrochemical Company and Warri Refining and Petrochemical Company, recorded deficits of N24.3bn and N14.95bn, respectively during the period under review.
The Port Harcourt Refining Company, on the other hand, posted a surplus of N28.65bn during the 10-month period.
The NNPC’s latest report, however, showed that the corporation’s trading deficit dropped significantly in October 2017 when compared to the value recorded in the preceding month.
It said the corporation “recorded a trading deficit of N0.41bn (in October 2017) which is significantly lower than the previous month’s deficit of N2.81bn. This represents 85 per cent or N2.4bn improvement compared to the last month’s performance.”
The report stated that the daily average natural gas supply to gas power plants amounted to 716.28mmscfd or equivalent to power generation of 2,885 megawatts, which was 17.04 per cent higher than what was supplied in September 2017 and 18 per cent higher than the corresponding supply recorded in October 2016.
Imagine the dismal power production figures for a country of 180 million people, when South Africa with a population of less than 50 million produces 50,000 MW electricity.
Obviously Atiku Abubakar has to be courageous enough, if he wins to sell the NNPC on the stock exchange so as unleash that hopelessly stagnant oil sector for Nigeria to grow. He should not tinker around the edges, radical change in an outright sale is needed. Moving the moribund NNPC to the private sector would bring competition, remove cronyism, nepotism and corruption. Our engineers would then be better engaged instead of losing them to the vagaries of European and American countries as economic refugees.
Especially now that it may attract a fair price because the world is gradually moving away from fossil fuels into greener energy.
Sell it, Atiku. Please do. I wish you utmost luck.
Written by Greg Abolo.
