---

---

Daily Independent (Lagos)

Nigeria: Presidency to Scrap NNPC

Adeola Yusuf

15 October 2008

---

Lagos — Nigerian National Petroleum Corporation (NNPC) would be abolished by end of October 2008, the Presidency said on Tuesday.

The Federal Executive Council (FEC)has already approved the reform and the Special Adviser to the President on Petroleum Matters, Emmanuel Egbogah, who dropped this hint in Lagos, disclosed that the Presidency was waiting for the Senate to pass the Oil Industry Bill before it.

Fielding questions from newsmen at the 2008 annual pre-conference of the Nigeria Association of Petroleum Explorationists (NAPE), Egbogah said that talks were on between the Senate and the Presidency to ensure that, "the bill is passed within two weeks".

Abolishing the NNPC, according to the Special Adviser, was "a part of the bill because an act establishing NNPC must be repealed before a new one can take effect".

"Now that FEC has approved the reform, what is being awaited is for the Senate to give assent to it, and meanwhile, the President is waiting to have a proper discussion with the Senate so as to accelerate the process of approving the new Oil Industry Bill."

Saying that the Ministry of Justice and office of the Attorney General were involved in the whole work, Egbogah added, "Everything is ready, it is just to go through the normal process of giving it the Senate's assent."

The Presidential aide on Petroleum Matters had earlier said that the Presidency was not looking back on its resolve to explore the nation's enormous gas reserves, which he said a recent study by the United States Geological Survey (USGS)estimated to be "as high as 600 trillion cubic feet".

Presenting a paper entitled "Gas and the Nigerian Energy Industry", Egbogah said: "Beyond the resource potential, Nigeria also has a significant gas market potential. The export LNG market has seen tremendous growth lately."

The NNPC's account was not audited for over six years between 1999 and 2005.

Former President Olusegun Obasanjo, as Minister of Petroleum, failed to audit the NNPC account between 1999 and 2005.

When the Hart Group, a London-based auditing firm, audited the accounts in 2006, it found discrepancies in the books.

The former President rejected the report, while the EFCC promised to investigate the discrepancies, but this was never done.

The corporation accounts for 75 per cent or more of revenue accruing to the Federation Account.

Obasanjo signed Decree 33, the statute establishing the NNPC on April 21, 1977, as Head of State.

It provides in Section 6, Sub-Section 1 that, "The Corporation shall keep proper accounts and proper records in relation thereto in a form which shall conform to the best commercial standards."

Sub-section 2 stipulates that, "The Corporation shall ... after the end of the financial year to which the accounts relate cause its accounts to be audited by auditors appointed by the Corporation with the approval of the Federal Executive Council."

Granted that the decree set no deadline, but it certainly did not provide that the accounts should not be audited for years.

Under Sub-section 3, "The auditors shall, on completion of the audit of the accounts of the Corporation for each financial year, prepare and submit to the Corporation reports setting out:

(a)general observations and recommendations of the auditors on the financial affairs of the Corporation for the year and on any important matters the auditors desire to bring to the notice of the Corporation and, (b)detailed observations and recommendations of the auditors on all aspects of the operations of the Corporation for that year."

Read comments. Write your own.

---