Battle for Control of NNPCL Begins

Five months after the dramatic transfer of power from the Northern part of the country to the South, contending forces in Nigeria’s powerful geo-political zones are presently locked in a fierce battle for the control of the nation’s oil company, the Nigerian National Petroleum Corporation Limited (NNPCL) and its prized assets.

Aggrieved stakeholders in the petroleum sector had last week accused the management of NNPCL of stealthily awarding rehabilitation contracts of the nation’s dilapidated pipelines to four Northern oil companies, including two downstream retailers.

In the widely circulated report, industry players had called out the NNPCL GMD, Mele Kyari, for allegedly awarding the most lucrative portions of pipelines rehabilitation contracts to MRS Oil Nigeria Plc and A.A.Rano Nigeria Limited, owned by two northerners, Auwalu Rano and Sayyu Dantata, respectively.

According to the aggrieved stakeholders, the lopsided sharing of contracts by Kyari confirmed their fears that the powerful Northern cabal that held sway during the administration of former President Muhammadu Buhari and cornered the nation’s oil assets, is still in charge under the new administration.

A leaked document on how the pipelines contracts were shared indicated that four companies, Oilserv Limited; A.A RANO Nigeria Limited; Macready Oil and Gas Service Company Limited and MRS Oil Nigeria Plc were all awarded the lucrative contracts of rebuilding, operating and maintaining the country’s pipelines to, on one hand, help transport crude oil from crude oil terminals to refineries, while on the other hand, transport their refined products back to fuel depots.

However, the leaked memo suggests that A.A.Rano Nigeria Limited and MRS Oil Nigeria Plc were awarded the two most coveted slots, LOT 3 and LOT 4.

For instance, while A.A.Rano secured the juiciest slot, LOT 3, comprising Mosimi–Ore Products Pipeline (151.3km), Ibadan Depot, Ilorin Depot, Ibadan-Ilorin Products Pipeline (168.9km), Atlas Cove–Mosimi/Satellite Products Pipeline (72.8km), Mosimi Depot, Mosimi–Ibadan Products Pipeline (79.1km), Atlas Cove Depot and Satellite Depot, which oversees depots in the South-West and some parts of North Central like Kwara, Kogi and Niger, MRS Oil, on the other hand, won the bid for the second most lucrative slot, LOT 4, comprising the Escravos–Warri Crude Oil Pipeline (60km), Warri-Benin Products Pipeline (90km), Benin-Ore Products Pipeline (110km), Warri Depot, Benin Depot and Ore Depot, which gives retails outlet control of the South-South region and some parts of the South West like Ondo and Ekiti, as well as Anambra in the South East.

Meanwhile, the contract for LOT 1, which comprises the Bonny-Port Harcourt Crude Oil pipeline (54.8km), Port Harcourt-Aba–Enugu Products Pipeline (210km), Port Harcourt depot, Aba Depot and Enugu Depot, Port Harcourt Refinery–Bonny Export Terminal Products Pipeline (35km), Bonny Export Terminal–Loading Jetty Products Pipeline (32km) and Bonny Export Terminal facilities was given to Oilserv Limited owned by billionaire oil magnate, Engr. Emeka Okwuosa.

Lastly, Macready Oil & Gas Service Company Limited, owned by billionaire, Mr. Olu Fagbemi, emerged the preferred bidder for LOT 3, which comprises Warri-Kaduna Crude Oil Pipeline (604km), Kaduna-Kano Products Pipeline (224.3km), Kaduna-Jos Products Pipeline (166.4km), Kaduna-Suleja Products Pipeline (170.8km), Kaduna Depot, Kano Depot, Jos Depot and Suleja Depot.

“What is going on is simply repositioning. The North knew that it is no longer in power and may soon lose the control of the NNPCL to the South, especially the Yoruba. That’s why they are trying to get what they can get now.

“One, apart from their trading and prowess, most northerners are still far behind their southern counterparts in the science and engineering fields. That is why they want to secure the retail end of the business by rigging the system in their favour.

“For instance, MRS OIL and A.A.RANO are the biggest fuel retailers in the North. Since the North is no longer in power at the centre, which other way can it secure its economic future if not by controlling fuel distribution in the country.

“Or how else will they explain given out the control of the pipelines supplying fuel to the biggest markets in the South West and South South to two Northern companies?

“Without doubt, the move is aimed at cementing the position of the North in the downstream oil sector by giving them the unmerited ability to decide the fate of Nigerians, especially in the event of a supply crisis or shortage, choosing to serve themselves first, fix the market price, handpick their favourite retail outlets to dispense fuel and shun those not in their good graces.

“To make it worse, RANO and MRS are also retailers, who are now going to decide what gets to their fellow competitors from the South. I think this is too much power for the two unqualified retailers to wield over the nation”, argued Engr. Segun Egbedore, the chairman of an oil servicing firm based in Port Harcourt.

Also speaking, the CEO of Cavazanni Human Capital Limited, Kelvin Atafiri, said NNPCL’s awarding LOT 3 and 4 to to MRS and RANO Oil, is tantamount to handing the retailers control of the pipelines at the risk of exploiting other retailers from the other parts of the country.

“LOT 3 is a fairly well-developed market with NNPC already incurring the capital cost for infrastructure before transferring to the preferred winner. From a competitive point of view, it gives the winner an advantage compared to others.

“MRS Oil, without any doubt, will be in a position to exert a massive influence in the South-West region, where it can decide not to serve competitors with fuel and fix a price buyers will pay through the nose to purchase”, Atafiri argued.

Some concerned stakeholders, who spoke on the alleged manipulation of the pipelines contracts award process, especially the hushed manner in which it was done, lamented that the NNPC GMD had always favoured businesses from the North against others.

“Kyari has always given RANO and MRS preferential treatments since he assumed office. If you can recall, the two firms were both selected for the now suspended crude-for-fuel swap contracts in 2021

“Before the pipelines contracts deal to MRS and RANO deal became public knowledge, the NNPCL had kept a tight lip.

“Meanwhile, it found it more convenient to broadcast the award of a pipeline protection contract to Government Ekpemupolo (Tompolo) at the sum of N48 billion annually. How convenient!”, one of the visibly angry stakeholders told our correspondent.

President Bola Tinubu, it was gathered, was aware of the hushed contracts cornered by MRS Oil and A.A. Rano and efforts to undermine oil and gas businesses owned by southerners, but advised those that went to him to complain to calm down, saying the time had not yet come to fight.

Sources in the petroleum sector informed our correspondent that the lopsided pipelines rehabilitation contracts, as well as other decisions were done by some Northern elements in government to address the South’s perceived dominance of the upstream, midstream and downstream oil sector.

The war for the control of NNPC, it was learnt, didn’t start today, but a long time ago after a cabal in the government of former President Muhammadu Buhari found out the hard way they couldn’t stop the aspiration of Tinubu to become president.

“Tinubu had betrayed his position as a free market advocate while speaking at many public forums by promising to scale down on government’s participation in business.

“Troubled by this, they made several unsuccessful efforts to stop him. But since they couldn’t stop him, they made great efforts at cementing the status quo in the nation’s petroleum sector so that it will be difficult for Tinubu or any southern president for that matter to do away with it.

One of the moves made by the Northern hawks in power, was to stop the $1.6billion purchase of ExxonMobil oil assets to Seplat in May 2022.

ExxonMobil and Seplat Energy had jointly announced the $1.6billion sales agreement deal that would see Seplat purchase ExxonMobil’s complete shares in the state-owned oil firm.

However, the NNPC stalled the deal when it made a major counter-offer to ExxonMobil, insisting that it had the first right of refusal to buy the shares.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), in letter dated May 16, 2022, to ExxonMobil, said the SEPLAT-EXXONMOBIL deal is dead on arrival as the NNPC had decided to exercise its right of pre-emption first refusal on the assets.

The NNPC, it was gathered, later made a counter offer of an amount in the region of $2billion against the $1.6billion offered to ExxonMobil by Seplat.

The controversy has practically stalled the transfer of ExxonMobil’s assets in the Joint Venture (JV) project to Seplat.

A similar scenario played out in September 2023 after Oando Plc announced that it had reached an agreement with Eni to acquire 100 percent stake of its stake in its Nigerian subsidiary, Agip Oil Company Limited (NAOC Ltd).

The oil firm said the transaction will bolster its ownership stake in all NNPC Exploration and Production Limited (NEPL)/NAOC/OOL joint venture assets and infrastructure.

However, the euphoria the announcement generated has hardly subsided, when the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) threatened to withdraw its members from all offices and oil fields over the purchase, calling for it to be halted.

According to the union, over 3,000 indigenous workers might lose their jobs.

BH, however, learnt that the PENGASSAN leadership was instigated by forces opposed to the sale, especially by a group from the North in the NNPC threatened by the steady and alarming loss of money spinning ventures that used to be in their kitty’.

“A subtle war is raging in the country for the control of the NNPCL. The entity is perhaps the only big government agency left to have a new leadership.

“Without doubt, Mele Kyari and his team are a toast and already on their way out. They know this and are working day and night to foster their interests, or let me say Northern hegemony on the country before leaving.

“Part of the plan is to cede government properties like pipelines maintenance to Northern interests, employing strict and cumbersome legal terms, which the nation cannot easily wriggle out without paying hefty fin in arbitration fees and awards as breach of contract.

“But Tinubu has proven to be smarter than a fox. He is busy undoing what past leaders had foisted on the rest of the country without much fuss. The North is in a conundrum”, said a player in the nation’s oil and gas sector who begged not to be named

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

To Top