Current composition of newly constituted Nigerian National Petroleum Corporation (NNPC) Board has been accused of lacking the required expertise to drive commercial efficiency.
The disclosure was made by a policy expert, Mr. Najim Animashaun, during a webinar Masterclass organised by the Nigeria Natural Resource Charter (NNRC) on ‘Assessing the Role ofState Owned Enterprises: NNPC in Nigeria’s Development held yesterday.
Members of the new board are: Mohammed Lawal (North West), Tajudeen Umar (North East), Adamu Mahmood Attah (North Central), Senator Magnus Abe (South South), Dr Stephen Dike (South East), and Chief Pius Akinyelure (South West).
President Muhammadu Buhari, had on May 30, 2020 approved the reconstitution of the board of the NNPC, following the expiration of the term of the board members appointed in 2016.
This was even as it raised the alarm over the N131.64 billion refinery loss in 2018 with Port Harcourt refinery topping with N57.18 billion Warri; N41.01bn and Kaduna; N33.44 billion.
Animashaun lamented that NNPC’s audited report required by the NNPC Act was readily not available to the public like its monthly financial and operations report. The NNRC is a public policy institute that promotes effective management of Nigeria’s natural resources for the public good.
In faulting the composition of the Corporation’s Board, the speaker said its membership was not in tune with what obtains in other national oil companies where board membership was driven by technical and managerial expertise.
The policy expert posited that it was expected some of the country’s best accountants to be on the NNPC board so that their books could be looked at and advice proffered in the area of cost analysis and plugging of leakages, a forward looking union member that could advice when it comes to layoffs so that the best hands are retained should the Corporation decide to transit into a new entity as captured in the Petroleum Industry Bill (PIB).
‘‘Why I was criticising the current board is because they are not competent people in their rights but because the competencies required managing cost appears to be missing. They may have skills set they are bringing to the board, but the skills that are actually needed for this occasion appear to be missing.
The mandate is to cut cost. How do we cut cost so that we could be competitive? So if we are to cut cost to be competitive, then we need to bring in people and experts in that field on the board even though they may not be petroleum experts
He said the composition of the NNPC Board was on political consideration as against having people that are vast in the area of cost management, and other related field that would have positive influence on the Board by offering useful advice that would move it forward.
‘‘Nigerians should not get scared about the board because it won’t make any difference from the boards that have been in place before. If we are looking for a transformative board, then we should go the way of other NOCs.
For instance, Petronas which is a wholly owned government company has one of the best ways of constituting its board. It appoints its GMDs within the organisation while the board is a combination of a lot of people with experience in the sector or other related or allied field. They may pick people from KPMG, Deloitte or PwC to be on the board.
Another example is the Saudi Aramco board. Saudi Aramco had to bring in the former head of Schulmberger into the board. Why did they do that? They did that because they do a lot of projects in fracking and Schulumberger is an industry leader in fracking.