Tunde Chris Odediran
Nigeria’s once-proud national oil company, the Nigerian National Petroleum Company Limited (NNPCL), has become a liability to the nation it was meant to serve.
This transformation from a gem of national pride to a burden on the economy serves as a stark reminder of the corrosive effects of mismanagement and corruption.
There was a time when the NNPCL, then known simply as NNPC, was synonymous with wealth and prestige.
Established in 1977 through the merger of the Nigerian National Oil Corporation and the Federal Ministry of Petroleum and Energy Resources, it was tasked with managing joint ventures between the Nigerian government and multinational oil corporations such as Shell, Chevron, Total Energies, ExxonMobil, and Agip.
For years, the NNPC was the lifeblood of the nation, producing the cash that fueled ambitious government programs.
It accounted for a staggering 76% of federal revenue, making it the backbone of Nigeria’s economy.
The corporation’s influence extended beyond mere numbers; it became a symbol of national prosperity, creating numerous subsidiaries including refineries in Warri, Port Harcourt, and Kaduna.
However, beneath the veneer of success, the seeds of its downfall were already taking root.
The NNPC became known as a place where employment guaranteed affluence, producing billionaire and millionaire civil servants through dubious means.
Former Vice President Abubakar Atiku didn’t mince words when he described the organisation as a “cesspool of corruption.”
Even former President Olusegun Obasanjo referred to it as a “rotten entity,” pointing to how it ran the nation’s refineries aground.
In an attempt to address these issues, the NNPC was transformed into a limited liability company, rebranding as NNPCL. This move, however, proved to be little more than a cosmetic change.
The new name, ending with the letter “L,” has ironically become synonymous with limitations and liability – in vision, ability, capability, profitability and relevance.
The transition to a private company, ostensibly operated on behalf of Nigerians, failed to address the root causes of the organisation’s problems.
The current administration under President Tinubu struggles to completely eliminate fuel subsidies and allow the naira to float at market prices, largely due to the economic instability forced upon the country by NNPCL’s actions
With leadership remaining largely unchanged, the NNPCL continued down its path of mismanagement and corruption.
Today, the NNPCL stands as a prime example of how corruption can eat away at even the most profitable ventures.
Oil companies rarely struggle financially due to the nature of their business.
Yet, the NNPCL has managed to become indebted, disruptive to the nation’s economy, and increasingly irrelevant to the people it was meant to serve.
Recent reports paint a grim picture of the company’s financial state.
The NNPCL reportedly owes $6.25 billion to foreign oil companies and has been negotiating deals to collect money for oil yet to be produced, further burying Nigeria in debt.
In a desperate move, it has pledged 272,500 barrels of crude oil per day through a series of crude-for-loan deals totaling $8.86 billion – essentially mortgaging the country’s future oil production.
The impact of these decisions extends far beyond the company itself.
The current administration under President Tinubu struggles to completely eliminate fuel subsidies and allow the naira to float at market prices, largely due to the economic instability forced upon the country by NNPCL’s actions.
The failings of the NNPCL become even more disheartening when compared to its counterparts in other countries.
Brazil’s Petrobras, for instance, reported a net income of $24.88 billion in 2023. Saudi Arabia’s Aramco, the fourth-largest company in the world by revenue, posted profits of $61.9 billion in 2023.
From 2016 through 2023, Aramco accumulated an astonishing $722 billion in profits, more than any other company in the world over that span.
These success stories stand in sharp contrast to the NNPCL’s struggles, highlighting the devastating impact of corruption and mismanagement on what should be a highly profitable enterprise.
The time has come for Nigeria to confront the harsh reality: the NNPCL, in its current form, is no longer serving the interests of the people. Instead, it has become a national disaster that requires immediate attention.
The company’s actions continue to have far-reaching consequences for everyday Nigerians.
Most of the country’s income is spent on importing oil, a situation that makes stabilizing the naira an increasingly distant dream.
The NNPCL’s incompetence has, in effect, sold the future of Nigerians.
Even attempts to address these issues have backfired.
Last year, the NNPC announced a $3.3 billion emergency crude oil repayment loan from the African Export-Import Bank, ostensibly to support the stabilisation of the exchange rate.
However, this move has achieved precisely the opposite effect.
Nigeria finds itself in a race against time.
The global shift away from fossil fuels due to climate concerns means that the window for capitalising on oil resources is rapidly closing.
Yet, at this critical juncture, the very organization tasked with managing these resources has become the biggest obstacle to progress.
The NNPCL’s continued existence in its current form threatens not just the economic stability of Nigeria but also its future prospects in a rapidly changing global energy landscape.
The company has shown itself incapable of adapting to change, instead clinging to corruption and engaging in short-sighted financial maneuvers.
The conclusion is inescapable: the NNPCL, as it stands today, must be euthanized.
This is not a call made lightly, but one born out of necessity.
The organisation has proven time and again that it is incapable of reform.
It is rotten to the core.
The government should not even consider an overhaul of the oil corporation.
Trying to break up the NNPCL into smaller, more manageable entities, will hardly produce transparency, accountability, and efficiency. Its officials live in a culture of inefficiency and selfishness.
That is all they know.
Vested interests will undoubtedly resist any attempt to dismantle the status quo.
However, the cost of inaction is far greater.
Every day that the NNPCL continues to operate in its current form is another day that Nigeria’s economic potential is squandered.
As Nigeria stands at this crossroads, the choice is clear.
Nigeria should eliminate the NNPC and allow the oil sector to be completely private as it is in many countries, focusing more on collecting huge taxes on the profits made by operators in the sector.
The time has come to bid farewell to the NNPCL and embrace a new era of responsible resource management.
Only then can Nigeria hope to harness its vast oil wealth for the benefit of all its citizens, not just a privileged few.
Euthanizing the NNPCL will restore Nigeria’s economic sovereignty and secure a brighter future for generations to come.
The nation cannot settle for cosmetic measures any longer.
