Nigerian National Petroleum Corporation
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| Type | public |
|---|---|
| Industry | Oil and gas |
| Founded | 1977 |
| Headquarters | Abuja, Nigeria |
| Key people | Diezani Alison-Madueke, (Chairperson) A. O. Oniwon, (Group Managing Director NNPC) |
| Products | Petroleum & Petrochemicals |
| Website | www.nnpcgroup.com |
The Nigerian National Petroleum Corporation (NNPC) is the state oil corporation through which the federal government of Nigeria regulates and participates in the country's petroleum industry.
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[edit] History
NNPC was established on April 1, 1977 as a merger of the Nigerian National Oil Corporation and the Federal Ministry of Mines and Steel. NNPC by law manages the joint venture between the Nigerian federal government and a number of foreign multinational corporations, which include Royal Dutch Shell, Agip, ExxonMobil, Chevron, and Texaco (though now merged with Chevron). Through collaboration with these companies, the Nigerian government conducts petroleum exploration and production. The head of the Nigerian wing of Transparency International says salaries for workers are too low to prevent graft.[1]
As of September 2007, Nigerian President Umaru Yar'Adua plans to split the company into five new companies.[1]
The NNPC Towers in Abuja is the Headquarters of NNPC. It is made up of four identical towers. It is located on Herbert Macaulay Way, Central Business District Abuja. NNPC also has zonal offices in Lagos, Kaduna, Port Harcourt and Warri. There is also an International office located in London, United Kingdom
In May 2009, the NNPC indicated that the Niger delta unrest, had no impact on its business despite fights between government forces and rebels in this oil producing area. [2]
[edit] Installations
NNPC has sole responsibility for upstream and downstream developments, and is also charged with regulating and supervising the oil industry on behalf of the Nigerian Government. In 1988, the corporation was commercialised into 11 strategic business units, covering the entire spectrum of oil industry operations: exploration and production, gas development, refining, distribution, petrochemicals, engineering, and commercial investments. The subsidiary companies include:
- National Petroleum Investment Management Services (NAPIMS)
- Nigerian Petroleum Development Company (NPDC)
- The Nigerian Gas Company (NGC)
- The Products and Pipelines Marketing Company (PPMC)
- Integrated Data Services Limited (IDSL)
- Nigerian LNG limited (NLNG) in joint venture
- National Engineering and Technical Company Limited (NETCO)
- Hydrocarbon Services Nigeria Limited (HYSON)
- Warri Refinery and Petrochemical Co. Limited (WRFC)
- Kaduna Refinery and Petrochemical Co. Limited (KRPC)
- Port Harcourt Refining Co. Limited (PDRS)
[edit] Legal premise
According to the Nigerian constitution, all minerals, gas, and oil the country possesses are legally the property of the Nigerian federal government. As such, the oil corporations operating in Nigeria appropriate portions of their revenue to the government, which accrues nearly 60% of the revenue generated by the oil industry in this manner. The revenue gained by the NNPC accounts for 76% of federal government revenue[1] and 40% of the entire country's GDP. As of 2000, oil and gas exports account for 98% of Nigerian export earnings.[citation needed]
[edit] Corruption at the NNPC
[edit] KPMG Report
In December 2011, the Nigerian government permitted a forensic report conducted by KPMG to be published. The audit, commissioned by the Ministry of Finance following concerns over the NNPC’s transparency, detailed the NNPC’s sharp business practices, violation of regulations, illegal deductions of funds belonging to the state, and failure to account for several billions of naira that should go to the federation account.[3]
Auditors found that between 2007 and 2009 alone, the NNPC over-deducted funds in subsidy claims to the tune of N28.5 billion. It has not been able to account for the sum ever since.[4]
[edit] Willbros Group Inc
In May 2008, Willbros Group Inc, a US company, admitted to making corrupt payments totalling over $6.3 million to officials at the NNPC and its subsidiary NAPIMS, in return for assistance in obtaining and retaining contracts for work on the Eastern Gas Gathering System (EGGS).[5]
[edit] ABB Vetco Gray
In July 2004, ABB Vetco Gray, a US company, and its UK subsidiary ABB Vetco Gray UK Ltd, admitted to paying over $1 million in bribes to officials at NNPC subsidiary NAPIMS in exchange for obtaining confidential bid information and favourable recommendations from Nigerian government agencies.[6]
[edit] References
- ^ a b c "Reforming the oil industry". The Economist (The Economist Newspaper Limited). 2007-09-29.
- ^ NNPC sees no major output impact from delta unrest, Reuters, May 20th, 2009
- ^ Musikilu Mojeed (9 December 2011). "Monumental Oil Subsidy Fraud And Corruption At The NNPC-The Damning KPMG Report :Premium Times". Sahara Reporters. http://saharareporters.com/news-page/monumental-oil-subsidy-fraud-and-corruption-nnpc-damning-kpmg-report-premium-times?page=1.
- ^ ENERGY AND NATURAL RESOURCES (22 November 2010). "Current State Assessment Report on the Process and Forensic Review of the Nigerian National Petroleum Corporation (Project Anchor)". Federal Ministry of Finance. http://documents.scribd.com.s3.amazonaws.com/docs/2706x6ork01aljsu.pdf?t=1323453232.
- ^ Department of Justice (14 May 2008). [http://www.justice.gov/opa/pr/2008/May/08-crm-417.html "Willbros Group Inc. Enters Deferred Prosecution Agreement and Agrees to Pay $22 Million Penalty for FCPA Violations"]. Department of Justice. http://www.justice.gov/opa/pr/2008/May/08-crm-417.html.
- ^ Department of Justice (6 July 2004). "ABB VETCO GRAY, INC. AND ABB VETCO GRAY UK LTD. PLEAD GUILTY TO FOREIGN BRIBERY CHARGES". Department of Justice. http://www.justice.gov/opa/pr/2004/July/04_crm_465.htm.
