NNPC’s Power Generation Plan

Despite the fact that Nigeria is suffering from virtual total blackout as a result of poor electricity supply, the plan by the Nigerian National Petroleum Corporation (NNPC) to embark on power generation activities as part of its business is ludicrous and wrong-headed. It should be trashed immediately.

An organisation that has failed woefully in performing its assigned duties cannot justifiably open another window of corruption in the name of power supply.
Citing ongoing reforms, the Group Managing Director (GMD) of NNPC, Dr. Maikanti Baru, the other day, stated that the organisation was geared towards transforming from an oil and gas company to an integrated energy outfit with interest in power generation and transmission. Maikanti said this during the 53rd International Conference and Exhibition of the Nigerian Mining and Geosciences Society in Abuja.

According to him, the country’s power transmission capacity was inadequate, adding that this was the major reason for the poor supply of electricity. Contrary to popular belief, Baru said there was enough gas to generate 8,000 MW of electricity but the transmission grid could not support such quantum of power without complications.

He said his corporation had identified opportunities in the power sector and was ready to take advantage of such to transform from being a gas supplier to the power sector into a major player in the industry. It was also disclosed that the corporation was already working on a project to generate four megawatts of electricity while also exploring the possibility of investing in the transmission segment of the power sector. The real problem, according to NNPC boss, was insufficient transmission capacity. It is common knowledge that the failure of the NNPC to perform its duties creditably well is the bane of the nation’s economy. NEITI, a watchdog on extractive industry, regularly reports that billions of naira are lost, stolen or unremitted to the Federation Government. The opaqueness in the operations of the NNPC leaves everybody in the dark about its functions.

Truth is that Nigeria would be better off if the NNPC had been as credible as its counterparts in other countries. Probably, the NNPC might be trying to copy what other efficient national oil corporations are doing without first putting its house in order. For instance, Petrobras, Brazil’s multinational oil corporation, ranks 50 in the latest Fortune Global 500 list with 2015 published revenue of US$98.2 billion and is largely at the centre of Brazil’s national development.

The company has generation and trading of electric power as part of its six key business areas. And the huge success recorded by Petrobras over a period of about six decades is indeed overwhelming. This is what NNPC should seek to emulate.

Whereas, Petrobas was created with Brazilian people as major stakeholders, which makes for transparency and accountability, the NNPC operates without the interest of the Nigerian people as its core mandate. Consequently, selfish interests, local and foreign, have taken over the oil operations. How much oil is produced, sold or exported or even stolen is unknown. The secrecy surrounding NNPC’s operations has created a fertile ground for unmitigated graft, which has led the country into huge debts. Since the company cannot meet its basic responsibilities, how would it cope with power generation that is capital intensive?

Rather than waste time and resources chasing what has defied even the best intentions of government, the NNPC should seek to fulfill its core mandate before any other thing. To do otherwise is tantamount to chasing shadows. It is needless to say that the company lacks the needed competence to delve into the complexities of power generation and distribution. Going by the huge corruption that besets the NNPC, the new venture can only be another avenue to fleece the nation. NNPC’s core competence is in oil and gas exploration, production, refining, sales and distribution. It will be foolhardy for the corporation to begin to explore new grounds when it has fallen short on its core mandate.

Perhaps, NNPC should first prove its competence in the management of the country’s oil and gas resources before seeking to diversify into new areas as its counterparts in other parts of the world have appropriately done.

All told, the Federal Government, and indeed representatives of the people in government, should call NNPC to order, in this connection.


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