Thursday, July 18, 2024

NNPC GMD quietly awards control of Nigeria’s pipelines to Northern oil ‘cabal’

Industry professionals criticised the contract award, asserting it was too much power for any retail business to wield over the nation.

• October 6, 2023
Mele Kyari, A.A. Rano, MRS Oil
Mele Kyari, A.A. Rano and MRS Oil

Mele Kyari, Managing Director of the Nigerian National Petroleum Corporation (NNPC) Limited, has stealthily awarded juicy rehabilitation contracts of the nation’s pipelines to four oil companies that include two downstream retailers, a move that is tantamount to handing the retailers control of the pipelines at the risk of exploiting other retail outlets and Nigerians at large.

Oilserv Limited, A.A RANO Nigeria Limited, Macready Oil & Gas Service Company Limited, and MRS Oil Nigeria Plc were the four companies awarded the lucrative contracts of maintaining the country’s pipelines to fast track the flow of crude oil to refineries and transport its byproducts back to the country.

Speculations are rife that the Northern cabal is still in charge of the nation’s petroleum sector, despite Muhammadu Buhari’s nepotistic presidency having ended since May, because A.A.Rano Nigeria Limited and MRS Oil Nigeria Plc, two retail businesses owned by two northerners, Auwalu Rano and Sayyu Dantata, respectively, got the highly coveted contracts.

The NNPC GMD has frequently given the two aforementioned businesses, which are mostly merchants of petroleum products, preferential treatment. One such instance was in 2021 when they were both selected for the crude-for-fuel swap contracts to cater to the nation’s motor and jet fuel needs.

But the latest pipeline contracts awarded to the two companies are validating speculations that the Northern cabal is still very much active even after Mr Buhari’s exit.

The contracts were issued on a LOT basis, with MRS Oil securing the juiciest and LOT 4, that oversees depots in the South-West 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. 

A.A Rano won the bid for LOT 2, which gives the retail outlet control of the South-South region, and comprises the Escravos–Warri Crude Oil Pipeline (60km), Warri-Benin Products Pipeline (90km), Benin-Ore Products Pipeline (110km), Warri Depot, Benin Depot and Ore Depot.

Critics say the move was another means for the North to maintain its tight grip on power because it gives them the 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, regardless of the implications, which include regions of the country not getting enough fuel.

Industry professionals criticised the contract award, asserting it was too much power for any retail business to wield over the nation and that it would inevitably backfire sooner or later.

Kelvin Atafiri, CEO of Cavazanni Human Capital Limited, confirmed the fears of Nigerians that MRS Oil now exerts a significant influence in the nation’s South-West region where it can decide not to serve dissenting outlets with fuel and fix a price citizens will pay through the nose to purchase.

“LOT 4 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,” Mr Atafiri told Business Day.

The hushed manner in which the contracts were given out further cemented claims that the cabal was still conducting its usual operations, albeit in stealth. 

NNPC, in 2022, publicly defended its decision to pay N48 billion to ex-militant Government Ekpemupolo, popularly called Tompolo, to protect the nation’s pipeline from vandals over a 24 month period but has so far remained silent on the awarding of pipeline contracts to A.A. Rano and MRS Oil.

The State House did not immediately respond to enquiry as to whether President Bola Tinubu, who serves as the nation’s petroleum minister, was aware of the hushed contracts that were being cornered by A.A. Rano and MRS Oil. 

Mr Kyari, the NNPC boss, did not return comments as well on the matter.

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