NNPC GMD Allegedly Awards Control of Nigeria’s Pipelines to Northern Oil Entities.

NNPC GMD Allegedly Awards Control of Nigeria’s Pipelines to Northern Oil Entities.

Speculation Mounts Over Northern Cabal’s Influence in Post-Buhari Era

In a move raising concerns over the continued influence of a supposed Northern oil ‘cabal,’ Mele Kyari, the Managing Director of the Nigerian National Petroleum Corporation (NNPC) Limited, has reportedly awarded significant rehabilitation contracts for the nation’s pipelines to four oil companies.

Among these firms are two downstream retailers, sparking fears that this decision may grant these retailers control over the pipelines at the expense of other retail outlets and the Nigerian populace.

The companies in question, Oilserv Limited, A.A RANO Nigeria Limited, Macready Oil & Gas Service Company Limited, and MRS Oil Nigeria Plc, have been tasked with maintaining the country’s pipelines, a crucial task aimed at expediting the flow of crude oil to refineries and transporting its byproducts back to Nigeria.

Of particular concern is the speculation that the Northern cabal still wields considerable power within Nigeria’s petroleum sector, despite the conclusion of Muhammadu Buhari’s presidency in May. This speculation arises from the fact that A.A. Rano Nigeria Limited and MRS Oil Nigeria Plc, both owned by Northerners, Auwalu Rano and Sayyu Dantata, respectively, secured these coveted contracts.

Critics argue that the NNPC GMD has consistently favored these two businesses, primarily involved in petroleum product trading, even going back to 2021 when they were chosen for crude-for-fuel swap contracts, meeting the nation’s motor and aviation fuel demands.

The pipeline contracts have been distributed among these companies on a LOT (License to Operate and Maintain) basis, with MRS Oil notably obtaining the most significant share, LOT 4. This lot grants them control over key depots in the South-West region, including critical pipelines and depots in areas like Mosimi, Ibadan, Ilorin, and Atlas Cove. Similarly, A.A Rano secured LOT 2, granting them control over the South-South region’s pipelines and depots.

Critics argue that this consolidation of power in the hands of retail businesses could have severe implications for Nigeria, as it could allow a select few to dictate fuel distribution, pricing, and favoritism, potentially leaving some regions underserved during times of crisis or shortages.

Industry experts expressed concerns that these contracts may lead to an unhealthy concentration of power within the nation’s fuel distribution network. Kelvin Atafiri, CEO of Cavazanni Human Capital Limited, emphasized the advantage this could provide to the winners, stating, “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.”

The secrecy surrounding the awarding of these contracts further fueled suspicions that the Northern cabal continues to operate discreetly. While NNPC defended its decision to pay N48 billion to protect pipelines in 2022, it remains silent on the awarding of these pipeline contracts to A.A. Rano and MRS Oil.

Questions have also arisen regarding whether President Bola Tinubu, who serves as the nation’s petroleum minister, was aware of these hushed contracts. Despite inquiries, neither Mr. Kyari nor the State House has provided immediate responses on the matter, leaving many Nigerians anxious about the implications of this alleged consolidation of power in the hands of select oil entities.

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