Expert flays oil sector’s $680bn loss to corruption

NNPC LogoThe Chief Executive Officer, BOk Development Limited, Mr. Adekunle Disu, has condemned the loss of $680bn annually to corruption in the oil and gas sector due to sharp practices.

Disu, who described the situation as appalling, however, expressed optimism that the colossal loss could be effectively checked if government imbibed the political will to tackle the situation.

He said the country  could be salvaged from the scourge of corruption, particularly in the oil and gas industry through strong political will to deal with corruption, transparency in the activities of the Nigerian National Petroleum Company, and amendment of some sections of the Petroleum Industry Bill,  particularly as it concerns the powers of the minister of petroleum.

Speaking on the topic, ‘Corruption in the oil industry’ at the recently concluded 2013 annual conference of the Nigerian Bar Association, Lagos branch, Disu said, “To reduce the rot in the oil industry, there must be a strong political will to deal with the issue of corruption in our society. The corruption in the oil sector will only be a thing of the past if the political classes sincerely confront it strongly with every sense of altruism.

“There must be a truly transparent and competitive process in the bidding process  for oil blocs and oil-related contracts with strict adherence to rules that govern international best practices. There must be dichotomy between the regulatory authority and the prospective bidders”

Disu further recommended that there must be adequate cost control and accounting procedures, adding that periodic accounting and audit by the NNPC and external audit firm would guarantee transparency and quality accountability,thereby curbing corruption in the system.

On the power given to the minister of petroleum in the current draft of the PIB, the BOK boss recommended a total review so as to avoid misuse of power by the occupants of the position.

He said the powers ascribed to the minister of petroleum in the current draft of the PIB could lead to corruptive practices that the bill seeks  to eliminate.  “Under the current draft, the minister can inter-alia, grant and revoke leases unconditionally, determine royalties, decide the price of gas flaring and recommend members to the board of all the new companies and agencies,” he said.

Disu further called for a review of the minister’s ability to override the decisions taken by regulatory agencies, and to do all such other things incidental and necessary to the performances of the functions of the minister under the act.

“I believe that Nigeria can be salvaged from the scourge of corruption. I believe that the future of our country is bright.  But we need to muster the courage at the political level to begin the process of cleansing the Nigerian stable. Only then can our efforts at economic development and social stability begin to yield fruit,” he stated.

 Information from Punch was used in this report.
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