NNPC & Her J.V.A. Partners – An Urgent Need For Mutual Respect
But for timely and often patriotic interventions of Joint Ventures Agreement Partners like Capital Oil and Gas Industries Limited, the Nigeria National Petroleum Corporation would without encumbrances pass for yet another dead asset of the Nigerian state. It is therefore hard to decipher why strategic business relationships which give the otherwise moribund corporation some new lease of life even recently are approached with contempt.
So offensive is the system of administering the NNPC that the most effective operations of the corporation are only those embarked upon on the strength of Joint Venture Agreements with capable partners including local players in the industry some of whom are as at now subject to one form of media onslaught or the other.
Clearly, the near comatose state of the NNPC cannot be divorced from the various shades of very sharp and unwholesome practises which has formed tradition in the corporation over the years. It should therefore not surprise Nigerians as to why the NNPC is in such a state which makes it impossible for most of its core functions like data collection/processing, supervision, exploration, mining, refining, storage, transportation, research, product bridging, product marketing and even financing to be performed.
Ordinarily, it is not hard to understand that in mutually beneficial relations, conflicts not indirectly related to improper financial records keeping may arise. What is normally most important is for partners to take such steps as proper reconciliation of records and transactions to always arrive at a common ground whenever conflicts emerge. This is a simple standards which responsible organizations would always live up to as means of preserving trust, goodwill and other mutual benefits. If other legal entities understand this trend, the NNPC clearly does not appear to.
Where a throughput storage dynamics is in place, common sense would usually suggest that liquid products stored under this terms may usually not be readily available on demand since the said storage facilities serve other purposes beyond the immediate purpose of storing a specific volume of liquid products. This is not very different from what a tripartite storage agreement of liquid goods provides.
Regrettably, the NNPC appears to lack good faith and morality required to understand the layman’s implication of what comes across as perhaps the simplest governing factor in a throughput storage transaction. As a result, they would rather comically say before selected media that the exact liquid products stored in a facility must be available on demand knowing quite well that the facility is not owned by an organization over which it possesses absolute supervisory jurisdiction.
There is no better evidence to prove that the NNPC is not business driven than this. Under normal circumstances, a smart corporation would simply demand that its stored volume be replaced at an agreeable time and term – this is if a debt obligation does not exist which predates the newest transaction between it and the storage partner where the former is liable and the later decides not to realize the debt by taking possession of such property of the debtor within its reach.
Beyond the rhetoric of disappearance of goods, the NNPC also thinks that with its unfettered access to scarce state resources which it played no tangible role in mobilizing, starting a needless conflict over a civil transaction and subsequently criminalizing a hitherto patriotic intent of its most valuable assets – in this case some of its Joint Venture Agreement Partners is better than opening its books of account to an independent reconciliation. Certainly, this is not the conduct of a responsible organization.
There is absolutely no gain in repeating for the umpteenth time that contrary to the opinion held by the NNPC, an independent and maybe forensic reconciliation of specific portions of its financial accounts and records is not a death sentence. Such due diligence provides the basis for a more robust engagement amongst partners which will eventually boost intra-partners confidence amongst other achievements.
N11B or whatever the NNPC claims as its due obligation from Capital Oil and Gas Industries Limited is an incredible figure in the energy, oil and gas sectors. Within the Nigerian context, several components of our ailing economy can be resuscitated with such volume of cash. Where after proper reconciliation of accounts between the NNPC and her Joint Venture Agreement Partners they are established as debt figures owed any of the parties, clear modalities will be fashioned for immediate payment to commence but not before.
The NNPC must quickly accept the simple fact that it cannot be judge in its own matter by simply (and habitually) waving off demands by it Joint Venture Agreement Partners that a review of specific portions of its financial records is necessary prior settlement of due obligations. As the Lex Non Cogit ad Impossiblia clause suggests, the NNPC in its struggle to be right cannot make a non-existent situation exist. It can also not make a valid argument by creating an impossible scenario.
It is known to local content investors that even recently, the NNPC has either forgotten or clearly refused to properly enter and create records for certain financial considerations it duly received from its partners. It is also known that the NNPC is the chief defaulter of most transaction dynamics mutually reached between Nigeria and her trading partners – some of these breeches are worth millions of dollars in fines and penalties; payable (but yet to be transmitted) to trading partners including Nigerian players. It is therefore not strange that on each instance where partners demand better methods of records keeping by the corporations, very stiff resistance is mounted in alliance with selected media organizations to whom investigative journalism may mean performing meta-physical stunts.
This repugnant trend championed by the NNPC is clearly the biggest clog in the wheel of financial dispute resolution. Resorting to garnering support from the most gullible of media organizations by planting comic relief tales and various kinds of managed scripts are nauseating because it is archaic and about the most inappropriate method of resolving business conflicts in this age of alternative dispute resolution and civil arbitration. If anything, parties to business disputes require a clear head and clarity of purpose not beclouded objectivity occasioned by provoking attitudes and innuendos which suggest that organized private sector plans to pitch end users against the state.
If the NNPC is interested in meeting its service level agreements with the Nigerian State, it must quickly realize that its Joint Venture Agreement Partners are priced assets which must be offered support and reasonable protection as stipulated in various international conventions guiding the energy industry. This is suffice to suggest that if the NNPC does not discontinue its ill-advised drive to strangulate local partners, there will be legal consequences as well as tough economic and financial implications.
That the corporation is by virtue of consistent bad management of its internal processes riddled with pyramids of local and international debts which it cannot meet in reasonable time is not enough reason to refuse an independent reconciliation of its accounts with business partners just as it should not spur it to attempt to arm twist partners into meeting questionable demands for payments and paying bogus refunds originally claimed on legitimate transactions.
The Nigerian local content act aptly describes measures which must be adopted to ensure protected participation of local stakeholders in the energy, oil and gas sectors. The NNPC as regulators of the industry must build stronger goodwill and friendship and not engage in such activities which will give it away as remarkably dishonest, unfaithful and not worthy of trust.
Ezeani, Chukwunonso Elvis is an avid thinker, reader & researcher. He tweets @NonsoEzeani1