After wasting billions, NNPC invites fresh bids for failed electronic management platform

NNPC TOWERS
NNPC TOWERS

After wasting billions in almost a decade, the Nigerian National Petroleum Corporation has, again, invited fresh bids to provide support services for its failed enterprise resource solution initiated to deepen accountability in its business processes.

The Systems, Applications, Products, SAP enterprise resources planning system is an electronic management solution initiated by the Obasanjo administration to monitor real-time operation of a network of NNPC subsidiaries and affiliates irrespective of their locations.

The electronic system is mostly deployed by global organisations to link their network of subsidiaries and units scattered in various locations, for easy monitoring of their operations and activities.

But, NNPC’s implementation of the system since 2009 turned a spin project for some crooked top officials to siphon several billions of Naira.

Rather than a seamlessly integrated system connecting all the corporation’s operational units, subsidiaries and affiliates, irrespective of location, some top NNPC officials entrusted with its management resolved to operate independent silos, without any connectivity.

The automated system, comprising different modules for standard business, financial, contracts management and personnel information, data and processes to ensure effective operations of the entire business value chain became a massive problem.

The deployment of the stand-alone SAP solutions in the human resources, crude oil marketing and finance departments malfunctioned, as a result of duplications in hardware, data baseline and operational system in the silos without proper integration.

An implementation review report by NNPC’s corporate audit department in February 2015 revealed how the system deployed in some strategic business units, SBUs, became ineffective and a drain pipe that gulped almost double the amount originally approved for its implementation.

Although the project was approved by former President Musa Yar’adua for about $36.75 million, the report said financial records revealed disbursements by NNPC, as at January 2015, to be about $70.66 million, excluding additional €6.06 million and N820.089 million for other expenses.

The implementation of SAP project was never achieved despite the huge amount spent.

Minister of Petroleum Resources, Ibe Kachikwu, told PREMIUM TIMES recently in an exclusive interview in Abuja the project, handled by SAP of Germany, through its Nigerian subsidiary, SAP Nigeria, had to be reviewed and key personnel removed, because its implementation failed to meet set corporate objectives and targets.

Minister of Petroleum Resources, Ibe Kachikwu [Photo credit: Pulse.ng]
Minister of Petroleum Resources, Ibe Kachikwu [Photo credit: Pulse.ng]

“There was nothing wrong with the SAP initiative. It remains a fantastic idea. But, I must say its implementation had issues we are trying to fix, because it failed to meet our corporate objectives and targets. That is why we had to review the project and remove those personnel who were in charge and replace them with new ones. I assure you we will fix it,” Mr. Kachikwu said.

Recently, the NNPC issued an advert on its website inviting tenders for the provision of consolidated SAP support service to the system it has been using for its human resources, logistics, industry solution, finance and payroll system.

The advert said the Corporation was “desirous of consolidating SAP support services for effective governance & control, standardization of operational procedures, measurable value addition and operational efficiency.”

The publication was for SAP technology companies with the capacity to provide functional and technical support services on the entire NNPC SAP landscape, including maturity build, business process optimization and capacity development.

The services also cover organisational change and value management, license management and optimization, help desk assistance, corrective maintenance and enhancements/configuration changes.

“The consolidated SAP support service shall consist of a central support for common solutions and zonal support for line of business solutions common to the SBUs in the zones, in line with the NNPC SAP COE central and zonal support organization,” the publication said.

Deadline for submission of tenders was December 6, 2016.


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  • Rommel

    Failure to punish impunity only breeds more impunity,every facet of Nigeria is enmeshed in corruption including majority of those that receive national merit awards,Nigeria has no good role models either in corporate world or public service for citizenry to follow,sad.

    • persona

      Very apt. The project nonetheless has to be executed even as they chase the culprit of the drain pipe. Kachikwu has admitted publicly the failure and shown the importance of the project.
      I liken this to our military that was good for nothing and ran away from BHT but with a revamp, they are the ones sending the enemies from the gates now.
      The nation has so many crooks directing her affairs, we should monitor this and see if it leads same way or different. A very goo first step by the minister.