NNPC attributes N287bn profit to cost control, automating process

Mele Kyari, the group managing director of the Nigerian National Petroleum Corporation (NNPC) has said that cost cutting measures and automating its processes were key reasons why it could declare its first profit in 44 years.

In a press conference, Thursday night, Kyari said there were drastic changes to the way NNPC does business including gutting cost and ensuring that the corporation was efficient and accountable to Nigerians.

“We stopped buying the things we did not need, we insisted that all our contractors cut cost by 30 percent. We saw the opportunity to be much more efficient by automating our systems, to be careful about what we invests in and what we don’t and focusing on people issues so that when they are happy they would work better, be much more efficient and the combination first resulted to the reduction of losses in 2019 and thereafter, we ended up with a positive statement account at the end of 2020,” he said.

Elaborating on what costs were reduced, Kyari said the NNPC simply stopped buying what it does not need, engaged its contractors and insisted on cutting costs to at least 30 percent, and automated its systems to be faster and reduced logistic costs. He also said the corporation was able to attract low interest rate debt.

The NNPC declaring a net profit of N287billion, the first profit it declared in its 44 years history.

Read Also: NNPC records N234.63bn petroleum product sales in March

In a release signed by Femi Adesina, the government spokesman, the president said the announcement was in fulfillment of an earlier pledge pledge by the Federal Government to publicly announce the financial position of the Nigerian National Petroleum Corporation.

“I am pleased to announce the declaration of Profit after Tax of Two Hundred and Eighty Seven Billion Naira (N287 Billion) in Year 2020 by the Nigerian National Petroleum Corporation. This is sequel to the completion of the statutory Annual Audit exercise for Year 2020.

“The NNPC losses were reduced from N803 Billion in year 2018 to N1.7 Billion in year 2019 and the eventual declaration of Net Profit in Year 2020 for the first time in its 44-year history.

“This development is consistent with this administration’s commitment to ensuring prudent management of resources and maximization of value for the Nigerian people from their natural resources.

“I have further directed the Nigerian National Petroleum Corporation to timely publish the Audited Financial statements in line with the requirements of the law and as follow up to our commitment to ensuring transparency and accountability by public institutions.

“I congratulate the Board, Management and Staff of the Corporation and look forward to greater value creation for the Nigerian people,” Buhari said in the release.