NNPC boss’ tumultuous one year as chief presiding officer of oil, gas industry
The management team of the Nigerian National Petroleum Corporation headed by Mele Kyari was one year in office on the 8th of July, 2020.
Their coming coincided with the time when the oil and gas industry was indeed in a very tumultuous period, as productions were stagnant and no major decisions were taken on explorations and production. No final investment decisions have been taken for so many years, yet, strategic projects crying for attention are scattered across the landscape.
The NNPC was neck deep in what was regarded as under recovery in most of it business transactions. The books of NNPC subsidiaries were in negatives. Under this situation it was obvious that the industry needed a direction which must be led by a very pragmatic and focused person.
However in the last one year a few positive changes are beginning to be seen in the industry under the leadership of Mele Kyari, according to some stakeholders. They tried to point out those positive developments that are now given observers some ray of hope.
They pointed out that the corporation subsidiaries are now making profits, final investment decision (FID) for Nigeria Liquefied Natural Gas Limited train 7 has been taken. He also has been able to stabilize the industry in the face of COVID19 pandemic.
According to Okorafor Bank – Anthony, the immediate past chairman of Petroleum Technology Association of Nigeria (PETAN), he said: “He came at a time when the industry was in a turmoil, but he has been able to enable FID for Nigeria LNG Train 7 to happen, commission the take off of the Ajaokuta, Kaduna and Kano gas pipeline, just as he is pushing vigorously to ensure that the Bonga South West project takes off.”
He said he has done well but can still do better, stating however that these are not the best of times for the industry and the country as a whole.
Another industry operator that does want his named mentioned, said he has done extremely well by continuing with what his processor started. They did well as the subsidiaries of NNPC are now making profits, he said. “Unlike the other group managing directors before him, he warned the government about the consequences of not been proactive against COVID19 and got the authority’s attention”.
According to him, there is tough time ahead as the price of crude oil is still far from been comfortable and advised the NNPC boss to fasten his belt to meet the challenges ahead.
Tunji Oyebanji, chairman, Major Oil Marketers Association of Nigeria (MOMAN) and managing director of 11plc in his assessment of his one year, said: “I think he has a genuine interest in listening to stakeholders in order to move the industry forward. He also has brought an unparalleled level of transparency to bear on the affairs of NNPC. He has ensured industrial harmony and peace. The major area needing attention is dealing one way or the other with our moribound refineries”
Diran Fawibe, chairman and chief executive officer of International Energy Services Limited and Doris joint venture observed that the man has been able to insulate the NNPC from politics unlike previous administrations of the organisation.
He said he has brought quality into the top management of NNPC and he is generally known as very transparent and someone with high integrity. “He is a clear departure from the past administrations of NNPC and if he continues like this by the end of his tenure Nigerians are likely to see a different NNPC”
A typical example of this, is the statement of account of the corporation which for the first in 43 years was made public recently, he said.
Taking a cursory look at what has happened in the industry in the last one year, one would not doubt the fact that there areas where Mele Kyari and his team deserve to be given credits and in other areas they need to push hard so that the economy can be better for it.
One of the most profound actions the NNPC boss took when he assumed office was to put an end to under recovery in the corporation business transactions.
The country was losing a humongous amount of money through Direct Purchase and Direct Supply arrangement embarked upon by the NNPC to bring in fuel supply to the country.
He tried to sanitise the supply of PMS in the country with the introduction in the downstream,‘Operation White’, an initiative designed to make petroleum products imports, supply and distribution more effective and accountable.
As a collaborative project, ‘Operation White’ has something for everyone – government, marketers and the ordinary Nigerian. It guarantees access to affordable petroleum products in line with the intended target of the regulated supply system.
It also enhances energy security through containment of unwholesome PMS distribution in-country and improves transparency and accountability in the nation’s downstream Sector.
The NNPC boss aggressively took the necessary steps to ensure the realisation of the signing of the final investment decision (FID) of the Nigeria Liquefied Natural Gas project by the stakeholders. By the time project comes on stream the production capacity of NLNG would jumped from 22 million metric tons a year to 30 million metric tons. The project is expected to generate over $20billion of revenue to government over the project’s lifecycle, 10,000 direct and 40,000 indirect jobs.
Prior to the launch of NLNG Train 7 FID, NNPC had recorded a major feat with the recovery of over N80billion and US$45million debt from gas off takers, a feat which energized the sector.
Also,the realisation of the recently flagged off Ajaokuta, Kaduna Kano gas pipeline project which he claimed has been dear to his heart and therefore has invested everything, time, money and other resources to make the project happen is seen as commendable.
In the upstream sector of the oil and gas industry, within the short time he became the group managing director of NNPC, he got NNPC crude oil daily production to reach as high 2.3barrels by building on the fortunes of the corporation’s upstream flagship company, the Nigerian Petroleum Development Company (NPDC). Immediately after inauguration as the NNPC boss, works started on the N875.75m NPDC OML 65, Alternative Funding and Technical Services package with CMES-OMS Petroleum Development Company.
The upstream sector is a critical arm of the Industry value chain and perhaps, sets the pace of progress and functionality of the Sector. Activities in the upstream sectorhas been energised.
The publication of NNPC Audited Financial Statements which was done recently was received with a lot of accolades across the globe.
The NNPC under Kyari is anchoring its operations on the well-articulated TAPE agenda which translates to Transparency, Accountability and Performance Excellence.
Under the TAPE blueprint, the Transparency branch of the tree is configured to maintain positive image, share values of integrity to all stakeholders and expansion. Essentially, the accountability portion seeks ensure strict compliance with business ethics, policies and regulations.
Despite all these achievement observers believe that he should also pursue deregulation of the downstream sector with vigour by ensuring that all the necessary frameworks that will engender confidence in investors are in place.