New trajectory of NNPCL under Kyari’s Leadership

By Tekena Amieyeofori

Quite early in the life of the Nigerian state, in the 1970s, General Yakubu Gowon (Rtd.), the then military Head of State, gleefully declared that the problem with Nigeria was not lack of the financial muscle to fund capital projects and meet other obligations of his administration, but how to appropriate the humongous resources derived from crude oil to benefit the citizens.

The discovery and subsequent exploration and production of crude oil suddenly cast a spell on a country with an unrivalled agrarian prowess that made it the envy of others in the comity of nations. Nigeria bade a calamitous farewell to her legendary groundnut pyramids in the north, and abandoned the sprawling cocoa and rubber plantations in the south.

The unprecedented fortune that came with the discovery of the “black gold” overwhelmed managers of the Nigerian economy to the extent that they jilted the old bride (agriculture) that opened the doors of financial prosperity at independence.

The military administration of General Olusegun Obasanjo (Rtd.), in its determination to maximise the economic gains of Nigeria’s vast crude oil and gas endowment, established the Nigerian National Petroleum Corporation (NNPC) on April 1, 1977 as a state-owned oil company with the statutory mandate to embark on exploration activities, refining, petrochemicals, product transportation, and marketing. At its inception, the NNPC was managed with vigour and foresight to effectively harness the vast economic potentials of oil and gas in the global economy, resulting in the building of oil refineries in Port Harcourt, Warri and Kaduna between 1978 and 1989.

The NNPC successfully ran the refineries to ensure energy sufficiency to strengthen the economy. Unfortunately, the state-owned oil corporation began to backslide when it came under the siege of the monster called corruption that assailed all sectors of the Nigerian economy with the passing of time. The refineries soon went aground as a result of poor management and the NNPC, the largest asset holder in the oil and gas industry, began to falter in its remittances to the national treasury.

To illustrate the administrative lethargy and managerial inertia that became the lot of the NNPC, it would be worthwhile to recall some of its statutory infractions with regard to financial misappropriations over the years. When the Federal Government hired KPMG to audit its account in 2011, it was discovered that the NNPC could not account for about N28.5bn on subsidy related claims. In March 2016, the Auditor-General of the Federation alleged that the corporation failed to remit around $16bn to the federation account. Earlier in 2014, Emir Lamido Sanusi, former Governor of the Central Bank of Nigeria (CBN), raised an alarm that a whopping $20bn was missing in the treasury of the NNPC.

Suffice it to say that the ordinary people have been at the receiving end of decadence in the NNPC that has left the Nigerian economy in dire straits. Owing to the comatose state of the refineries the country has, for many years, witnessed scarcity of refined petroleum products that the hoi polloi can hardly afford.

Consequently, small and medium enterprises that serve as the engine room of the economy have been forced to close up shop. Moreover, endemic corruption and inefficiency in the petroleum industry, prior to the enactment of the Petroleum Industry Act (PIA) , had provided huge disincentives for foreign investments.

The declining fortunes of Nigerians, due to gross mismanagement in the NNPC, is clearly a breach of social contract between government and the people. This scenario has significantly eroded generalised trust in the NNPC and the Federal Government over the years. Consequently, there has been an avalanche of protests against operations of the NNPC and the management of the petroleum industry. In fairness to those disparaging the NNPC, they are only exercising their right to freedom of expression which is a vital tool to keep governments and their agencies under check.

However, there is enough evidence to suggest that a few disgruntled elements who are still roaring themselves hoarse in the present dispensation, particularly those calling for the head of Mr. Mele Kyari, Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), are acting from a hangover spell.

The naysayers have adamantly refused to accept the fact that it is no longer business as usual in the NNPC, which has undergone significant reforms to live up to its obligations to the Nigerian state and its people. These doubting Thomases are only victims of circumstance whose condition can be likened to plight of hypochondriacs. In medicine, hypochondria, also called health anxiety disorder, is a state of obsession with the idea of having a serious medical condition that does not exist. Hypochondriacs exaggerate symptoms and severity of a suspected illness without supporting evidence, and grope in all directions for solutions in their helpless state of phantasmagoria.

In the realm of cultural psychology, hypochondriacs are constantly weighed down by paranoia and panic attack, and resort to compulsive behaviours that are evident in damaged self-respect, negative attacks on leaders, fault-finding tendencies, fierce criticism, and a pessimistic outlook on life generally.
Caroline Crampton, writer and podcaster, in her latest book entitled “A Body Made of Glass: A Cultural History of Hypochondria”, admits that she was once under the numbing influence of hypochondria when she confesses to have haboured fears that a cured cancer disease for which she had been diagnosed at age 17 would return. Crampton goes further to chronicle other notable intellectuals like Elizabeth Browning, Phillip Larkin, Tennessee Williams et al who fretfully battled against unfounded fears about personal health, safety and security in their lifetime.

Given the distressed state of the Nigerian economy, occasioned by hyperinflation, it is not out of place to find a high prevalence of stress-induced hypochondria in the country. Fortunately, the available treatment for this ailment, as doctors have prescribed, includes therapy and counselling. Therefore, it would be helpful to highlight the laudable achievements of the new NNPC under the supervision of Kyari to convince the naysayers that light has come at the end of the tunnel.

On June 20 2019, Mr. Mele Kolo Kyari was appointed the 19th Group Managing Director (GMD) of the NNPC. His appointment coincided with a period of comprehensive reforms in the petroleum industry. On assumption of office, Kyari launched a policy of Transparency, Accountability, Performance and Excellence (TAPE) to retool operations of the corporation. To this end, he opened the books of NNPC to the public for proper scrutiny.

This culminated in the publication of the 2018/2019 audited financial statement of the state-owned petroleum corporation and its subsidiaries registered under the Companies and Allied Matters Act of 1990 to enhance transparency in joint venture finances, the first of its kind in over 40 years of its existence. Under the dynamic and able leadership of Mr. Kyari, the NNPC enlisted with the global Extractive Industry Transparency Initiative (EITI).

Implementation of the TAPE policy led to a drastic reduction in the corporation’s loss profile in a period of two years, from N803bn in 2018 to N1.7bn in 2019. In 2020, former President Muhammadu Buhari announced that, for the first time in its history, the NNPC was able to declare a profit of N287bn after tax deductions in that financial year. In April 2022, the NNPC paid $3.68bn out of a total $4.689bn cash call debt to five joint venture partners.
It is a known fact that all efforts to revive Nigeria’s ailing refineries from 1999 to 2015 proved abortive. On April 6, 2021, Kyari led the NNPC to sign a $1.5 billion Engineering, Procurement and Construction (EPC) contract with Technimont SPA to rehabilitate the Port Harcourt refinery. Construction work commenced on May 6, 2021 and witnessed a slight delay in its completion date.

Through sheer commitment of the new NNPC led by Kyari and the able supervision of the petroleum ministry, the revamped Port Harcourt refinery that had been shut since 2019 was opened on November 26, 2024. The reopening of the Port Harcourt refinery marks a new dawn in the operations of the NNPC and the petroleum ministry, as most Nigerians have acknowledged. In the words of Mr. Peter Obi: “I wish to congratulate the Nigerian National Petroleum Corporation (NNPC) for fulfilling the long-standing promise of revamping the old Port Harcourt refinery. The refinery which comes on stream today boasts of an installed production capacity of 60,000 barrels of crude per day. Approximately 200 trucks are expected to load products daily from the refinery. Nigerians await the corresponding impact on pump prices and the overall economy.”

The revival of the Port Harcourt refinery bolsters public confidence in government’s assurance about the resuscitation of other moribund refineries that will be fixed to commence production in no distant time. When they all become operational, as anticipated, Nigerians will begin to appreciate the “Renewed Hope” economic blueprint of President Bola Tinubu, as petroleum products scarcity and what is generally considered unreasonably high cost of energy will gradually become a thing of the past. In addition to making petroleum products available and affordable to Nigerians, the NNPCL now has the mandate to implement a renewable energy initiative and other projects that are at various stages of completion, all of which will not be expatiated upon here, for lack of space.

The NNPCL which played a critical role in the enactment of the PIA, currently one of the most important pieces of legislation in the country, was able to attain greater achievements, which seemed impossible, under the leadership of Kyari. Until his previous appointment in 2019, the GCEO of NNPCL was Group General Manager of the crude oil marketing division of the defunct NNPC, an assignment which he carried out diligently with a vast knowledge of crude oil marketing, oil and gas trading, and petroleum economics.

At the time, he became the helmsman of what is now Nigeria’s state-owned oil company, Mr. Kyari had over 32 years of experience after traversing the entire value chain of the petroleum industry.

From the foregoing, it is evident that the recent querulous protests and media attacks launched against the NNPCL and Mr. Kyari are unfounded and launched out of ignorance or sheer malevolence. Contrary to the claims of Kyari’s traducers, it has been nearly five years of growth and recovery in the NNPCL which has been repositioned on a positive trajectory, after many years of administrative and managerial inefficiency.

Dr. Amieyeofori, Journalist and Conflict Scholar, writes from Abuja.