Stakeholders, JP Morgan’s Analysts Hail Leadership Change at NNPCL, Say Its New Dawn

•Task Ojulari-led company to complete IPO, sustain production growth, boost investor confidence, others

•Hail Tinubu for selecting a ‘surgical team’ to transform company

Peter Uzoho and Dike Onwuamaeze

Yesterday’s dissolution of the board of the Nigerian National Petroleum Company Limited (NNPCL) by President Bola Tinubu and immediately filling it with seasoned oil and gas professionals led by Ahmed Musa Kida and Bayo Ojulari as Non-executive chairman and Group Chief Executive Officer, respectively, has gotten the endorsement of  JP Morgan’s Africa Emerging Markets Research team and has thrown local industry stakeholders into an unprecedented jubilation and excitement.

The new board as reported yesterday in THISDAY, included the GCEO, Bayo Bashir Ojulari, an ex- Managing Director of Shell Nigeria Exploration and Production Company Limited (SNEPCo)/Chief Operating Officer of Renaissance Africa Energy Company Limited – the new owners of Shell’s onshore business in Nigeria.

The leadership change that led to the exit of Mele Kyari and Chief Pius Akinyelure as GCEO and Chairman, respectively, brought in Musa Kida, an ex Deputy Managing Director of TotalEnergies as new Chairman of the national oil company.

Other members of the new board are Bello Rabiu – ex NNPC Group Executive Director (GED) for Upstream;  Yusuf Usman, ex-NNPC GED for Gas & Power; Babs Omotowa – ex-Managing Director of the Nigeria Liquefied Natural Gas Limited (NLNG); David Ige, ex-NNPC GED for Gas & Power; Austin Avuru, Executive Chairman of AA Holdings Limited and founding Chief Executive Officer of Seplat Energy Plc; and Henry Obih, ex-NNPC GED for Downstream.

Expressing their thoughts on the development, JP Morgan’s analysts noted that the recent change in NNPCL management was a big step forward in the overall oil sector reform agenda.

“We have previously written about the visible benefits of privatising Nigeria’s downstream refined oil sector (see here). However, we believe a private sector-led NNPC would complement other oil reform efforts (e.g enacting the Petroleum Industry Act and removal of oil subsidies).

“While it may not result in a sharp increase in oil production in the near term, it should result in improved transparency and better flow of oil dollars to the government.

 For now, the current account surplus remains large, US$17.5 billion last year, yet negative errors also remain large and limit the extent of FX reserve accumulation.

“The next catalyst is new NNPC FX financing arrangements, which should boost FX liquidity in the near term. Media reports suggest NNPC is in the final stages of agreeing another medium-term FX financing arrangement, collateralized with future oil output.

“If these arrangements are finalised in the coming months, the NNPC could have up to US$9.5 billion in new financing, which could be used to clear arrears owed for petrol imports and potentially contribute to FX reserve rebuilding.  However, while this financing arrangement had appeared imminent a few weeks ago, it is unclear what impact the change in management at the NNPC would have on its timing,” they added.

Also, some of the industry stakeholders, who spoke exclusively to THISDAY, including operators, contractors, oil service companies, explorationists and downstream players commended Tinubu for selecting and appointing some of the best constellation of seasoned professionals technocrats to lead NNPCL at this time.

They described the appointment as a new dawn and a game changer for the Nigerian oil and gas industry as well as a positive signal to international investors watching and waiting for the right time to come and invest in the country.

The stakeholders urged the Ojulari-led NNPC management team and the board to expedite action towards completing the planned Initial Public Offer (IPO) of the company.

They also urged the new team to sustain the current tempo in oil and gas production growth, boost investor confidence in the company and the industry and enhance the transparency and competitiveness of NNPC.

They equally commended the president for appointing a competent surgical team to clean up the abnormalities in NNPC and make it to function properly as a fully commercial, profit-oriented and globally competitive oil company with best operating standards.

In its remarks on the new appointment,

the Petroleum Contractors Trade Section (PCTS) in a note sent to THISDAY by its Chairman, Rosario Osobase, said the group “warmly welcomes the reconstitution of the Board of the Nigerian National Petroleum Company Limited (NNPCL) and the appointment of Engr. Bashir Bayo Ojulari as Group Chief Executive Officer.”

It said this well-curated leadership team, composed of seasoned industry professionals, underscores Tinubu’s commitment to revitalising Nigeria’s oil and gas sector for sustained growth and global competitiveness.

While extending their heartfelt congratulations to the newly appointed board members, PCTS noted that with such a brilliant lineup of expertise, the board stands on the precipice of history with the tremendous opportunity to tap into their wealth of industry knowledge available to transform NNPCL into a globally competitive entity, aligning with leading national oil companies globally.

The group added, “We also commend the outgoing board members for their invaluable contributions over the years. Their dedication and service have laid a strong foundation upon which the new board is poised to build, ensuring continuity and progress in the sector.

“Having professionally known the incoming GCEO, Engr. Ojulari during his tenure as Managing Director of SNEPCo, members of the PCTS remain confident in his strategic foresight and leadership capabilities. Under his guidance, NNPCL is well-positioned to optimise its assets and joint venture partnerships, ensuring alignment with the President’s vision to maximise value across the industry.

“For the continued success of NNPCL, the establishment of a strong, inclusive and transparent governance framework remains critical. A well-balanced board that embraces a diverse range of perspectives and expertise will provide the necessary foundation for the company’s long-term resilience and success in a dynamic global market.

“As a stakeholder in the sector, PCTS remains committed to supporting the ongoing transformative efforts of His Excellency and looks forward to collaborating with NNPCL and other stakeholders to advance Nigeria’s energy sector.”

Reacting to the development, the Nigerian Association of Petroleum Explorationists (NAPE) expressed its profound appreciation to President Tinubu for the recent appointment of a new board and management team for the NNPCL.

In a statement signed by its President, Mr. Johnbosco Uche, NAPE commended the president for taking this bold step towards repositioning the oil and gas industry for greater efficiency, transparency, and profitability.

The statement read in part, “The appointment of Bayo Bashir Ojulari as the new Group CEO, alongside Ahmadu Musa Kida as Non-Executive Chairman, is a testament to the President’s commitment to excellence and his desire to drive growth in the sector.

“NAPE is delighted to observe that the newly appointed board comprises seasoned professionals, including Austin Avuru, a former President of NAPE who has held esteemed top management positions within the oil and gas industry.

“The new board’s mandate to enhance operational efficiency, restore investor confidence, and increase commercial viability aligns with NAPE’s goals and aspirations for the industry. We are confident that the new team will bring the necessary expertise and experience to drive the oil and gas sector forward.

“We also applaud the President’s efforts to ensure that the new board reflects the country’s geopolitical zones, promoting inclusivity and representation. This move demonstrates the President’s commitment to fairness, equity, and national unity.

“Once again, NAPE commends President Tinubu for this laudable achievement and pledges its support for the new NNPC Board and Management Team. We look forward to collaborating with them to achieve the desired growth and development in the oil and gas sector.”

Chairman of the Petroleum Technology Association of Nigeria (PETAN) and Managing Director of Geoplex, Mr. Wole Ogunsanya, commended the choice of the new NNPC board, describing the new GCEO, an an experienced exploration and production engineer, who rose to the level of the Managing Director of SNEPCo.

According to Ogunsanya, Ojulari is coming in to help and continue to drive the increase of production of oil and gas that Nigeria needs to not only meet the Organisation of Petroleum Exporting Countries (OPEC) quota, but to also be able to have enough feedstock supply for the indigenous refineries.

He stated, “You recollect that our production was at 1.2 million barrels per day in 2023. We’ve managed to grow it to 1.8 million bpd. So, we have an experienced person in place now that can continue that growth path.

“And on the board, for the first time that we can recollect in NNPC history, we have a board of seasoned professionals. Virtually everybody on that board is an experienced oil and gas executive in their career -from ex-NNPC executives to private sector, high-level executives coming in.

“The chairman of the board is a former Managing Director of Total. We know the excellent job he did in TotalEnergies over the years before he retired. So, he’s bringing a wealth of experience to help manage the board of NNPC.

“So, it’s a major step in the oil industry. The level of leadership that we have in place is going to give major investor confidence to all stakeholders, both within and outside the country. It speaks volumes that Nigeria oil and gas is ready for business with this combination of management and board that we have in NNPC.”

Also, a former Chairman of PETAN and Managing Director of CB Geophysical Limited, Mr. Bank-Anthony Okoroafor, told THISDAY that the new NNPC team was the best decision that any President of Nigeria has taken in the history of oil and gas in the country.

He said, “We are excited, we are happy. The oil and gas industry because this is the first time we are putting the right people in the right position. The GCEO and the entire board are seasoned industry technocrats who have worked for more than 35-40 years in upstream. It’s the best decision ever taken by a sitting president.

“The new GCEO excelled as the MD of SNEPCo before he retired. He basically structured everything for Renaissance, the company bought Shell’s onshore business. He understands how to grow production. He understands how to manage production. So, he’s seasoned.”

In his remarks in a chat with THISDAY, Managing Partner at ENR Advisory, a specialist law firm focused on the energy and natural resources sectors, Mr. Gbite Adeniji, stated, “Today (yesterday) is Nigeria’s birthday because all of us are celebrating. It’s a strong signal that we’re about to turn into the direction of correctness.  The ship is now about to turn for success.

“NNPC, as you know, is in the heart of Nigeria’s economy. So, you see the quality of that board? It’s the best board in any public corporation.

“Just look across it. It’s a constellation of stars, of professionals, who have achieved a lot, who have experience and knowledge of the industry.

“A whole mix of global experience of full understanding of NNPC and the system. And also proves that Nigeria has people in every corner. Nigeria has solid people in every corner.”

Also, the Centre for the Promotion of Private Enterprises (CPPE) described the assemblage of an entirely new board for the NNPC limited as a signal of President Bola Ahmed Tinubu’s administration commitment to chart a new course for the corporation that has stagnated Nigeria’s economic progress.

Commenting on the leadership change at the NNPC, the Chief Executive Officer of CPPE, Dr. Muda Yusuf, said the quality of the governance and management of Nigeria’s oil and gas sector has been the bane of the country’s economic progress over the past few decades, adding that if Nigeria must change the narrative, it must get it right with the governance and management of the NNPC.

Yusuf said: “Recent changes in the NNPC signals the commitment of the present administration to chart a new course.

“The new management team is populated by professionals with proven record of performance in the private sector segment of oil and gas sector. They are, therefore, expected to change the face of the sector.

“We would like to see an NNPC that is comparable to its peers like Saudi Aramco, China National Petroleum Corporation, PETRONAS etc.

“We expect to see a dramatic improvement in corporate governance, better optimisation of oil and gas assets, and PPP investment framework that would drive efficiency, productivity and profitability.

“We would also like to see an end to refineries that have become a huge burden rather than assets on the economy.”

He added that the imperative of fostering the highest standards of corporate governance should be the topmost priority for the incoming board of NNPC.

“The listing of the NNPC Limited on both national and international stock exchanges would reinforce the desired corporate governance standards.

“However, all of these would be difficult to achieve if the political environment does not complement the realisation of this vision.

“It is, therefore, very critical that the independence of the new NNPC is guaranteed with zero tolerance for interference from the political leadership, the National Assembly and the bureaucracy.  These are critical success factors,” Yusuf said.

He observed that the country has not been able to leverage its huge oil and gas resources to advance the economic development frontiers as many other oil producing countries have done.

“Our peers as oil producing countries have done much better – United Arab Emirate, Norway, Saudi Arabia, etc. We have largely succeeded in building a huge rent economy around our oil and gas sector,” he said.