NNPCL: The challenges before Ojulari|Rapheal
President Bola Tinubu on Wednesday dissolved the board of the Nigerian National Petroleum Company Limited (NNPCL). He appointed Bayo Ojulari as the Group Chief Executive Officer (GCEO) and Ahmed Musa Kida as non-executive chairman of the national oil company, respectively. The shake-up also led to the exit of Mele Kyari and Pius Akinyelure as GCEO and Chairman. Other members of the new board are Bello Rabiu, ex-NNPC Group Executive Director (GED) for Upstream; Yusuf Usman, ex-NNPC GED, Gas and Power; Babs Omotowa, ex-Managing Director of the Nigeria Liquefied Natural Gas Limited (NLNGL); David Ige, ex-NNPC GED, Gas and Power; Austin Avuru, Executive Chairman of AA Holdings Limited and founding Chief Executive Officer of Seplat Energy Plc; and Henry Obih, ex-NNPC GED, Downstream. The President tasked the Ojulari-led board to increase the NNPC’s share of crude oil refining output to 200,000 barrels by 2027 and reach 500,000 by 2030.
Expectedly, the change of guards in NNPCL will naturally elicit mixed reactions from industry stakeholders and other Nigerians. While some applauded the move, others criticized it. The reactions notwithstanding, the new board made up of seasoned oil experts and gas professionals will face a lot of daunting challenges to move the oil company forward to high profitability. Since the former oil behemoth transformed to the new NNPCL some years back, many Nigerians do not know the difference between the new and the old. They have not noticed any radical and dramatic change in the way the new ‘born again’ NNPCL is administered from the former.
Obviously, the NNPCL has not cured itself of the ailments of the former NNPC, which include opaqueness and lack of transparency in the way the national oil company is managed. Its recruitment system is still shrouded in secrecy that only those highly connected can aspire to work in NNPCL. Even getting industrial internship or placement for NYSC programme in the oil company depends so much on connection and not necessarily expertise. Making the company profitable like the Saudi Arabia’s Aramco or the Brazilian Petrobras, has remained a tall order.
The Bayo Ojulari-led new board will hit the ground running. The tasks before them are daunting but never insurmountable. Good enough, they are very familiar with the terrain and adequately equipped to turn around the fortunes of the national oil company. One thing they should do is to begin to run the NNPCL like a truly limited liability company set up to make profits like other business entities in the country. They must begin the process of selling the company’s shares to interested Nigerians and others through its Initial Public Offer (IPO), which will list the NNPCL in Nigerian Stock Exchange (NGE).
Having it listed on the NGE is the first step towards making it a truly public quoted company. It will also enhance its corporate governance standards. Let the IPO be professionally done so that the company is not hijacked by a few rich individuals and moneybags. Moreover, the IPO should never be politicized or meant to settle party members or supporters of the party in power. The new management will improve on the laudable achievements of the Mele Kyari-led board, including their various reforms that led to the growth of the sector, and even surpass it.
Even though the Federal Government remains the major shareholder of the oil company, having other Nigerians as shareholders will enhance transparency in the running of the company as well as its competitiveness. It will enthrone industry best practices in terms of staff recruitment with emphasis on merit, experience and competence rather than the present ‘who you know’ practice. Our experience in Nigeria has shown that government-run companies are not efficient and transparent. They are bogged down by corruption, nepotism and inefficiency. Therefore, let’s minimize government intrusion and interference in the management of the board.
The new management should fine-tune the ‘naira for crude’ policy to enhance its transparency, effectiveness and efficiency. The policy which was meant to lower the pump price of petrol has not succeeded in doing so considering the recent hike in petrol price to N925/litre in its retail stations in Lagos and N950/litre in Abuja by the NNPCL. In other parts of the country, including the South-East, the price is likely to be higher. The new pump price of petrol as announced by the NNPCL contradicts and defeats the aim of the naira for crude policy.
Let the new management ensure that all our local refineries are working while new ones are encouraged to come on board. The refineries should be our assets and not serve as drains on the economy. They should be made to work efficiently with minimized annual turn-around maintenance with bogus costs. For the new board to achieve the desired goal, it must be truly supported by the government, the political class and industry stakeholders. Without this cooperation and buy-in of the government, everything will be a ruse.
The new board should look towards the way Saudi Arabia’s Aramco and Brazil’s Petrobras are managed. We should emulate United Arab Emirate, Norway, Saudi Arabia and other oil-producing countries in managing our national oil company. It is sad that decades after the discovery of oil in commercial quantities, we have not been able to manage our oil resources to truly develop the country and its citizens. Not even the enactment of the Petroleum Industry Act (PIA) has curbed the inherent corruption in the oil and gas sector.
It is unfortunate that the country loses billions of naira annually to oil theft and pipeline vandalism. The environmental degradation of oil-bearing communities has not been fully addressed. All these are some of the challenges the new board will address to enhance our oil production. Let the new board make deliberate efforts to enthrone industry best practices that will enhance efficiency, productivity and profitability. Nigerians expect the best from the Ojulari-led board. There should indeed be no room for excuses. Nigerians are tired of excuses over the management of our oil wealth. Nigerians should be made to enjoy their oil wealth like other oil-producing nations across the world.
Credit:The Sun