Mele Kyari: Two Years Of Transparent Leadership At NNPC

Group Managing Director of NNPC, Mallam Mele Kyari

There is no denying the fact that the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari has been through thick and thin with his transparent leadership style to reposition the corporation.

Mallam Kyari is marking his two years in office today, July 8, 2021 as the helmsman of NNPC, with avalanche of well-deserved commendations from energy experts in Nigeria, and across the globe.

As a man of vision and determination, kyari has turned around the corporation’s administrative quagmire and opaque business operations that hitherto scare away both local and foreign investors from the oil and gas industry.

Frankly speaking, one of the issues Mallam Kyari spoke passionately about during his inauguration was Transparency and Accountability.

He emphasized that transparency and accountability would be the cardinal pillars of his management.

He promptly followed up his inaugural pronouncement with the launch of his management’s strategic objectives two weeks later.

He christened it as Transparency, Accountability and Performance Excellence (TAPE).

Since then, he has walked the transparency and accountability talk by opening up the books of the Corporation the way no other management before his has done. The key accomplishments in this regard include:

The publication of the 2018 and 2019 Audited Financial Statements of the Corporation and its 19 subsidiaries registered under the Companies and Allied Matters Act (CAMA) 1990 as amended alongside that of the National Petroleum Investment and Management Services (NAPIMS) to provide clarity on Joint Venture finances.

The AFS were published in the Corporation’s website for all interested parties to access and scrutinize. This is the first time the Corporation’s AFS were made public in such a manner.
A major revelation in the Audited Financial Statements of the two years so far published is the 99.7% reduction of the Corporation’s loss profile from ₦803bn in 2018 to ₦1.7bn in 2019. Following this trajectory, the Corporation is likely to declare profit in the 2020 AFS which is billed to be released soon.

The Mallam Kyari-led management also sustained the Publication of the Corporation’s Monthly Financial & Operations Reports (MFOR) in line with the TAPE vision. NNPC remains the only national oil company that publishes its financial and operations reports monthly globally.

Obviously, Nigerians will not forget in a hurry the evil days of persistent fuel scarcity vis-à-vis its direct negative impact on the economy. This, and many more he has changed. Indeed, he has repositioned the NNPC on the part of profitability and sustainable growth. Posterity will judge in his favour.

One could still recall that on July 8, 2019, Kyari was officially inaugurated as the 19th GMD of the NNPC, and it would not be lost on anyone that during his inaugural address, he clearly indicated the direction his management intended to pilot the Corporation.

Two years down the lane, a cursory look at his actions and strides vis-à-vis the key objectives he set at his inauguration would give a clear picture of his achievements in the last two years.

Upstream

In the upstream petroleum sector, one of the goals the GMD set at his inauguration was to increase the national crude oil reserves to 40billion barrels. This, he is pursuing diligently with exploration work and others ongoing in some parts of the country, like the Kolmani River II and III Wells, Upper Benue Trough, Bida, Sokoto Chad Basins.
His target was to boost the nation’s oil production to 3million barrels per day.

To achieve that target, he immediately set about resolving disputes around a number of oil blocks that had led to production shut-in. A case in point is the resolution of the dispute involving Shell and Belema Oil that shut in over 30,000barrels per day production in OML 25. That dispute was effectively resolved to restore production in the oil block.

Just recently, in May 2021, Mallam Kyari repeated a similar feat when he led the Corporation to sign a series of agreements with SNEPCo and other PSC partners to resolve the disputes around another deep offshore block, OML 118, leading to the renewal of that acreage with the prospect of a new $10billion investment in the development of the Bonga South-East Field. This will further boost the nation’s oil production.

Mallam Kyari-led management has secured a number of alternative funding facilities. These include: the N875.75m NPDC OML 65 Alternative Funding and Technical Services package with CMES-OMS Petroleum Development Company, the $3.15bn Alternative Financing Package with Sterling Exploration and Energy Production Company Limited (SEEPCO) and other partners for the development of NPDC’s OML 13.

First oil of about 7,900bpd was achieved from the project on 1st April, 2020, while production is expected to peak at 94,000bpd of oil and 542mmscfd of gas within four years.

Downstream

NNPC’s Downstream operation is also experiencing the Mallam Kyari’s touch with the introduction of Operation White which has helped in streamlining petroleum products importation, supply and distribution across the country.
As the sole importer of petroleum products in the country, NNPC has succeeded in keeping the nation well supplied. NNPC has emplaced a stable fuel supply system to guarantee zero fuel queues throughout the country in the last two years of Kyari.

Gas Development

NNPC has focused heavily on the gas sector in keeping with the aspiration of the administration to diversify the economy by transforming the nation into a gas driven economy.

In this regard, NNPC drove and achieved the Final Investment Decision on the NLNG Train 7 Project in December 2019. The project was on the drawing board for over 10 years. The project is expected to generate over $20billion of revenue to the Government over the project’s lifecycle, 10,000 direct and 40,000 indirect jobs.

On 15th June, 2021, the ground-breaking ceremony of the NLNG Train 7 Project was conducted signaling the commencement of construction work on the project.
NNPC also successfully flagged-off the construction of the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project on 30th June, 2020. The project which has been described by the President as a game-changer is an integral part of the Trans-Nigeria Gas Pipeline (TNGP) with a capacity to transport about 2.2billion cubic feet of gas per day.

The infrastructure designed to feed gas into the AKK – the Escravos Lagos Pipeline System II (ELPS II) and Oben-Obiafu-Obrikom (OB3) gas pipeline are also being aggressively executed and expanded to increase delivery capacity from 1.5BCF/D to over 3.5BCF/D. The ELPS II has reached 96.34 per cent completion.

Mallam Kyari also led the Corporation to achieve a $300million reduction in the cost of the AKK Gas Pipeline contract via contract renegotiation from the initial $2.8billion.

Additional major stride in the gas sector was witnessed in late 2020 with the commissioning of the Oredo Integrated Gas Handling Facility (IGHF) and the Liquefied Petroleum Gas Storage and Dispensing Unit. The facilities are wholly owned and constructed by the Nigerian Petroleum Development Company (NPDC) to address domestic gas supply challenges.

The facilities currently deliver over 200 million standard cubic feet of dry gas per day and 330 metric tonnes of Liquefied Petroleum Gas (cooking gas) which is equivalent of 16 units of 20tonnes LPG trucks per day into the domestic market.

This year, Mallam Kyari led NNPC to take the Final Investment Decision (FID) with the Brass Fertilizer and Petrochemical Company for the $3.6bn Brass Methanol Plant in Odioma, Bayelsa State.

On 22 April, 2021, NNPC executed a Gas Development Agreement (GDA) for the Oil Mining Lease (OML) 143 with its partner, Sterling Oil Exploration and Production Company (SEEPCO). The project will boost the nation’s gas production by 1.2trillion cubic feet (tcf).

Refineries Rehabilitation

Another goal that the GMD set for his management at inauguration in 2019 was the rehabilitation of the refineries. Mallam Kyari has made good on that promise by driving the rehabilitation project to an advanced level. On 6th April, 2021, he led NNPC to sign the $1.5bn Engineering, Procurement & Construction (EPC) Contract Agreement with Tecnimont SpA, for the complete rehabilitation of Port Harcourt Refinery.

On 7th May, 2021, the GMD led NNPC and the contractor, Tecnimont S.p.A., to flag off construction work on the Port Harcourt Refinery rehabilitation project.

He is in the process of making good his promise to introduce a new operational model for the refineries post-rehabilitation with the call for bids for the Operations & Maintenance Contract for the refineries advertised recently in the media. The O & M model would ensure that the refineries are managed by contractors with requisite experience who would ensure that they are regularly maintained as and when due.

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