NNPC Reforms: The Mele Kyari’s Challenge
By Bolade Nafisat
The Nigerian oil sector is for long the lifeline of the federation and its most controversial national economic institution.Dogged by serial allegation of entrenched and endemic corruption,promise of reform by successive governments has been met with skepticism from the citizenry.The public perception was so sticky that many still think the new helmsman wont make any difference.
The scenario is however calling for a fresh look as the new sheriff at the NNPC towers appears to be ready or is already shaking the table. First quality the Group Managing Director of NNPC brought to the job is the reputation for being a resolute anti-corruption crusader.Friends and foes acknowledge that in Kyari is a committed crusader for transparency and accountability in the management of natural resources.
His second quality is what many Industry watchers described as his competency demonstrated over a long period of time in various capacities. This skill of innovation he is already bringing to bear on the job. Watchers are keenly observing hos simplistic pursuits of new ideas to reform the hugely conservative Corporation.
His friends said he would deliver on many fronts by implementing much expected reforms in the sector. But the public perception is still negative. And he appears to be conscious of this national.pessimism when he was crafting his agenda.At his maiden meeting with the staff,Kyari presented his agenda entitled Roadmap to Global Excellence, which encapsulates the strategic focus of his management.
Under the roadmap, NNPC operations under the new management would be anchored on Transparency, Accountability and Performance Excellence (TAPE). This is very significant because it captures the totality of the virus behind NNPC crisis of trust and confidence with the citizenry.
He explained that while the Transparency component of the agenda was aimed at maintaining positive image, share values of integrity and transparency to all stakeholders, the Accountability leg of the campaign would assure compliance with business ethics, policies, regulations and accountability to all stakeholders.
In terms of the two-prong item of Performance Excellence, Mele Kyari said the idea was to entrench a high level of efficiency anchored on efficient implementation of business processes which would also emplace an appropriate reward system for exceptional performance among the workforce.
Kyari said that under his watch, the NNPC would continue to give attention to safety and security of personnel and assets while creating a business environment that would be anchored on technology and innovation to improve efficiency which would ultimately create the desired outcome of strengthening the NNPC brand.
On the issues of domestic refining capacity, the NNPC GMD said the corporation would pursue the ongoing refinery rehabilitation exercise to a successful conclusion while deliberate efforts would be made to encourage the establishment of new private refineries to ensure that the country becomes a net exporter of refined petroleum products.
He said the corporation would sustain the ongoing exploration activities in the inland sedimentary basins to improve reserve while pursuing a program to grow NPDC, adding that reports from the exploration drilling in the Kolmani River in the Gongola Basin were very encouraging .
In terms of gas and power development, Kyari assured that NNPC would support stakeholders along the power value chain to improve generation and transmission which would naturally translate to improved power supply.
Not stopping at unveiling the agenda,the GMD proceeded to set performance target for the top leaders of the corporation.These include growing the nation’s crude oil reserves and production, ensuring steady supply of petroleum products and supplying adequate gas to meet the next level agenda of the Federal Government.
Mele Kyari gave the charge to the Chief Operating Officers of the various Autonomous Business Units, ABUs of the Corporation at a sign-off event held for the COOs to formally commit to the delivery of the Key Priority Areas at the NNPC Towers, Abuja, on Monday.
He explained that all the Key Performance Areas, KPAs and Key Performance Indicators, KPIs were designed by in-house experts without inputs from consultants, adding that it was an indication of the abundant talents within the corporation’s human resource base.
“I have the conviction that we can deliver on these KPAs and even do more. We have enormous goodwill from our various stakeholders and Nigerians that we can do things differently. Let me emphasize that our stakeholders have tremendous trust in us and it is only excellent performance that can sustain the trust they have in us,” Mallam Kyari said.
He maintained that the clear goal of his management was to drive an NNPC that is Transparent and Accountable with Performance Excellence, TAPE, stressing that the milestones for all the ABUs and Strategic Business Units, SBUs would be delivered within the timelines.
Mallam Kyari posited that the KPAs were the roadmap for growth and consolidation, assuring that his management would ensure effective stimulation of industrial growth in the country.
Tagged the Roadmap for Growth and Consolidation, Kyari’s new Corporate vision of Transparency, Accountability & Performance Excellence, TAPE would ensure that all of NNPC’s seven Directorates leveraged on technology and innovation to deliver on their Key Priority Areas, KPAs.
The KPAs also have clear-cut roadmap and strategies towards actualizing the TAPE mandate.
For the Upstream Directorate, the KPAs are: growing the nation’s reserves and increasing production; while the KPAs for the Gas and Power Directorate include the expansion of the gas sector footprint towards stimulating industrialisation.
While the Refining and Petrochemicals Directorates would focus on enhancing local refining capacity as its KPA, the Downstream Directorate would ensure efficient and seamless petroleum products supply to guarantee energy security for the country and ensure that the critical oil and gas infrastructure are secured, and the Ventures Directorate would work to ensure that the corporation’s new businesses are capitalized and commercialised.
For the Corporate Services Directorate, the Key Priority Areas are the development of the corporation’s human capital and excellent service delivery, while the Finance and Accounts Directorate is charged with ensuring financing for growth and effective liquidity management.
The highpoint of the event was the signing of performance bonds by all the Chief Operating Officers to commit their directorates to the delivery of their various KPAs.
The new helmsman has recorded successes in some areas since he took over. Some industry watchers think it is too early ;others believe the beginning has confirmed seriousness for the reform of the sector.How Much freedom he will have to push the reform is yet to be seen. But what he had achieved by the open bidding process speaks volumes of what to expect.
Speaking with Reuters in an interview ,the NNPC Chief opened up on a wide range of issues. Nigeria’s state oil company he said plans to partner with a private refinery under construction on the shores of Lagos to turn the oil-producing country into a fuel supplier for the region.
The aim to ink a contract with the Dangote refinery, with a capacity of 650,000 barrels per day (bpd).This is part of Kyari’s blueprint for transforming the Nigerian National Petroleum Corporation (NNPC) into a world-class state oil company.
The refinery, being built by billionaire Aliko Dangote, is set to be Africa’s largest.
Kyari, who also intends to push for more transparency, said NNPC wants to be a “supplier of first resort” for the Dangote refinery.
“Ultimately, it will be a contract to supply crude,” he said.
Kyari said he would publish the full list of those holding the nation’s crude oil contracts and the firms who won deals to swap Nigeria’s crude oil for products, along with audited accounts of NNPC’s books.
He said the openness, and a plan to improve commercial terms for oil companies, would spur investment that has been throttled by uncertainty and opacity.
The contract lists have not been published for years, and NNPC has been dogged for decades by a reputation for corruption.
“We are going to do everything possible to make that open, the businesses open, so that people can actually predict what we’re going to do next,” Kyari said, adding that this would help to attract investment.
He said the contracts for swapping fuel would be published by the end of next week, though “clarifications” were needed before the crude oil contracts could be published. Industry sources told Reuters that those two-year contracts, awarded earlier this year, included close to 100 names.
NNPC is also pressing ahead with plans to revamp its own ailing refineries – despite a nameplate capacity at Dangote refinery that is well above Nigeria’s consumption.
“It’s worth it,” Kyari said of NNPC’s refinery overhauls, adding that Nigeria could become a fuel supplier to the entire region. “Africa needs refining capacity,” he said.
While he said they are considering both government and private funding, after the revamps, third parties would maintain and operate the state-owned refineries to ensure reliable production.
Italy’s Maire Tecnimont is already working on the Port Harcourt plant, and Italian refiner ENI is an adviser. The refineries have processed oil only sporadically for years, leaving the nation to import virtually all its own fuel needs.
Kyari said that some ambitious proposals, including selling down government stakes in upstream oil and gas joint-venture agreements and changing the way it pays NNPC’s portion of the bills owed under those deals, were on hold for now.
The government still intends to sell its stakes to less than 40%, Kyari said, but he noted that there was currently no framework in place for the sales.
NNPC is in talks with all operating partners to improve commercial terms, but he said the long-delayed legislation to overhaul the oil sector, known as the petroleum industries bill, needed to pass quickly to spur investment.
“There are investment decisions that cannot be made now because the investors are wary of the fiscal environment,” he said.
The mammoth bill, covering everything from fiscal terms to Niger Delta community engagement, has been in the works for over a decade. But Kyari said the current government, with the legislature controlled by the party of President Muhammadu Buhari, could pass it.
“This time around, you have the best alignment,” he said. “And I’m sure getting it passed will not be difficult.”
The Take Over
Mallam Kyari, had taken over the corporation in late July with a vow to reverse the trend of petroleum products importation in the country by rehabilitating the existing refineries and encouraging private sector investment in the refineries sub-sector. The 19th GMD of the corporation had opined that that “We must end the trend of fuel importation as an oil producing country. We will deliver on the rehabilitation of the four refineries within the life of this administration and support the private sector to build refineries. We will support the Dangote refinery to come on stream on schedule. We will transform Nigeria into a net exporter of petroleum products by 2023″
The age-long Federal Government’s target of raising crude oil production and reserves to 3million barrels per day and 40billion barrels respectively ,he said was possible and that he would galvanise the corporation to achieve it by 2023.
On transparency and accountability, Kyari noted that the presence of the Chairman of the Economic and Financial Crimes Commission (EFCC), Mr. Ibrahim Magu, at the event was a pointer to how much NNPC had changed over the past three years from the old image of a corruption-laden organization, stressing that he would continue to entrench the culture of accountability in the affairs of the corporation.
“We are going to work with the EFCC to remove every element of discretion from our processes, because discretion is one of the greatest enablers of corruption”, he said.
Speaking further on his commitment to entrench transparency in the operations of the corporation, Kyari said every Nigerian was a stakeholder in the corporation, which implied that everyone’ right to information on how NNPC is managed, adding: “NNPC will not be opaque, we’ll be transparent to all so that at the end of the day everyone will be in a position to assess us and say what we have done right or wrong”.
The GMD who barred members of his family from accepting gifts on his behalf said he would continue the automation of the petroleum products sale process so that marketers can buy products online.
“We will do this job with integrity, we’ll never put personal interest above that of the nation or the corporation”, the new GMD vowed, adding that he was conscious of the fact that he would ultimately be accountable to God on every of his actions.
The Farewell from Dr Baru
Speaking earlier on his tenure as GMD, Dr. Baru said he did his best to put the corporation on the path of sustainable growth.
He acknowledged the roles played by each of the six Chief Operating Officers and Chief Financial Officer who made up his top management team in the success of his management and wished the best in their future endeavours.
He urged the new GMD and his management team to focus on staff development, enhance transparency, improve on delivery of energy security to Nigerians, and do everything to step up crude oil and gas production.
Dr. Baru who was visibly elated at the honour of being the only GMD since the inception of the corporation in 1977 to leave office upon attainment of the statutory retirement age and for whom a valedictory session was held, expressing appreciation to staff of the corporation for their cooperation, even as he urged them to extend same to the new management.
In a goodwill message, the pioneer Group Managing Director of NNPC, Chief Festus Marinho, commended Dr. Baru for his sterling leadership qualities.
He said the valedictory session brought tears to his eyes because it symbolized the fulfilment of the dream of a seamless and peaceful transition which he and President Buhari, as founding fathers of the corporation, conceived for the corporation.
The alternate Chairman of the NNPC Board of Directors and former GMD, Dr. Thomas John, on his part, said he was proud of both Dr. Baru and Mallam Kyari, being the one who recruited them during his time as GMD.
“I am proud to be around to say goodbye to one and welcome the other”, he said, assuring management and staff of the corporation of the Board’s support.
Highpoint of the occasion was the presentation of handover notes to Mallam Kyari as the new GMD and his crowning with the legacy NNPC hat emblazoned with the corporation’s logo by Dr. Baru.
Dr. Baru expressed optimism that Mallam Kyari, as a thoroughbred product of the NNPC system, would deploy his cognate experience, expertise and exposure to deliver greater achievements.
He said that the incoming GMD played critical roles in delivering the various projects that have reformed the corporation within a short period, stressing that Kyari, being part of the processes and vision of the new NNPC, was in a vantage position to perform better.
“We came in at a turbulent time when the country was experiencing low production, low staff morale and high rate of pipeline vandalism. However, we worked had as a team and surmounted the challenges and finished strong. I am therefore, glad that one of our staff with professional competence and experience will be taking over from me”, he said.
Mr Kyari from Borno State, succeeds the incumbent GMD, Maikanti Baru, who is due for retirement from the NNPC next month.
Mr Kyari comes to the job as the 19th GMD of the NNPC with a rich profile of professional and service credentials.
A geologist, Mr Kyari is known in the oil industry as a crude oil marketer with outfield pedigree in petroleum economics and crude oil and gas trading.
With over 32 years of experience in the oil and gas industry, his tour of duty traversed the entire value chain of the petroleum industry.
“Under his watch, the Crude Oil Marketing Division of the NNPC has recorded noticeable transformation in the management and sales of the various Nigeria’s crude oil grades via an infusion of transparency and automation of the processes,” the NNPC said of him in his official profile on its website.
A 1987 Bachelor of Science (B.Sc) degree holder in Geology and Earth Science from the University of Maiduguri, Mr Kyari did his National Youth Service Corp (NYSC) as a Well Site Geologist with the Directorate of Foods, Roads and Rural Infrastructure (DFRRI) between 1987 and 1988.
Between 1988 and 1991, he worked with the Nigerian Geological Survey Agency before joining the NNPC subsidiary, Integrated Data Services Limited (IDSL), where he worked as a Seismic Data Processing Geophysicist in the Data Processing Department.
In 1998, Mr Kyari was appointed the Exploration Geophysicist Production Sharing Contract (PSC) of the National Petroleum Investments Management Services (NAPIMS) until 2004 when he became the Abuja Operations Manager of NAPIMS.
In 2006, he was appointed the Supervisor PSC, Crude Oil Marketing Department (COMD) of the NNPC, from where he rose to the position of Head, and later Manager of Production Contracts Management of the COMD between 2007 and 2014.
Mr Kyari was appointed General Manager Oil Stock Management, COMD where he worked till 2015 before being appointed Group General Manager, COMD and later Nigeria’s National Representative at OPEC.