- Lists achievements: deregulation, reduction of operational cost by 30 per cent, meeting statutory payments to the federation account
- To appraise dialogue with militants and plug possible gaps
By Chineme Okafor in Abuja
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu yesterday formally handed over the task of managing the Nigerian National Petroleum Corporation (NNPC) to its new Group Managing Director (GMD), Dr. Maikanti Baru, saying he successfully turned around the fortunes of the state oil company in the 11 months he held the post of the GMD.
Kachikwu said in Abuja that when President Muhammadu Buhari appointed him NNPC’s GMD in 2015, he had asked him to reposition the operational direction of the corporation following its reported poor profitability index; loss of business transparency and focus; as well as confidence of Nigerians.
He stated that he had so far changed such ugly narratives about the NNPC and thus turned it into a profit-making entity. The minister added that for the first time in a very long time, NNPC in May 2016 netted a profit margin of N270 million.
He also disclosed that despite renewed hostilities in the Niger Delta and seeming cracks in the federal government’s reported dialogue with militants in the region, the country’s daily crude oil production capacity was still at 1.9 million barrels.
He said he would appraise the government’s dialogue with the militants, and try to plug possible gaps in the process.
The government had on Monday named Baru as a replacement for Kachikwu in the NNPC. Kachikwu who however retained his job as minister, was also appointed chairman of the board of NNPC by the government.
The minister listed some of what he said he achieved in the 11 months to include cutting its operational losses; deregulating the country’s downstream petroleum sector; initiating a creative means of meeting the corporation’s Joint Venture (JV) contributions; as well as meeting its statutory payments to the federation account, amongst others.
He also said Nigeria’s daily fuel consumption has dropped by 30 per cent following his efforts to sanitise the downstream operations of NNPC and the country.
“11 months ago, when the president asked me to take over the mantle of leadership of the NNPC, there was indeed an urgency of now, morale was low, things were haywire, there were lots of issues of transparency on the table. The profit index was very poor and the belief of Nigerians in the functionality and reliability of the NNPC was quite frankly at a questionable level.
“And the president felt the best way to start my career in the public service under him was first to go to NNPC as outsider and try and bring in certain new structures to help the place change its direction and focus.
“Looking back now, I think one must be very grateful to the president not just for the opportunity but for the foresight because I had my own doubts whether I could actually do that given the fact that I was an outsider and this is a very huge institution with over 30-40 years of experience which I was not built into.”
“But he was persistent on that and looking back at what we have accomplished, I well understand now why he is the very wise president of the nation and I thank him very much for the opportunity that he has given me.
“Even when he appointed me minister of state sometime in September, despite all the pressures that he had to quite frankly decouple both positions, understandably, he remained steadfast in feeling that that process should run a course to a point where he is comfortable to decouple it. I think we have gotten to that point and I thank him for that opportunity.
“I have always said it that it is not how long you serve, it’s what impact you make when you served. Public service chair are swivel chairs and they are made swivel for a purpose. So that they rotate and as you go somebody else comes in and continue the contributions that you made.
“For the 11 months that I served, I am most grateful to the president and also to Nigerians for the overwhelming support that I received in the difficult challenges that we had to face,” he stated.
The minister further explained: “In the 11 months, let us just rethink some of the things we have achieved. First, we managed after very great difficulties to restructure the NNPC. It is a very massive restructuring that has been able to set out various parameters of the business as profit focused entities of their own. That was a major massive work.
“We have been able to cut operational cost by 30 per cent and save a massive amount of money for the group.
“We undertook deregulation at the time nobody thought was possible and if there is anything we leave for the industry, it must be the legacy of that deregulation. Today, our fuel consumption has gone down by about 30 percent. We have no queues in the filling stations, we have about one and half months of self-sufficiency. We have strategic reserves that we are putting together.”
Continuing, he said: “We have downstream that is for the first time focused on a very strong P&L and I note with very strong satisfaction that if you compare the April results of downstream group with May results, you will see a massive turnaround from about N19 billion in loss to some level of profits.
“We succeeded in removing subsidy and saving over N1.4 trillion on yearly basis for this country. We have reduced upstream contracting period from average of two and half years to between six and seven months. Thanks to the massive work by NAPIMS.”
Kachikwu described the N217 million profit made by NNPC in its May operations as a massive achievement given that when he took over the corporation’s losses were in excess of N150 billion.
He reiterated his commitment to ensure that Nigeria cuts its petrol importation significantly, saying, “by 2018, 60 per cent of refined products importation will stop and by 2019 we must become a net exporter of refined petroleum products.”
On renewed activities of militants in the Delta as well as its impacts on Nigeria’s crude oil production, Kachikwu said: “We are doing 1.9million barrels. We are working on it (dialogue with militants) and I need to meet with Mr. President and obviously, there’s a lot more engagement that is required.
“There are gaps that seem to have developed and I need to understand what issues warranted that. But we will work towards closing those gaps.”
He also assured that the damaged Forcados terminal will be back on stream by the end of July.
Baru in his response, thanked Kachikwu for recommending him to Buhari for the position.
He assured him that he would work to deepen the on-going reform in the NNPC.
He said he would implement the new business model and grant needed autonomy to the SBUs with ABUs providing relevant directions and control that would ensure their growth and profitability.
He also added that he would continue to explore ways of relieving government from the burden of cash calls obligations as well as address and defray the agreed cash call arrears to the IOCs.
Group Decries Removal of Kachikwu as MD NNPC
An Oil Monitoring group, Niger Delta Indigenous Movement For Radical Change (NDIMRC) yesterday decried the removal of Dr. Ibe Kachikwu as the Managing Director of the Nigerian National Petroleum Corporation (NNPC) at this critical period when peace is required in the Niger Delta region.
The group wondered whether the appointment of the former Group Executive Director, Exploration and Production of the Corporation, Dr Maikanti Kacalla Baru could help in returning the much desired peace into the troubled oil industry at this critical time when the militants were destroying oil facilities.
According to a statement signed by the President of the group, Nelly Emma; Secretary, John Sailor and Public Relations Officer (PRO), Stanley Mukoro, it expressed disappointment with the sudden decision of the President to remove Dr. Kachikwu who had been labouring to calm down the militants for oil exportation to improve.