For Maikanti Baru as GMD, a test of the Peter Principle


with Bisi Daniels

As some people have observed, I am being drawn into writing about the oil and gas industry again. There is always use for every bit of man’s experience which should not go to waste. My contacts are intact, and with my long background in the industry, it is fun writing about the industry which continues to be the backbone of the national economy. The only thing I may not do is to write about ‘Powerful Women in the Oil Industry’ as some people expect.

Deep oil industry sources knew months before President Buhari announced his cabinet that someday, Dr. Maikanti Baru would be the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC). “We knew him, we knew his efficiency level, we knew his achievements, especially the removal of bottlenecks to let things work; and so we didn’t have to be pastors or clerics to know where he was headed,” one of the sources, a CEO of an indigenuous oil firm revealed last week. However, some people in the group nursed the fear that Baru could be a victim of the “Peter Principle” with his enormous skills and experience blunted by administrative work and government politics. In the recent past, the NNPC has had one of the highest CEO turnover in any state oil company. But some six months on, he seems to have anticipated the challenges of the office, including the politics. “I have no problems with all that so long as my conscience continues to be clear. There is so much to be done that there is, in fact, no room for distractions,” he told a source who is his friend.

The Peter Principle

The Peter Principle is described by Wikipedia as “a concept in management theory formulated by Laurence J. Peter in which the selection of a candidate for a position is based on the candidate’s performance in their current role, rather than on abilities relevant to the intended role.” Thus, employees only stop being promoted once they can no longer perform effectively, and “managers rise to the level of their incompetence.” The Peter Principle was first introduced in an article written by Dr. Laurence J. Peter in the January 1967 issue of Esquire magazine. It struck a chord among American office-dwellers. Following the response to the article, Peter, with the help of writer Raymond Hull, wrote the book, The Peter Principle: Why Things Always Go Wrong. The Peter Principle uncovers a real flaw in the structure of hierarchies. Based on this principle, a promotion is deemed a good fit promotion if it is one which involves much of the same skill set with a minimal addition of new skills. And a new position should be declined if it would draw the individual away from his core strengths… Until his appointment, Baru was the Group Executive Director, Exploration & Production of the Corporation, a position key to the growth of the oil and gas industry. In another key role, which fit the exigencies of the times, Baru was the Chairman of the NNPC Anti-Corruption Committee, and he was reported to have relentlessly sensitized staff members on obligations and laws that govern corruption and corrupt practices. But, indeed, apart from his new position, he was a seen-all-done-all in the oil gas industry, serving in various capacities over the years. Baru had worked in various capacities in both the upstream and downstream sectors of the industry, including: Group General Manager of Greenfield Refinery Projects, Managing Director of Hyson, Executive Director of Nigerian Gas Company (NGC), General Manager – Gas Division of NAPIMS, Manager – Operations, Procurement Management Services and Manager – Engineering for National Engineering and Technical Company Limited (NETCO).

During his initial stint with NAPIMS which spanned from July 1993 to July 1999, Baru executed several gas projects which are utilizing billions of standard cubic feet of gas per day. Several other ongoing projects were also conceptualized under his care. He planned the projects that would ensure gas flare-out by 2008 and made huge savings while overseeing the Joint Venture Gas Projects. He was also the NNPC’s Chief Technical Negotiator on the West African Gas Pipeline project from July 1999 to April 2004. It therefore seemed that he took an appointment that called on, not just one skill line, but skills and experience garnered from various sectors of the economy, making the Peter Principle irrelevant in this case. Upon commencing his present engagement, he hit the ground running. Without delay, he reeled out an agenda for all staff members to key into. Addressing staff members, he pledged to work closely with them to find lasting solutions to the challenges facing the industry. The pledge was part of a 16-point agenda he unfolded shortly after assuming office. He also assured the oil workers that he would harness their experience to maximize output under the on-going restructuring exercise, and that regular engagement would be a key success factor for his administration.

The Agenda
• Provide relevant directions and controls to ensure their growth and
• Restore oil and gas production and grow the national reserve portfolio;
• Leverage on equity positions to cause the development of key gas
assets for domestic use and exports;
• Pursue the expansion of gas networks across the country;
• Increase crude oil production of NPDC;
• Review all weak contractual agreements and terminate bad ones as appropriate;
• Create an all-inclusive internal advisory council on security,
comprising representatives from NNPC, the international oil companies,
the Petroleum and Natural Gas Senior Staff Association and National
Union of Petroleum and Natural Gas Workers, and security operatives to
brainstorm and address host community agitations to complement
government security team’s efforts in the Niger Delta region;

• Implement new business models that would grant autonomy required to
empower the strategic business units and authorize  business units
deliver on their mandates;
• Provide relevant directions and controls to ensure their growth and
• Continue exploring ways of relieving government the burden of cash
calls obligation as well as address and defray the agreed cash call
arrears of the IOCs;
• Restore oil and gas production and grow the national reserve portfolio
• Increase crude oil production capacity by the NNPC upstream
subsidiary and the Nigerian Petroleum Development Company (NPDC);
• Review all weak contractual agreements and terminate bad ones as appropriate;
• Leverage on equity positions to cause the development of key gas
assets for both domestic and export;
• Pursue the expansion of gas networks across the country;
• Repair and restore oil and gas pipeline infrastructure and provide
robust security system for both detection and deterrent in conjunction
with the existing security arrangement;
• Improve refining efficiency of the four existing refineries to pave
the way for future expansion;
• Pursue diversification of businesses by refocusing on the
implementation of renewable energy programmes and frontier exploration
• Continue the drive to make the venture businesses profitable and
ensure service delivery;
• Entrench the culture of professionalism by doing the right things at
all times through transparency, accountability, and respect for all;
• Ensure adequate staff welfare and motivation, training and capacity building.

Rating Although industry sources, including the multinationals, continue to rate Baru privately, with some describing him as a quiet and hands-on person, and some asking for more time to observe him because with the new PIB now being considered, the industry has too many legal and political variables to consider is any assessment.. Baru got his first public approval in Kaduna, during a visit to the NNPC facilities in the state last month. He also paid a courtesy call on the State Governor. Mr Nasir El-Rufai commended Baru for his leadership style, saying the corporation was now on the right track. He described the NNPC boss as a man of quality and integrity, saying his appointment was well deserved. He said under Baru’s watch, NNPC has continued to show good results, noting that the corporation remains the most important Federal Government institution which everyone feels part of through its impact on the economy. “I have not been impressed with the NNPC in the past, and that is because of the then political leadership which used the corporation as a conduit, but with Dr Baru at the helm, I believe NNPC is on the right track,” the Governor stated.

Background Born in July 1959, Dr. Baru is a native of Jama’are in Bauchi State, in the North-East geopolitical zone of Nigeria. He grew up in Jos, Plateau State of Nigeria. Baru attended Ahmadu Bello University, Zaria, in Kaduna State of Nigeria, where he obtained Bachelor of Engineering (Mechanical) with first class honors. He also holds a Doctorate of Philosophy in Mechanical engineering. He is a fellow of the Nigerian Society of Engineers (FNSE) and a recipient of the Presidential Merit Award of the Nigerian Society of Chemical Engineers. He is married with children.

Challenges There are some legacy challenges the new helmsman, has to grapple with:

• In line with the mood of the times, there is need for NNPC to demonstrate transparency and accountability. It has continued to publish its accounts and last month, conducted a public opening of bids for the 2017 crude term contracts, where Baru reiterated that in the Corporation there are no hidden transactions.

• While increasing oil exploration across the country to increase reserves, there is need to diversify the industry with increasing attention to gas which is dubbed as the fuel of the moment.

• The need to spruce up the image of the Corporation, recently described as the cesspit of corruption. This will include standing up to politicians who desire to make the Corporation as the ATM of government, as once described by a popular politician.

• Pipeline vandalism and the new wave of Niger Delta crisis, which lacks clear motives; and

• The need for industrial harmony to prevent frequent strike actions and threats. As some analysts have put it, these are long-standing challenges, which require concerted efforts of all stakeholders, but as for the Peter Principle challenge, Baru may have already demonstrated that, with all the experience he has brought to the table, it may not apply to him. “It is a good fit promotion because you don’t find his bundle of experience easily, but of course so much depends on the independence he is given to operate,” the managing director of an IOC says.