Facilitate Subsidy Removal, Assent to PIGB, Operators Urge Mele Kyari

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Mele Kolo Kyari,
  • New NNPC boss assumes office today
  • Surpass my achievements, Baru tells successor

Chineme Okafor and Kasim Sumaina in Abuja

As the new Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, officially assumes office today, stakeholders in the oil and gas industry have tasked him to pressurise the federal government to remove fuel subsidy and sign the Petroleum Industry Governance Bill (PIGB) into law. 

This is coming as the outgoing Group Managing Director of the NNPC, Dr. Maikanti Baru, has urged Kyari to exceed the milestones recorded by the corporation under his watch. 

The operators, who expressed confidence in Kyari, whose appointment was announced about a fortnight ago, urged him to run a transparent and proactive corporation, initiate the process of ending the controversial fuel subsidy regime that has remained a drain on the economy and lobby President Muhammadu Buhari’s administration to ensure that the PIGB becomes law.

Chairman of the Petroleum Technology Association of Nigeria (PETAN), Mr. Bank-Anthony Okoroafor, said Kyari’s background as a geologist would be a bonus to the government’s plan to achieve and exceed 40 billion oil barrel reserves and daily production of four million barrels of crude oil.

PETAN represents all Nigerian companies engaged in the petroleum industry.

According to Okoroafor, how the new NNPC boss drives the industry and his vision for the industry would determine if he would actualise the government’s aspirations.

He urged Kyari to, in the first 100 days, make local content a national agenda, get a team to brainstorm on how to use oil and gas as engine for economic transformation of Nigeria.

He also tasked Kyari to accelerate the renewal of soon-to-expire licences for oil blocks and create new concessions for the unallocated 53 Deepwater blocks, since the last bid round was 12 years ago, among others.

He said: “Mele should clear uncertainties around commercial frameworks and make room for attractive fiscals and regulatory regimes to pull investors. The NNPC should approve and escalate to other projects, the proposed framework between itself and operators on Oil Mining Lease (OML)118. Government should speedily sign the PIGB, PIFB (Petroleum Industry Fiscal Bill), PIAB (Petroleum Industry Administration Bill) and the PHICDB (Petroleum Host and Impacted Community Development Bill).”

Also, the Revenue Watch Institute (RWI), which had categorised the NNPC in its publication of National Oil Company Database as one of those National Oil Companies (NOCs) with record challenges of transparency, stressed the need for Kyari to enhance transparency at the corporation.

Also, in their interactions with THISDAY, some experts said they would want Kyari to initiate a see-through process in managing the corporation’s operations.

They advised Kyari to focus on implementing findings of the audit reports of the NEITI, which had severally indicted the NNPC of operational wrongdoings.

According to years of NEITI’s audit reports, the NNPC, over time, has recorded differences in actual volume of crude oil lifted and actual volume of production.

“As head of a NOC with huge influence, Kyari, should also make efforts to present convincing arguments to the national government, President Muhammadu Buhari especially, for the deregulation of Nigeria’s downstream petroleum sector,” an industry source who did not want his name in print added.

Wale Tinubu Seeks End to Subsidy

On his part, the Managing Director of Oando Plc, Mr. Wale Tinubu, who declared that Nigeria spent $5 billion on fuel subsidy last year, called for an end to the policy.

The $5 billion, he said, represented funds that could have been used to finance other critical infrastructure needed by vast majority of the populace.

He, therefore, advocated that all stakeholders must support the deregulation of the oil and gas sector to engender growth.

Tinubu, who said this at a forum in Abuja, urged stakeholders in the petroleum industry to support Kyari.

According to him, other critical sectors of the economy, such as education and health among others, were in need of funding, adding that such amount expended on subsidy should have been directed to other critical sectors or towards infrastructure development.

He said: “The government has chosen to effectively subsidise the price as a social palliative. Not that I support it, but we spent $5 billion last year on subsidy, which was even more than what we spent on education and housing combined.

“At a population growth rate of three per cent, the question is: what is the best – to invest in infrastructure or consumption? There is a big debate that has to be made around this and as stakeholders, we absolutely need to champion that debate with the federal government.

“The politicians want this to continue at all cost, but there is a long-term damage we are doing to our country and industry.

“We need to ensure that these subsidies are altered and the downstream sector needs to be commercialised, the refineries need to function and the pipelines need to function. There is no logic in it transporting our products by the road, which is extremely expensive.”

Surpass My Achievements, Baru Tells Kyari

Meanwhile, Baru has urged Kyari to exceed the milestones recorded by his team.

A statement by NNPC’s Group General Manager, Group Public Affairs, Mr. Ndu Ughamadu, yesterday in Abuja, said Baru gave the charge while receiving Governor Babagana Zulum of Borno State, who led a delegation from the state on a courtesy visit to him.

He expressed optimism that Kyari as a thoroughbred professional and product of the NNPC system, would deploy his cognate experience, expertise and exposure to deliver greater achievements.

Baru said the new NNPC boss played critical roles in delivering various projects that had reformed the corporation within a short period, adding that being part of the corporation’s new vision, Kyari is in a vantage position to perform better.

“We came in at a time when the country was experiencing low production, low staff morale and high rate of pipeline vandalism. However, we worked hard as a team, surmounted the challenges and finished strong.

“I am, therefore, glad that one of us, with professional competence and experience will be taking over from me,” he said.

Zulum congratulated Kyari on his appointment and expressed gratitude to Buhari for finding a son of Borno State worthy of the honour.

He called on Kyari to discharge his duties to the best of his ability without compromising national interest.

The governor appreciated Baru for his mentorship and training that had prepared Kyari for the enviable position in the nation’s largest oil and gas company.

Zulum commended the smooth and unique hand over process, emphasising that the privilege pointed to the integrity of Baru.