The appearance of the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mr Mele Kyari at the two Chambers of the National Assembly, and the assurances given by the Senate President, Senator Godswill Akpabio; the Speaker of House of Representatives, Tajudeen Abbas; and other lawmakers of the 10th National Assembly to support the programmes and initiative being implemented by the national oil company to guarantee energy security is a confirmation that indeed, the NNPC Limited is doing well.
Kyari had on Wednesday led the management of the NNPC Limited on a visit to the leadership of the Senate where he met with Akpabio, the Deputy Senate President, Senator Barau Jibrin and the Senate Majority Leader, Senator Opeyemi Bamidele among other officer of the upper chamber.
He also did a similar visit to the House of Reps where he met with the Speaker.
The visits to the National Assembly leadership is coming at a time when the NNPC Limited is implementing various initiatives that will boost crude oil production, guarantee energy security, reduce carbon emission, and get the refineries back on stream among others.
Akpabio, who presided over the meeting got a first-hand information from the GCEO on what the NNPC has been doing to guarantee energy security for Nigeria in line with the provisions of the Petroleum Industry Act.
Speaking during the meeting, Kyari started by allaying fears of Nigerians stating that the Company has already made a robust plan for the supply of petroleum products especially Premium Motor Spirit (PMS), also known as petrol, sufficient enough to last beyond the ember months and the new year festivities.
This assurance, coming from the NNPC Boss himself is a huge relief for Nigerians as there had been fears in some quarters that the country may experience another round of petrol scarcity as the yuletide season approaches. By the creation of the National Assembly, NNPC Limited is saddled with the responsibility of guaranteeing Nigeria’s energy security which is critical to national security.
It is in line with this responsibility to guarantee energy security that the NNPC Limited has made a robust plan for the forthcoming end of the year festivities and beyond.
“We do not see any shortages in the petroleum products supply for the period.” the GCEO added.
The National Assembly should be lauded for its critical role played in the enactment of the Petroleum Industry Act (PIA) 2021 because this singular legislative endeavour had given birth to a new commercially-oriented National Oil Company (NOC) that is governed by the Company & Allied Matters Act (CAMA) principles.
With the passage of the PIA 2021, NNPC Limited’s profitability margins have significantly risen, growing from a loss position of N803bn in 2018 to a profit position of N674bn in 2021.
It was Kyari’s magic wand that played out at that time making the corporation which it was known then to reduce its losses from N803bn in 2018 to N1.7bn in 2019, and the eventual declaration of a net profit in 2020. By fiscal 2021, the corporation’s profit grew to N674bn and before this period, the NNPC has been a loss-making entity, renowned for anomalies, undue political interference, and shades of burden.
Kyari have credence to this when he told the Senate leadership that the NNPC Limited has become so profitable as a commercial entity that the National Oil Company is currently targeting a profit increase of N2trn when the 2022 Audited Financial Statements (AFS) are released.
He said currently, the NNPC Ltd is involved in the entire value-chain of the entire oil and gas business and controls over 30 per cent of the nation’s petroleum retail market.
In September last year, the NNPCL sealed the acquisition of OVH Energy making it to add to its assets reception jetty (ASPM) with 240,000MT monthly capacity, 8 LPG Plants, 3 Lubes Blending Plants, 3 Aviation Depots, and 12 warehouses.
Also, Oando’s 380 fueling stations have been added to NNPC’s existing stations making it the largest in Africa. Through the deal, NNPC is leveraging on Oando’s coverage across Africa to become a leading energy company.
The acquisition of OVH Energy in 2022 by the NNPC Limited has boosted the profitability of one of its subsidiaries, NNPC Retail to N18.4bn in the first three months of this year. The acquisition, under the leadership of Kyari, shows his vision to make NNPC a force in the global energy market.
While identifying crude oil theft and pipeline vandalism as major challenges to the Company’s business, Kyari told Akpabio, Abbas and the lawmakers that the recent collaboration with the nation’s security services as well as third-party security contractors have been yielding results, mostly in the area of increased crude oil production. With oil theft and pipeline vandalism overwhelming Nigeria’s oil business in recent past, the NNPC Limited had adopted the Saudi Aramco’s model of using video surveillance to monitor its pipelines carrying crude oil from wells to flow stations in the Niger Delta.
The NNPC Limited in collaboration with security agencies have also put up a control centre to provide surveillance of all the country’s oil and gas assets in the Niger Delta. The surveillance system is known as the Central Coordination, Data Integration and Activation Control Room. Just like the Saudi Aramco, the NNPC Data Control Centre uses video visibility to monitor the country’s Niger Delta pipeline networks, where more than 90 percent of the country’s crude is explored.
Through the Data Control Centre, the NNPC has the capability to see and monitor the movement of vessels in the coast of Nigeria’s territorial waters in real time.
So far, over 22 million litres of stolen crude have been recovered through intelligence provided by the Data Centre.
Similarly, over 22 million litres of Diesel, 0.15 million litres of Premium Motor Spirit, and 0.76 million litres of kerosene have also been recovered from criminals.
Through the operation, many suspects have been arrested while vehicles, speed boats, wooden boats, trucks have been seized and destroyed. Other items recovered are metal tanks, ovens, dugout pits, reservoirs and cooking pots have been destroyed.
Beyond arresting crude oil thieves and shutting down illegal refineries, the NNPC Limited under the leadership of Kyari is expanding the frontiers for crude oil production. At the meeting, the GCEO shed more light on efforts to shore up crude oil production. He said the NNPC Limited is investing in several gas and power projects across the country, aimed at supporting the Federal Government’s power generation and industrialisation aspirations.
To demonstrate this commitment to transforming the Nigeria’s power sector, the NNPC spearheaded by Kyari entered into a turnkey Engineering, Procurement and Construction (EPC) contract with China Machinery Engineering Corporation (CMEC) to construct the Gwagwalada Independent Power Plant project.
The project which was flagged-off in August by President Bola Tinubu has been described as a game-changer in Nigeria’s power sector. It is a 1,350MW Combined Cycle Power Plant with auxiliaries and Balance of Plant located on 547 hectares of land already acquired at Gwagwalada, in the Federal Capital Territory (FCT), Abuja.
The project is expected to generate between $700m and $800m annually within the first ten years of operations. The GIPP was necessitated by the need for delivering gas towards additional power generation capacity in Nigeria. Under the plan, gas supply to the Plant will be through the Ajaokuta- Kaduna-Kano (AKK) Gas Pipeline Project which is currently at its advanced stages of construction.
The GIPP project consists up of three power train blocks of 450MW each. Each block will include two General Electric (GE) gas turbine generators, two heat recovery steam generators (HRSG), one steam turbine electric generator, one direct air-cooling condenser, balance of plant equipment and a black start diesel generator.
The NNPC Limited Boss also told the lawmakers that the Company is working assiduously to revamp local refining of petroleum products and collaborating with indigenous refiners to ensure Nigeria becomes a net exporter of petroleum products.
Kyari used the occasion of the meeting to inform the lawmakers that all refineries will become fully operational and Nigeria will become a net exporter of petroleum products by the end of 2024.
Specifically, he said that payment of subsidy was responsible for inactive refinery activities in Nigeria over the years saying that the removal of subsidy is already attracting a lot of private sector investments.
The GCEO said, “I can confirm to you that by the end of December latest, we will start the Port Harcourt refinery; early in the first quarter of 2024, we will start the Warri refinery and by the end of 2024, Kaduna refinery will come into operation.
“This is the commitment we are giving today and you can hold us accountable on this; in 2024, many of the initiatives including the rehabilitation of our refineries and also the efforts of small scale refiners, and the upcoming startup of the Dangote refinery, will make Nigeria a next exporter of petroleum products in 2024.
“We will no longer be talking about fuel importation by the end 2024, I am very optimistic that this will crystallise.”
He said that by the end of 2023, the expected government revenue from the company is N4.5trn saying that NNPCL is returning value to shareholders in line with the Petroleum Industry Act.
In his response, the Senate President Godswill Akpabio assured the GCEO and other management of the NNPC Limited of the 10th Senate’s support, saying that the Nigerian Senate appreciates the Kyari-led management for its commitment to ensure robust petroleum products supply during the yuletide period and also emplace the NNPC Ltd on the path of profitability.
“Nigerians always want to hear good news. We are glad that you have made robust plans to provide sufficient products supply this coming festive period and beyond,” Akpabio stated.
The operation of the refinery will cause a multiplier effect on Nigeria’s economy, in line with this administration’s ‘Renewed Hope Agenda.’
This fact was reinforced by Akpabio when he said, “The smallest one that may look ordinary but it affects the Nigerian economy is the elimination of fuel queues in the country.
“The Senate is appreciative of your effort and would partner with you in all endeavours especially in terms of our various legislations to smoothen the ease of doing business in the oil sector and also to assist you to improve in your performance.”
The Speaker of the House of Representatives also commended the on-going reforms at the NNPC) Limited, saying that the legislature is very pleased with the company’s growth from a loss-making company into a profit-making commercial entity.
As a critical stakeholder in Nigeria’s economy, Abbas said that it is imperative for all arms of government to support the Company to enable it deliver on its mandate.
“When we discuss the Nigerian economy, we must talk about the NNPC as a dominant force. We are delighted that the ongoing reforms in NNPC Ltd have started yielding fruits. It is pleasing to hear that you have moved from a loss-making entity to a profit-making one. We urge you to sustain these reforms,” the Speaker stated.
The acknowledgement of the achievements of the NNPC under Kyari by the parliament and the commendations that has followed is indeed a confirmation of the confidence which President Tinubu has on the leadership capacity of the NNPC GCEO in supporting his “Renewed Hope Agenda”
Onuba, a Chartered Accountant, wrote in from Abuja