NNPC: Pathway to Progress, Profitability
The Nigerian National Petroleum Corporation (NNPC), under Mallam Mele Kyari, has put in place far-reaching internal controls cutting its financial losses by a whooping eight hundred billion Naira, writes Danlami Nasir Isah and Eddy Ochigbo
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The Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Malam Mele Kyari, has hinged the improved operations of the corporation on prudence, strategic planning and transparency.
Kyari who was addressing energy correspondents in Abuja recently, disclosed that “the rational expectation is that the NNPC must deliver excellent services to its shareholders and Nigerians”, pointing out that no national company can perform creditably well without prudence and accountability.
“It’s about delivering dividends. Over the years NNPC has not been able to reach its optimum goals. We are always running from one crisis to the other as well as one form of complexity to the other. There is this belief that NNPC is a spoilt organization. Nigerians see us as a representation of corruption”, the GMD explained, maintaining that the non-disclosure disposition to stakeholders as was the case in the past, did not help matters.
He went on: “But when we came on board, we decided to open our books to our stakeholders. We are not angels and we are not saints, but I can assure you that in the day-to-day running of the NNPC we don’t make deliberate mistakes; but we do make mistakes. We open up to our stakeholders in case they want to contribute and help out. What we did when we came in, was to assure Nigerians that we are going to be accountable in our transactions.
“Our vision is that NNPC will become a company of excellence and declare dividends to Nigerians and shareholders. We are optimistic that at the end of 2020, NNPC should be able to declare dividends to Nigerians in spite of the impact of the COVID-19 pandemic”, Kyari said.
He revealed that the NNPC is the only company in Nigeria that publishes its financial position and operational reports on monthly basis. “There’s no company in the country that does that. Our financial and operational reports are published on month by month basis. And we went one more step by publishing the financial statement of 2018 and in it, there are clear indications that there are things we were not doing right. For instance, we lost about N8 billion and we are not afraid to disclose it. We have lost money in our pipeline business and that shouldn’t have happened. And of course, we are spending more money in our business that we shouldn’t be doing. You would also recall that we published our audited financial statement in 2019”, Kyari stated.
“NNPC has never published its audited financial statement in 43 yrs. We came & started doing that & released the 2018 financial statement. We were not afraid of doing that & there were a lot of criticisms that we lost money in refinery operations & pipeline business”.
According to the GMD, the 2019 audited financial statement showed that the corporation has learnt from its mistakes in 2018 and have cut down cost, improved considerably and have become more efficient. “We have cut our financial losses by N800 billion. Also, we have moved away by 97% from our previous losses”, he disclosed, stressing that the feat didn’t come cheap.
“It’s real hard work. We cut down costs and became more efficient thereby making more money. I must confess that I have been around for 29 years and have worked closely with top management of the NNPC for about 15 years. I was aware of the workings of NNPC before I became GMD”, Kyari explained, insisting that the management of NNPC under him, has unfettered operations without any distractions or interference and this, he observed has not happened until the present Buhari-led administration. “This is the only president who has never asked NNPC to do something. Under no circumstances has President Muhammadu Buhari controlled what we want to do. I have the personal privilege of having direct access to the president.
“The privilege we have today in this company of having unfettered control without any distraction/interference to make decisions & be accountable & responsible for our decisions has never happened until this govt”, he added.
On deregulated market environment of the oil and gas sector, the GMD said; “The challenge we had to migrate was that the president was not too comfortable with deregulation because he believes that it would bring pain to the Nigerian people and the only argument we had was that we just don’t have the resources. Again, with the Covid-19 pandemic, we had no option other than to deregulate. I am sure you are aware of the new focus that we have on gas development. Gas is the most resilient source of energy as we go into energy transition. It has shown that it is the only source of energy that survives with very marginal negative. The biggest challenge we have is taking electricity to homes, ndustries, and to the resources that we have to create the energy which the country needs.
“Today for two reasons, we have not been able to get absolute supply of energy. First, our production of electricity is low and secondly, we are not able to transmit to those who need it. That means there are bottlenecks in the transmission and distribution system. But gas does more than that, gas creates jobs, it creates gas-based industries as well as enormous benefits. Everybody knows Nigeria with oil, but Nigeria is actually a gas-producing country”, Kyari reiterated, emphasizing that in all of this, gas utilization would definitely be a game-changer.
The GMD stated that the NNPC would continue to focus on domestic gas supply while strategizing and putting in place gas for export. “Today, we have stranded gas everywhere. The only gas coming into our network is associated gas”, he explained, assuring Nigerians and stakeholders in the oil and gas sector that the corporation is committed to ground-breaking and profitable changes in the sector.
