Professor Umar Adamu Danbatta
My rejoinder is a write-up to counteract Suleiman A. Suleiman’s critique of the Nigerian National Petroleum Company (NNPC) in the Daily Trust’s Monday column of Mon, 12 Aug 2024, which mainly focused on its historical failures and frequent excuses. As a geologist who has close association with the former NNPC, I acknowledge the concerns raised about the old company. The criticisms of the NNPC are indeed poignant and highlights longstanding issues about the ambiguity surrounding the identity of the old NNPC, and important questions about its organizational structure and performance.
While all these are true due to the complexities of its operations, we must also consider the broader context in which the former corporation is now operating as a company. The narrative of failure ignores to acknowledge the significant recent structural changes and improvements that have occurred over the past few years, with the transformation of the NNPC into the Nigerian National Petroleum Company Limited (NNPCL).
The old NNPC had now transformed into the new NNPCL after the passage of Nigeria’s revolutionary Petroleum Industry Act (PIA) by the Nigerian National Assembly in August 2021, following one of the key initial steps mandated in PIA’s implementation template. The transitioning of the old NNPC (which we all agree must go), into a limited liability company was a major step towards addressing many of the issues previously associated with the former corporation.
The new NNPCL is now a limited company owned by all Nigerians, with a clearer mandate and operational framework designed to enhance transparency and efficiency. It is now like any other limited liability oil company operating in Nigeria (rather than a state-owned and state-funded corporation). This new status allows it to operate more efficiently across the energy sector, focusing on sustainability, efficiency, and resilience.
While the critique of the NNPC’s historical performance is valid, particularly when comparing it to successful national oil companies like Petronas of Malaysia and Petrobras of Brazil, it is essential to recognize the efforts, reforms, and achievements made by the new NNPCL in overcoming its past challenges. Since assuming his new role as the GCEO of the new NNPCL, Mal. Mele Kyari has implemented several reforms and initiatives, with a focus on transforming the corporation into a commercially viable entity, reducing bureaucracy, high corruption risks, and the legacy of inefficiency and mismanagement in the company.
This rejoinder write-up highlights key concerns and developments surrounding the implementation of the Petroleum Industry Act (PIA), and the ongoing restructuring and commercialization efforts the old “NNPC that Must Go” had undergone, to transform into the new NNPCL. The reform efforts by the Mal. Kyari led management within the NNPCL (not NNPC). are promoting significant changes, efficiency, and profitability that are instrumental in maximizing revenue returns for the nation.
The focus should now be on supporting these reforms and holding the company accountable to ensure it fulfills its role effectively and transparently. This is crucial in enhancing the potential for NNPCL to evolve into a more efficient entity, akin to successful counterparts like Petronas and Petrobras, which have thrived despite similar challenges. Once more, while past allegations and issues cannot be overlooked, there are several counterpoints to consider. Moving forward, it’s important to note that the implementation of the PIA is an ongoing process, and its full impact may take time to materialize.
This is the time for all of us to come together and consider the following ten key reforms and initiatives undertaken by the new NNPCL under the leadership of Mal. Mele Kyari:
1) Historical Context and Structural Challenges: Crude oil occurs as a black liquid hydrocarbon deposit in geological formations beneath the Earth’s surface. It is extracted, refined, and separated into numerous products including petrol (gasoline), diesel, kerosene, and chemical reagents that are used to make plastics, pesticides, and pharmaceuticals. Crude oil is a major source of income for the Nigerian economy, and NNPC’s initial mandate was indeed ambitious, aiming to transform Nigeria into a major player in various sectors of the oil industry.
However, the historical context, including political instability, regulatory challenges, and economic mismanagement, significantly impacted its ability to execute these goals effectively. Unlike Petronas and Petrobras, which benefitted from relatively stable political environments and focused strategic investments, the NNPC faced a more turbulent backdrop of problems of context and corruption that hindered its performance. The immediate past management of the then NNPC under Mele Kyari has played a crucial role in the passage and implementation of the Petroleum Industry Bill (PIB) Act, which had led to some changes and improvements.
The main aim of the Petroleum Industry Act (PIA) is to is to transform the Nigerian Oil Gas Industry, while the key objectives are to modernize the regulatory framework, promote transparency, attract investments, and ensure the sustainable development of the oil and gas industry in Nigeria. The passage of the Act represents a watershed moment in the nation’s history, as it has laid down the groundwork for a more transparent, efficient, and competitive petroleum industry that foster an enabling environment for investment, promotion of local content participation, and upholding the highest standards of governance and accountability.
The ACT provides for the establishment of the Nigerian Upstream Petroleum Regulatory Commission, whose role is to regulate and monitor the technical and commercial petroleum operations at the upstream stage. The commission shall have the power to acquire, hold and dispose of property, sue, and be sued in its own name.
The PIA also provides for the establishment of Nigerian Midstream and Downstream Petroleum Regulatory Authority, which has since been constituted. The streamlining of the oil industry regulation into two major aspects of Upstream sector, and Midstream and downstream sector, respectively, has reduced overlapping in the roles of governance. The Fiscal Objective of the Act to provide a framework that will attract investors to the Nigerian Petroleum Industry, expand the revenue base of the Federal Government, simplify the administration of petroleum tax, while ensuring investors get their money’s worth.
2) Addressing Past Challenges: Firstly, it is important to recognize the major challenges that NNPC faces, including sabotage from pipeline vandalism, crude oil theft, deteriorating state of its infrastructure, and investment and exploration issues, especially in areas prone to conflict and unrest. Over the years, managing insecurity in the oil rich region is huge task for all government since returned to democratic governance. The ongoing challenge of protection of assets has long been one of the biggest security challenges for the oil and gas industry.
These issues have undoubtedly impacted the company’s operational efficiency and effectiveness, as well as its ability to deliver value to its customers and shareholders. It is worth noting that while past criticisms and failures are valid, the current management of the NNPCL is focused on addressing these issues. The major struggles are around oil production problems with non-contract disclosures and non-fulfilling of OPEC production quota, which were exacerbated by external factors beyond the NNPC’s control.
The NNPCL’s security surveillance contract with Tantita Security Service Nigeria Ltd. to secure key oil installations and pipelines, is a noteworthy development. This has effectively started stopping all forms of pipeline vandalization, oil theft (now glamourized as illegal oil bunkering), in the Niger Delta. It has also reduced oil theft in the country, thereby boosting crude oil production levels, showcasing a progress in addressing one of the sector’s longstanding challenges of non-reliability and steady flow of crude oil.
However, this has not completely stopped oil theft and vandalization of pipelines. This posed a challenge to the Nigerian authorities to ensure effective and efficient security strategies are provided for long term crude oil flow from main export terminals to global international oil market. For NNPCL to strengthen both domestic and export supply chain ecosystems, it needs to manage an effective and efficient crude oil supply chain.
As such, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (GCEO), Mele Kyari, has on 17th July 2024 held a crucial meeting with the Chief of Defence Staff, Gen. Christopher Musa, and the Inspector-General of Police, Kayode Egbetokun. Ending the menace of oil theft and pipeline vandalism in the Niger Delta within the shortest possible time will shore up crude production and revenues in the country.
As part of this effort, the NNPCL in collaboration with security agencies, has introduced a real-time command and control center to provide surveillance data of all the country’s oil and gas assets in the Niger Delta. It is known as the Central Coordination, Data Integration and Activation Control Room, and is just like the surveillance system Saudi Aramco is using. It is responsible for using video visibility to monitor, locate, and report suspicious activities the country’s Niger Delta pipeline networks, to various security agencies for intervention. The Control Centre put up by NNPCL also has the capability to see and monitor the movement of vessels within Nigeria’s coastal waters in real time.
The office of National Security Adviser should therefore continue to churn out marshal security strategies to curb oil theft, violence, and environmental damage in areas with petroleum prospects. This should include strengthening security system through sustainable national and private maritime security strategies. This will enable NNPCL to change the narrative of crude oil export supply chain to meet international oil market standards, by providing suppliers with long-term visibility of demand, to enable them capture future growth in export supply chain ecosystems and advance localization efforts. This is critical for greatly contributing to NNPCL’s resilience, reliability, and ability to meet evolving needs of its customers.
The company’s recent performance metrics show a commitment to overcoming historical inefficiencies. For example, the NNPCL’s new governance framework includes measures to ensure transparency and accountability, which are intended to mitigate the issues of non-remittance and operational failures. As Nigeria continues to strive for development and global recognition, the government is focused on translating Tinubu’s a ‘Eight-Point Agenda’ into action, with the active engagement of NNPCL. The agenda is an economic revival plan targeted at food security; poverty eradication; growth; job creation; access to capital; inclusion; rule of law; and fighting corruption.
3) Recent Operational Improvements: The NNPCL’s transformation under the Petroleum Industry Act (PIA) marks a critical shift from the past. The new structure has decentralized its operations into distinct upstream and downstream entities, enhancing specialization and operational efficiency. This reorganization addresses many of the systemic issues that plagued the old NNPC structure. For instance, the creation of distinct entities allows for more focused management and accountability in exploration, production, refining, and distribution activities.
NNPCL’s recent achievements include a notable profit declaration, enhanced security measures reducing oil theft, decentralization strategy that optimizes its upstream and downstream activities, improved vessels, and ships management, facilitating access to tankers from domestic and international investors, and huge improvement in crude oil regulation and production. These efforts aim to secure future exploration financing through collected royalties and taxes, addressing Nigeria’s complex energy landscape.
Other monumental achievement of the new NNPCL include:
- The acquisition of OVH Energy in 2022, which add to its assets a reception jetty of 240,000MT monthly capacity, 8 LPG Plants, 3 Lubes Blending Plants, 3 Aviation Depots, and 12 warehouses. This has boosted the profit margin of one of its subsidiaries, NNPC Retail, which has jumped astronomically.
- Addition of Oando’s 380 fueling stations to existing NNPC’s stations, leveraging Oando’s coverage across Africa to become the largest leading energy company in Africa. Through the deal, NNPC The acquisition, under the leadership of the GCEO, Mele Kyari, shows his vision has transformed the company to a force to be reckoned with in the global energy market.
- The acquisition of OVH Energy by the Nigerian National Petroleum Company Limited.
- Securing a $7bn fresh investments from India for Nigeria’s petrochemical industry In September 2022, NNPCL
- Sealing a deal with five National Oil Companies on the $25bn Nigeria-Morocco Gas Pipeline Project. The MoUs were successively signed between the NNPCL on one hand, and i) the Office National des Hydrocarbures et des Mines (ONHYM) of Morocco, ii) the Societe Nationale des Operations Petrolieres of Cote d’Ivoire (PETROCI), iii) the National Oil Company of Liberia (NOCAL), iv) the Societe Nationale des Hydrocarbures of Benin (SNH-Benin), and v) the Societe Nationale des Petroles of the Republic of Guinea (SONAP), on the other hand.
4) Operational Advances: Nigeria’s major challenges is in crude oil export which remains around the ownership of export terminals, which are either in the hands of Joint venture (JV) and production sharing (PSC). However, the NNPCL has made strides in improving its operational performance and has recently reported increased production levels. The company has discovered hydrocarbon deposits in commercial quantity in OPL 809 and 810 in Kolmani River II, straddling Bauchi and Gombe States. The project lies in the inland Gongola Basin of the Upper Benue Trough, in the Northeast. It is seen as one of the most massive projects as
The Kolmani Oil Field is estimated to have a reserve of about one billion barrels of crude oil, and the discovery can lead to an increased foreign investment and employment in the zone. The flag-off of the Kolmani Integrated Development Project in Bauchi State in November 2022, has culminated into a landmark achievement for NNPCL at its upstream sector. It marked the first ever commencement of effort to commercially exploit oil in the Northern part of Nigeria.
The resolution of the disputes around OML 118, a deep off-shore oil block, by NNPCL lead to the renewal of that acreage plus the prospect of a new $10 billion investment in the development of the Bonga South-east Field to boost the nation’s oil reserves and production. The company signed a series of agreements with Shell Nigeria Exploration and Production Company (SNEPCO) and other Production Sharing Companies (PSC) partners, in May 2021.
Another achievement of the new NNPCL is resolution of a 1993 Production Sharing Contracts (PSC) dispute with its partners, China National Offshore Oil Company (CNOOC) and South Atlantic Petroleum (SAPETROL). This has settled all outstanding issues surrounding the development of Oil Mining Lease (OML) 130, which holds over 90% of our Deepwater production. This helped pave the way for unlocking over 7 Billion barrels of oil, and 20Tcf of gas reserves, which translated into a potential investment of up to US$40Bn over the next five (5) years, and at the same time relieved NNPCL of almost US$10bn in contingent liabilities.
The recent institutionalization of recruitment processes by NNPCL is in the right direction but it might be the reason why some people were sponsored to sabotage the process. There is a strong need to train the new staff in energy studies through NNPC Academy, working together with Centre for Inland Basins Studies (CIBS), Ahmadu Bello University Zaria, and other institutions like Petroleum studies, Effurun Delta.
5) Revenue Collection and Utilization: The Nigerian National Petroleum Company (NNPC) Limited has revealed that Nigeria is experiencing significant economic losses due to the issue of illegal oil connections. On average, the country loses a substantial $7.2 million every month as a result of this unlawful activity. The new NNPCL has implemented various revenue enhancement strategies to enhance revenue generation by exploring new business opportunities, optimizing crude oil production and sales, and improving the efficiency of the corporation’s downstream operations.
While allegations of non-remittance of oil revenues persist, the recent instituted postPetroleum Industry Act (PIA) reforms emphasize greater accountability and financial transparency. Notably, many of the allegations of non-remittance stem from misunderstandings regarding operational expenditures and subsidies. The royalties and taxes collected by the NNPCL are essential for financing future exploration and refining efforts, which is critical in enhancing the country’s energy security and economic stability.
For instance, former CBN Governor Sanusi Lamido Sanusi’s claims have been discredited by multiple audits, including one by PricewaterhouseCoopers, which found no wrongdoing by NNPCL. It is worth noting that “accusations and allegations are not facts” as stated by the critique, but the NNPCL’s transition to a limited company has enhanced accountability, with a commitment to transparency in its financial dealings. Another top priority strategy which the Mele Kyari led NNPCL management has focused on is cost optimization measures.
The company has implemented initiatives such as the adoption of technology, improved contract management, and the identification and elimination of wasteful practices, improving operational efficiencies, and adopting technology-driven solutions to reduce costs. These efforts have helped instilled discipline in NNPCL accountability and improved the financial performance of the company.
NNPCL recently declared a profit of N3.297 trillion for the financial year ending December 2023, and had announced a final dividend of N2.1 trillion for the year. This represents a significant increase of 28% from the N2.548 trillion profit recorded by the company in 2022. The declared 2023 profit is the highest ever recorded in the company’s 46-year history. It is a remarkable financial performance which has been attributed to strategic management and operational efficiency, even in the face of economic and operational challenges.
For the first time, the National Extractive Industries Transparency Initiative (NEITI) has recently made favorable remarks about the NNPCL’s efforts in improving its financial practices and reporting, confirming a positive shift in its financial health.
6) Refinery Rehabilitation and Fuel Scarcity: The claim that the NNPC does not produce oil and is content with excuses, overlooks recent efforts to address the issues that have severely impacted the operational efficiency of Nigeria’s refineries. These issues include pipeline vandalism, theft, and inadequate maintenance. The NNPCL, the successor to the NNPC, has initiated substantial reforms aimed at refurbishing and modernizing refineries. The ongoing efforts include partnerships with international firms to enhance capacity and efficiency, which are critical for reducing Nigeria’s dependency on imported refined products.
NNPCL has prioritized the rehabilitation and revamping of Nigeria’s refineries and has engaged in significant projects to refurbish and upgrade its refineries. This is to improve their operational efficiency and reduce the country’s dependence on imported petroleum products. This includes securing partnerships and funding for the rehabilitation projects and implementing a phased approach to bring the Port Harcourt, Warri, and Kaduna refineries back to full capacity operations.
The $20 billion Dangote Oil Refinery, which is a 650,000 barrels-per-day facility represents a new phase in Nigeria’s petroleum sector, as it is expected to significantly improve Nigeria’s refining capacity and reduce dependency on imported refined products. The new refinery will end the practice of exporting crude petroleum and importing refined petroleum products by Nigeria, which a deep commitment to fostering national growth, supporting local industries, and ensuring that the wealth generated from our natural resources benefits our economy directly.
The Federal Executive Council (FEC) under the leadership of President Tinubu has recently given an express approval of the sale of the 450,000 barrels of crude oil meant for domestic consumption to indigenous refineries in Naira, using the Dangote refinery as a pilot. Allowing transactions in our local currency is a strategic move that will not only strengthens the Naira but also reduces our dependency on foreign exchange. The game-changing intervention will eliminate the need for international letters of credit and can save the country up to $12 billion in foreign reserves that were previously allocated for importing refined fuel.
Other significant benefits include increased efficiency within our local refineries, boosting domestic production, and making production more affordable, sustainable, and qualitative. This will likely lead to creation of more jobs through local value addition, and a more consistent and affordable supply of refined petroleum products for the good of the country. The commitment of NNPCL to supply four cargoes of crude oil to the Dangote Refinery at the moment, is milestone in our nation’s journey towards economic self-sufficiency and stability.
7) Petrochemical and Gas Development: The petrochemical industry in Nigeria plays a significant role in the country’s economy, leveraging its substantial oil and gas reserves. It is an integral part of the Exploration and Production (E&P) oil and gas sector. The lack of development in this sector can be attributed to a combination of factors, including inadequate investment, bureaucratic hurdles, and inconsistent policies. However, the establishment of specialized industrial zones and partnerships with international firms are part of the ongoing efforts to stimulate growth in the petrochemical sector to fully utilize its derivatives and by products.
The petrochemical industry supports various sectors by providing raw materials for plastics, fertilizers, bitumen, gas, chemicals, industrial and textile propylene, and other products. The key players in the industry include the NNPCL, Indorama Eleme Petrochemicals (an Indian conglomerate), and Dangote Petrochemicals. These companies engage in the production of various petrochemical products including ethylene, propylene, and polyethylene. The gesture to sell crude oil to Dangote Refinery and other upcoming refineries in Naira will enable the growth of related industries using raw materials from the refineries
In the near future, the new NNPC will exploit to the fullest “the gas, refining, petrochemicals, agro-chemicals, and pharmaceuticals value chain of oil production that will turn Nigeria into the continent’s hub in the industry across all subsectors”, as quoted from the critique. This will key into the 2050 Nigeria’s industrial strategy to make NNPCL an international oil company of repute.
The Mal. Mele Kyari led NNPCL has also placed a strong emphasis on gas development and utilization in Nigeria. It has initiated efforts to increase domestic gas supply, promote gas-based industries, and stimulate economic growth through gas monetization projects. The NNPC Limited remains highly committed towards the ongoing implementation of the Nigerian Gas Master Plan and the development of gas infrastructure across the country.
This includes the delivery of strategic National infrastructure projects through responsive project delivery, active collaboration with Government Security Agencies and Communities as well as deployment of Technology in the form of Human and Technical Intelligence for Surveillance along the entire Right of Way.
In the area of gas infrastructure, NNPCL is committed to the timely delivery of major gas pipeline infrastructure projects including the Abuja-Kaduna-Kano gas pipeline (AKK) and the $25 billion Nigeria-Morocco gas pipeline, amongst others. It is working hard to enable the country realize the aspiration of timely delivering of the Ajaokuta-Kaduna- Kano (AKK), Gas Pipeline, which is an integral part of the Trans-Nigeria Gas Pipeline (TNGP), with a capacity to transport about 2.2 billion cubic feet of gas per day. The project will boost the nation’s socio-economic growth, by enabling two billion standard cubic feet of natural gas to be transported daily to power plants in Abuja, Kaduna, Kano, and various gas-based industries.
The planned Nigeria-Morocco and the Trans-Sahara Gas Pipelines will connect West African countries to deliver natural gas to the international markets. Once completed, the projects will tackle energy poverty that has been limiting the potential of the African continent for industrialization, boost the monetization of the natural gas resources of the affected African countries, and offer new alternative gas export routes to Europe. These projects not only create employment opportunities but are vital for the country’s energy security and the overall development of the West African economy.
NNPCL is also playing a leading role in the realisation of the Federal Government’s National Gas Expansion Programme, which seeks to deepen natural gas utilisation as an alternative transportation fuel, and an important feedstock to support power generation and gas-based industries. As part of NNPCL’s commitment to reduce carbon footprint and provide cheaper alternative fuel to motorists, it entered into partnership with NIPCO Gas Limited, to develop Compressed Natural Gas stations across the country. The initiative is in addition to the phased deployment of 56 CNG stations planned by NNPC Retail across the country.
For the gas export market, NNPCL is also making progress on the on-going NLNG Train 7 that will expand Nigeria’s LNG production capacity from 22mpta about 30 million tons per annum (30 MTPA). It is also deploying carbon-reduction initiatives to gradually decarbonise its operations and improve its compliances with global emission reduction, as energy security and achieving net-zero emissions goals are the two of the most pressing challenges of this era, globally.
These include efforts towards the creation of an international market for fossil energy that minimise gas flaring, methane, and CO2 emissions across the value chain to the fullest extent practicable. Accordingly, Nigeria has become the first African country to regulate methane emissions from its oil and gas sector in 2022, highlighting the Global Methane Pledge (GMP) goal of cutting anthropogenic methane emissions by 30 per cent by 2030.
8) Corporate Social Responsibility (CSR) Initiatives: It is worth noting that NNPC has a long history of corporate social responsibility (CSR) initiatives, even predating the passage of the Petroleum Industry Bill (PIB) Act. Besides their core competences which is exploring, producing, and processing hydrocarbons, corporate social responsibility (CSR) is considered very important in the oil and gas industry.
As the custodian of Nigeria’s vast oil and gas resources, giving back to the society has become part of formal and informal aspects of NNPCL’s operations. These CSR efforts have included projects focused on education, infrastructure development, healthcare, environmental sustainability, and socio-economic empowerment, among others.
Some of the key areas where NNPC focuses its CSR activities include:
- Education (supporting educational programs, scholarships, and skill development, as well as promoting STEM [Science, Technology, Engineering, and Mathematics] education).
- Infrastructure Development (supports the construction and maintenance of roads, bridges, and other critical infrastructure, as well as investing in community development projects that provide access to clean water, electricity, and sanitation facilities).
- Healthcare (provides medical supplies, equipment, and healthcare facilities, as well as sponsoring healthcare programs addressing prevalent diseases, promoting maternal and child healthcare, and supporting immunization campaigns).
- Environmental Sustainability (invests in renewable energy projects, promotes environmental awareness, and engages in initiatives aimed at reducing carbon emissions and protecting biodiversity).
- Socio-economic Empowerment (promote socio-economic development, create opportunities for employment and capacity building, supports entrepreneurship and vocational training programs, and collaborates with local communities to enhance their economic well-being).
Additionally, NNPC has been actively involved in important infrastructure projects such as the construction of the Centre for Inland Basins Studies at Ahmadu Bello University Zaria and sponsoring of a Train-The-Trainer workshop for selected geoscience lecturers from all the six-geopolitical zones of the country, which are vital for the country’s energy security and economic growth.
9) Transparency and Accountability: The new NNPCL has prioritized transparency and accountability within the NNPC. It has introduced measures to enhance governance, promote open communication, and ensure that the company operates in line with international best practices. The current operational template of NNPCL strictly operates under three principles of profitability, energy transition, and sustainability drive for its survival. This has been strictly exhibited and adhered to through deeply innovative commitment to the highest standards of transparency and global best practices in all its activities, including increased transparency in contract awards and procurement processes.
For comparative performance, while Petronas and Petrobras have successfully expanded internationally, it is important to consider the unique challenges faced by Nigeria. The former NNPC’s historical performance cannot be directly equated with these companies without accounting for differences in their operational environments and strategic decisions. However, the NNPCL is now working towards adopting best practices and enhancing its global competitiveness through modernization and strategic partnerships.
Since the PIA came on board, the NNPCL under the leadership of Kyari, has unfolded his Transparency, Accountability and Performance Excellence (TAPE) agenda, a five- step strategic roadmap for NNPC’s attainment of efficiency and global excellence. It is using TAPE to turn around the company and make it competitive by diversifying the operations of the company and its subsidiaries. NNPCL has also taken a number of measures to strengthen its revenue base through implementing the transformative TAPE agenda.
10) Strategic Focus: The NNPCL’s new strategic focus includes stakeholder engagement, implementation of the PIA, improving exploration and production technologies through collaboration and partnerships, increasing its refining capacity, reviving the petrochemical industry to leverage its potential for industrial development., and energy transition advocacy. These are aimed at ensuring long-term sustainability and reducing reliance on external companies for core functions.
Since assuming his role as GCEO, Mal. Mele Kyari led NNPCL has made some initial progress with the implementation of the PIA, but the true impact of the Act would be realized through effective implementation strategies. We therefore expect full implementation to continue, given the widespread and profound changes introduced by the PIA.
NNPCL has actively sought collaboration and partnerships with local and international stakeholders to drive the growth and development of the Nigerian oil and gas sector. This includes collaborations with host communities, industry associations, government, industry players, and international partners, to emphasize the importance of the PIA in reforming and revitalizing Nigeria’s oil and gas sector.
It has also actively engaged with international oil companies, financial institutions, and technology providers to leverage expertise, attract investments, promote knowledge transfer, while emphasizing the importance of collaboration, dialogue, and sustainable development in the oil and gas sector. This has helped to build trust, foster positive relationships, and address key challenges facing the industry.
Due to the energy crisis which has engulfed Nigeria for almost two decades, stagnating sustainable economic growth, progress, and development, the new NNPCL has key in into the issue of Energy-Mix Advocacy. It is advocating for the use of renewable energy sources to provide adequate supply of energy to Nigerians, due to lack of reliable and affordable alternative power options in the country. This has a great potential to produce power from a mix of hydropower, solar, wind, geothermal, and especially natural-gas-fueled thermal power, as a sustainable energy alternative for Nigerians.
The renewable energy options are sustainable, as for instance they are based on natural elements such as solar, wind and biomass that are reliable sources of green energy that don’t emit harmful toxins which reduces the amount of air pollution. From an economic point of view, to solve Nigeria’s basic electricity problem by implementing the country’s renewable energy target will have significant costs. These can partly be offset by selling carbon credits according to the rules of the ‘Clean Development Mechanism’ agreed some 10 years ago, which will result in indirect health benefits.
Nigeria could benefit from the targeted interventions that would reduce the local air pollution and help the country to tackle greenhouse gas emissions. Many factors that need to be considered and appropriately addressed in the shift to its sustainable energy future are examined in this article. These include a full exploitation and promotion of renewable energy resources, energy efficiency practices, as well as the application of energy conservation measures in various sectors such as in the construction of industrial, residential, and office buildings, in transportation, etc.
In the spirit of responsible and sustainable business practices, the new NNPC has consistently emphasized the importance of innovative strategies, reforms, and groundbreaking initiatives, and their ability to balance short-term gains with long-term sustainability. These reforms and initiatives are aimed at transforming the new NNPC into a commercially viable and globally competitive entity, while ensuring the sustainable development of Nigeria’s oil and gas industry.
It’s important to consider the positive strides made by the current company which are significant. The remarkable strides made in the new NNPCL cut across human capacity development, gas development, refinery rehabilitation, and initiatives to support the downstream sector. These are significant steps towards transforming Nigeria’s oil and gas sector and ensuring its long-term sustainability. It is an opportunity to monetize Nigeria’s abundant hydrocarbon resources through expansion of access to energy to support economic growth, industrialization, and job creation across the African continent and beyond.
Current key challenges before the new NNPCL include establishing an innovative mechanism to: i) fund petroleum host communities’ directly through trust funds; ii) recruit and train relevant technical staff at all cadres of the NNPCL, iii) encourage local content/backward integration in the industry to enable our citizens to manage the industry to conserve foreign exchange; iv) minimize environmental degradation; and v) improve transparency and accountability in the oil and gas sector, which will create a conducive business environment that will enhance the mutual benefit of petroleum operations in Nigeria.
It is crucial to note that NNPCL is addressing these challenges through a holistic approach, considering not only the economic aspects but also the broader social and environmental impacts of the company’s operations. However, a few cross-cutting questions to ask at this point are:
- Why are some mischievous retired senior and management staff of the former NNPC, hirelings, and idle lawyers conniving with oil thieves to attack a highly proactive Kyari’s led NNPCL management team?
- Why are these syndicates of purveyors of fake news and their paymasters (who are not at ease with the ongoing reforms in the oil and gas sector), openly opposed to the transparency in exposing illegal oil refineries run by big thieves in the country.
- Why are the oil cabals secretly working against the success of the new NNPCL (in which all Nigerians are now equal stakeholders).
- Could all these be because of the recent transparent recruitment exercise the new NNPCL has embarked, or could it be they want to continue using their antics to scam and skim the system?
In conclusion, the old NNPC has faced significant challenges, but recent reforms, strategic initiatives, and operational improvements under the new NNPCL, represent a significant departure from past practices. They are aimed at addressing past shortcomings, which include sabotage, oil theft, and operational inefficiencies. The current focus on decentralization, revenue reinvestment, and enhanced operational efficiency indicates a deliberate effort to overcome these past failures and build a more effective and accountable organization. They are part of a broader strategy to revitalize Nigeria’s oil and gas sector and enhance its role in the global industry.
Professor Umar Adamu Danbatta is the pioneer and current Director of Centre for Inland Basins Studies (CIBS), Phase II Site, Ahmadu Bello University, Zaria.
