The Nigeria National Petroleum Corporation (NNPC) has continued to receive torrent of commendations from the Senate and various organisations on the various gas development projects it has undertaken, especially the Ajaokuta- Kaduna- Kano (AKK) gas pipeline project.
The Upper legislative house has also applauded the Corporation under the leadership of Mallam Mele Kyari for publishing the 2018 and 2019 Audited Financial Statements and reduction of losses by over 95 per cent.
The Senate Committee on Gas gave the commendation during the 2021 Budget Defense and Performance Appraisal meeting with officials of the Corporation at the National Assembly Complex.
Specifically, Chairman of the Committee, Senator James Manager, expressed satisfaction with the various gas development projects embarked upon by the NNPC under Kyari’s watch despite the huge impact of COVID-19 on the oil and gas industry, saying: “We are proud of the AKK and some of your other projects”.
Manager said the interface between the committee and the NNPC would have been more frequent but for the lockdown due to the Covid-19 pandemic. He seized the opportunity to reassure the Corporation that his committee would undertake an oversight visit to the projects for proper assessment soon.
On his part, a member of the Committee, who is also the immediate past Chairman of the Committee, Senator Albert Akpan Bassey, said that the NNPC under Kyari’s leadership, has taken the Corporation to a new height by publishing the 2018 and 2019 Audited Financial Statements and for reducing losses by over 95 per cent.
“I want to commend the team led by the present GMD, a team of dedicated and passionate Nigerians. If they can reduce losses drastically within such a short time, I am sure the next report will reveal huge profit to the country. We must give them our support and cooperation,” he stated.
Speaking earlier during a presentation, the Group Managing Director of the NNPC, Mallam Mele Kyari, represented by the Chief Operating Officer, Gas and Power, Engr. Yusuf Usman, attributed the success of the Corporation in the gas sector to the support and cooperation of the Committee and the entire legislature.
He said gas supply to power has improved significantly, which was evident in the improved power supply currently being witnessed in the country.
“We have significant gas in the network currently, but the challenge however, is transmission,” the COO stated.
On the AKK pipeline project, Usman told the lawmakers that it was designed to supply 2billion cubic feet of gas per day (2bcfd), stressing that it would be the primary source of gas for the power plants currently being developed in Abuja, Kaduna and Kano.
The AKK gas pipeline project, a component of the Nigerian Gas Master Plan, which was approved by the Nigeria Federal Executive Council in 2008, was stalled owing to the inability of the contractors to progress financing.
But shortly after assuming office, Kyari approved the renegotiation of the contract, resulting in further cut of $300million of the contract value.
Kyari’s resilience to deliver on the project despite the COVID-19 pandemic brought the project on track leading to the award of the contract at a competitive price and the eventual flag off of construction in June 2020.
Audited Financial Statements
The GMD had promised to sustain the publication of the Corporation’s Audited Financial Statement as part of efforts to deepen transparency and accountability and keep stakeholders abreast of NNPC operations.
The 2019 Audited Financial Statement, which was concluded five months after the release of the 2018 Audited Financial Statement revealed a 99.7% reduction in its loss profile from ₦803bn recorded in 2018 to ₦1.7bn in 2019.
The Financial Statement showed that general administrative expenses also witnessed a 22per cent reduction from the ₦894bn recorded in 2018 to ₦696bn in 2019.
Highlights of the 2019 financial statement by the NNPC’s Chief Financial Officer (CFO), Mr. Umar Ajiya showed that majority of the subsidiaries posted improved performance namely, the Nigerian Petroleum Development Company Limited (NPDC) which recorded ₦479billion profit in 2019 compared to ₦179Billion in 2018 representing 167% increase; the Integrated Data Sciences Limited (IDSL) recorded ₦23billion profit in 2019 compared to ₦154million in 2018 representing 14966% increase; the Petroleum Products Marketing Company (PPMC) recorded ₦14.2billion profit in 2019 compared to ₦9.3billion in 2018 representing 52% increase; while the Refineries have maintained the same level of losses as in 2018 but which will reduce significantly in 2020 due to cost optimization drive.
The CFO explained that the improved performance in the 2019 financial year was driven mainly by cost optimization, contracts renegotiation and operational efficiency.
“The 2019 AFS goes further to demonstrate our unwavering commitment to the principle of Transparency, Accountability and Performance Excellence (TAPE) while the outlook for 2020 looks promising in view of the Management’s strong drive to prune down running cost and grow revenues”, he said.