By Chisaa Okoye (Business Reporter)
Pressure on President Bola Tinubu to sack the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari is mounting with scores of top government functionaries and oil and gas industry stakeholders lamenting the fast dwindling fortunes of the once vibrant national oil company.
These top officials, who spoke to ARMADANEWS at various fora last week, cited dwindling crude oil production, poor state of Nigeria’s refineries despite billions of dollars allocated for their repairs and turnaround maintenance; continued gas shortage for electricity generation and other domestic uses, as clear indications that the oil industry is not faring well under Kyari’s leadership at the NNPCL.
Besides, they noted that Nigeria’s oil sector, hitherto known as investors’ choice and investment heaven, has continued to witness the worst investment lull in its history as investors now shun the oil industry due to corruption and lack of incentives. Also, recurrent fuel scarcity being witnessed across Nigeria in recent times, is said to be a major impediment to business growth.
Whereas refined products are diverted to sister countries, with the collusion of corrupt oil industry officials, businesses are often grounded in Nigeria due to recurrent petrol scarcity.
Many small businesses have since shut down because of high cost of petrol.
While Kyari’s NNPCL has remained a cesspool of corruption, as oil revenues are often not accounted for, some oil industry officials are linked to crude oil theft and money-for- contract deals, even as pipeline vandalism has remained unabated with no end in sight.
Worried about these ugly developments, and their attendant consequences to the Nigerian economy, these concerned Nigerians have urged President Tinubu, who also doubles as the Petroleum Minister to remove Kyari and other non performing top oil industry officials and appoint seasoned professionals that have the capabilities to turnaround the ailing oil and gas industry for steady economic growth and development.
Kyari, the GCEO of the NNPC Limited, was appointed as the 19th Group Managing Director (GMD) of the NNPC in July 2019. He subsequently became the first GCEO of NNPC Limited upon the incorporation of NNPC into a limited liability company in September 2021 and was retained in that capacity by Tinubu when he assumed office in May last year as the President of Nigeria.
Nigeria’s oil production has been on a steady decline since this year, dropping from 1.427million barrels per day in January, according to data from the Organization of Petroleum Exporting Countries (OPEC) to about 1.2mbpd currently.
The 2024 national budget set a benchmark production target of 1.78 million barrels of oil daily to achieve revenue projections. Also, the federal government projected the benchmark price of crude oil in the budget at $77.96. The current crude oil production of about 1.2mbpd is far below the 2024 budget target of 1.78mbpd and a far cry from OPEC quota which is above 2mbd.
The concerned Nigerians, have expressed fears that the low crude oil production will hamper the implementation of Tinubu’s ‘Budget of Renewed Hope and by extension his Renewed Hope Agenda, because oil remains the life wire of Nigeria’s economy.
Shortly after the 2024 budget approval, Kyari had given a firm assurance that the projections on crude oil production and price benchmark for the 2024 budget were “realistic and realizable.”
He gave the assurance during an interactive session with the Senate Committee on Finance at the National Assembly, Abuja.
“The number we have is 1.785mbpd. This is cumulative of all oil produced in the country. This figure is inclusive of all production including crude oil and condensate. I need to make this clarification because of the reports in the media that our OPEC quota is 1.5million barrels per day. The OPEC quota is related only to crude oil. We also do between 250,000 to 300,000 barrels per day of condensate in our production. When you combine the two, the 1.78mbpd is realistic and realisable”, a statement by Olufemi Soneye, spokesperson for the NNPCL, quoted Kyari as saying.
But some top government officials have expressed concerns that Kyari, despite his over 34 years experience in the oil industry has not done enough to reposition the sector to growth part.
“There are no strategies in place to commit the partners to do the needful, no new major projects that will raise production are on going, the modular refineries are not progressing; I think only two are producing currently. No new licensing round for years, crude oil theft is rising by day. What this shows is that all is not well with the national oil company under Mele Kyari’s watch”, a key player in the oil sector lamented.
Similarly, another top oil industry executive also confirmed that the oil industry has experienced the worst investment lull since Kyari came on board a few years ago. He said the foreign partners are reluctant to invest in new projects owing to lack of incentives and corruption.
According to him, the nation’s four refineries have not been producing despite the billions of dollars allocated for their repairs and upgrades.
“Recall that shortly after Kyari assumed office as GMD, he unveiled what he tagged: TAPE- Transparency, Accountability and Performance Excellence (TAPE), a five-step strategic roadmap for NNPC’s attainment of efficiency and global excellence. We are all witnesses that little or nothing has changed since he took over the helm at the oil company.
“Under his watch as GMD and lately the GCEO, NNPCL has remained a cesspool of corruption as bribe- for -oil contracts has continued. Also, funds allocated for refineries upgrades and rehabilitations were cornered to private pockets, leaving the country with no choice than to import refined petrol at huge costs from other countries.
“The crude lifting contracts is still characterized by corruption, while industry officials issue permits to marketers who bring substandard petrol into the country at huge costs.
“Also, recent audit reports revealed NNPC’s sharp business practices, illegal deductions of funds, violation of laid down rules/regulations under Kyari’s watch. There’s also the report of the company’s failure to account for several billions of naira that should go to the federation account. So what happened to the Transparency and Accountability mantra.”
Speaking in the same vein, a serving Senator under the platform of the ruling All Progressives Congress, expressed concern that the once vibrant NNPC, which earned the country a top position of Africa’s biggest oil producer is now comatose.
He lamented that successive NNPC Officials and oil and gas ministers often set delivery deadlines on projects they know little or nothing about.
He recalled that the NNPC, as it then was, had set 4mbpd oil production target over the past years but never attained it. He pointed out that rather than the country growing its oil production to boost her revenue, what we are witnessing currently is drastic reduction in crude production to as low as 1.2mbpd.
He posited that like his predecessors, Kyari has failed woefully to deliver on his promises including Performance Efficiency and has instead brought the oil industry to its knees.
“Corruption is still the order of the day at the NNPCL. Nigeria still imports almost all its fuel because the NNPC mismanaged the refineries and left them in dilapidated states. It is feared that with the dwindling crude production, Nigeria may soon be unable to meet her local crude obligations. Look at what is playing out now. We have the Dangote Refinery but it is starved of crude oil. The NNPCL prefers to import refined petrol and export crude oil because the officials are benefiting from them at the expense of the poor masses. We were told that government removed subsidy but here we are! petrol is still scarce despite that Nigerians buy it at exorbitant cost.”
He further noted: “All we hear is that Nigeria is more of a gas producing nation than oil, yet we have no gas to generate electricity and we still face gas shortage for other domestic uses. This has forced many companies to close their businesses in Nigeria, after recording losses for years.
“The two junior oil ministers are also not trying. There is no meaningful development from their end since they came on board.”
The Senator further noted that “It has been the same trend of setting targets that will never be realised. If you followed the trend over the past few years, it has been the same. Nothing has changed. The oil industry officials appear helpless and when they visit project sites, all the do is set a new target for delivery. No project has been delivered on schedule and no contractor has been sanctioned for failure to achieve set deadlines.”
“For instance, the AKK project, NNPCL GCEO and other top officials have announced different dates for the coming on stream of the project, while the contractor and the oil and gas ministers announced different delivery dates. This is embarrassing and the business community is watching.
“My advice to President Tinubu is to shop for credible Nigerians or even expatriates who have the capabilities to revive this revenue generating sector to boost the economy for the good of the generality of Nigerians”, he stressed.
He lamented that the GCEO is ‘playing game” with the refineries, pointing out that the Port Harcourt Refinery is not functioning despite the huge amounts that have gone into its rehabilitation.
At the inauguration of the NNPCL board and management team last December, President Tinubu had declared that “non-performance could result in the board’s dissolution without prior notice to members.”