COMMENTARY: Looking Over Kyari’s Shoulder
By Mahmud Jega
Not for nothing did Kaduna State Governor Nasir El-Rufai, who is not given to hyperbole, say that Group Managing Director of the Nigeria National Petroleum Corporation (NNPC) Mele Kyari is a corporate “game changer” who should however look over his shoulder before the permanent oil cabal comes after him. In one year in office, El-Rufa’i said, Kyari made accountability and transparency his central ethos, something that cannot please the cabal that has been feeding fat on national oil revenues.
Kyari’s game changing ensured, for example, that NNPC recently published its 2018 audited accounts, the first time in 43 years that it did this. No wonder that el-Rufa’i said that “Mele Kyari’s heart is in the right place! His tenure shall be the game changer that NNPC and Nigeria needs. He is competent, confident and rapidly plugging leakages, repositioning the Corporation towards greater transparency and accountability. The oil cabal will certainly attack him!”
It was not just publishing of audited accounts that are Kyari’s game changing. Last year he launched a corporate culture rejuvenation motivating slogan called TAPE, i.e. Transparency, Accountability and Performance Excellence. It has already had a profound effect on NNPC’s workforce. Kyari concluded the recruitment exercise that he inherited of about 1000 graduate trainees. I don’t know how true it is, but it was speculated widely that he had his son delisted from the shortlist even though the young man had all the qualifications. Many sons and daughters of powerful public figures also fell by the wayside and made way for children of poor backgrounds, a major departure from past practice.
Mele Kyari also presided over the historic signing ceremony of the Final Investment Decision [FID] of the NLNG Train7, a gigantic project that suffered an unnecessary ten years’ delay. The FID will increase the capacity of NLNG’s six-train plant from 22 Million Tonnes Per Annum (MTPA) to 30 MTPA, a 35% increase. The GMD then unveiled new brands of NNPC-produced engine oil which was launched into the market. These varieties of engine oil will make NNPC more profitable and self-sustaining.
When the COVID-19 pandemic hit earlier this year, Mele Kyari galvanized major oil companies to contribute N21billion for coronavirus intervention in Nigeria. NNPC then decided to use 53 per cent of the money to construct state-of-the-art medical facilities in six geopolitical zones. Ground-breaking ceremonies for the construction of 200-bed Infectious Diseases Hospitals with in-situ laboratories have already taken place in Bayelsa, Borno, Katsina and Imo states with other locations soon to follow.
Kyari’s passion for transparency in oil industry did not start today. He was once a member of the global Extractive Industry Transparency Initiative [EITI] working group on commodity trading transparency. No wonder that he has now prodded NNPC to terminate and exit the controversial regime of subsidy and under-recovery. Previous efforts at ending the scandal-ridden subsidy regime were stoutly resisted. Kyari has announced that henceforth, market forces shall determine petrol prices in the country.
The sorry condition of the nation’s four refineries has engaged Kyari’s full attention. He announced a determination to revamp them in the next three years. His plan is not only to get them back on track but to revamp and transfer [though not sell] them to companies with the track record and capability to operate and maintain them in a transparent partnership arrangement. Kyari also introduced Operation White, a taskforce to checkmate the smuggling and hoarding of petroleum products. Prior to its coming, the country’s daily consumption of petroleum products was said to be around 60 million litres every day. Operation White however drastically cut the figure, making a huge saving on cost of subsidizing millions of litres that end up in neigbouring countries. There has been no fuel scarcity during Mele Kyari’s one year at the helm, not during the Yuletide or even during the pandemic.
GMD Mele Kyari is determined to cut Nigeria’s crude oil production cost to $10 per barrel by 2021, which will greatly enhance profitability. He said current crude oil production cost in Nigeria is $15 to $17 per barrel, in contrast to industry leader Saudi Arabia’s $4 to $5 per barrel production cost. Nigeria has one of the oil producers’ highest production cost per barrel. Under Kyari’s watch, the major gas project that will link South with North has commenced. NNPC-sponsored Ajaokuta–Kaduna–Kano (AKK) gas pipeline project, handled by leading indigenous firm OILSERV Limited, also commenced a few weeks ago. No wonder that this high performing GMD was advised to look over his shoulder, lest the cabal from the old order, totally averse to transparency, come charging after him.
Culled from The Value Chain