By Adewole Kehinde
“There was a problem for years between NNPC and Indorama; I stepped in when it came to my attention. I gave them 21 days to sought the issues. Before 21 days, Mele Kyari came to my office to say we had solved the problems. Thank you, Mele Kyari… President Tinubu
With the following statement from President Bola Tinubu, the President has recognized Mele Kyari’s capacity, implying that he has what it takes to properly unleash Nigeria’s vast investment potential in the oil and gas sector.
Kyari, as an insider, understood well the workings of the NNPC Limited system as well as the oil and gas industry in Nigeria.
Kyari hit the ground running within days of his appointment. The performance of NNPC Limited under his leadership has been impressive, to say the least. Under him, situations and circumstances that in the past had appeared insurmountable were turned around.
One of these challenges is the reference President Tinubu made at the Nigeria-India Presidential Roundtable and Business Conference, which earned Mele Kyari the Presidential “Thank You.”
If Mele Kyari had not handled the crisis between NNPC Limited and Indorama Petrochemicals Limited very well, the new $8 billion pledged towards the expansion of Indorama Petrochemicals Limited’s fertilizer production and petrochemical facility in Eleme, Rivers State, wouldn’t have come to reality.
Aside from Indorama Petrochemicals Limited, Kyari has also led the NNPCL to resolve age-old disputes with its other business partners, notably the International Oil Companies (IOCs). This is part of its efforts at boosting Nigeria’s crude production and unlocking investments in the deepwater space in the aftermath of the coming into being of the Petroleum Industry Act.
Consequently, the NNPC Limited and the IOCs signed various Production Sharing Contracts (PSCs) agreements that would ensure the production of about 10 billion barrels of crude oil and generate over $500 billion in revenue. The agreements are the Production Sharing Agreement, Dispute Settlement Agreement, Settlement Repayment Agreement, and Escrow Agreement.
Still about the relationship with the IOCs, a notable accomplishment of Kyari’s leadership of NNPCL is the payment of Nigeria’s joint venture cash call arrears to the IOCs totaling $5.1 billion.
This was made possible through the introduction of the Alternative Funding Approach (AFA), which replaced the erstwhile cash-call payment model.
The Alternative Funding Approach model allowed for the utilization of NNPCL’s funds to finance its share of joint venture operations, thereby reducing the country’s reliance on external borrowing and increasing the flow of investment into the industry. Many oil-producing African countries have since adopted this initiative.
Also, NNPC Limited and Addax Petroleum Company signed an asset transfer agreement to bring an end to the dispute surrounding Oil Mining Leases 123/124 and 126/137.
With the agreement, the dispute over OMLs 123/124, 126/137, operated by Addax Petroleum Nigeria Limited, has finally been resolved.
The Production Sharing Contract for the blocks was initially signed in 1973 between NNPC and Ashland but was terminated after 25 years.
NNPC also signed various Memoranda of Association (MoU) with many countries, including the national oil companies of Ghana, Gambia, Guinea, Guinea Bissau, and Sierra Leone, in furtherance of the planned Nigeria-Morocco Gas Pipeline Project.
In 2022, the NNPC Limited sealed a $1.4 billion external project finance agreement for hydrocarbon projects in the Niger Delta. Codenamed Project Panther (under the NNPC Limited/Chevron Nigeria Limited joint venture), the agreement was signed at a ceremony in London.
That same year, NNPC Limited, according to its vision of maintaining a leading position in the Nigerian petroleum downstream sector, acquired OVH Energy Marketing (OVHEM), owner and operator of the Oando downstream assets.
Through this acquisition, NNPC Retail Limited will build on the existing success of OVH and operate model service outlets, leveraging OVH’s extensive asset base and commercial capabilities.
There is no doubt that Mele Kyari has unveiled programmes and policies that have enhanced transparency and efficiency in the operations of the company.
These include the setting up of a new trading subsidiary, the establishment of a new crude oil marketing division, and the implementation of a new performance management system, which enhances accountability in the Nigerian oil and gas sector by publishing monthly financial and operational reports.
For those who don’t know about Indorama Eleme Petrochemicals Company Limited is the current management of Eleme Petrochemicals Company Limited (EPCL), having taken over management and ownership of the company from the Nigerian National Petroleum Company (NNPC) in 2006. The group later set up fertilizer lines.
Indorama Nigeria owns 65 percent of Indorama Eleme Petrochemicals; NNPC owns 10 percent; the government of Rivers State owns 10 percent; the host community owns 7.5 percent; the Federal Government owns 5 percent; and its Nigerian employees own 2.5 percent.
Mele Kyari has never failed in any assigned task because he has the requisite professional skill, acumen, experience, and track records of innovation, reformation, and achievements in the industry.
Adewole Kehinde is the publisher of Swift Reporters and can be reached via 08166240846, e-mail: kennyadewole@gmail.com
