By Adewole Kehinde
“BOLD means to Be Open to Lots of Developments – Byron Pulsifer“
NNPC Limited is a dynamic global energy company with businesses and operations across the entire spectrum of the energy value chain.
The Nigerian National Petroleum Company Limited (NNPCL) marked two years of becoming a business whose operations are governed by the Companies and Allied Matters Act on Friday, July 19, 2024
Following the Petroleum Industry Act of 2021’s enactment, the Nigerian National Petroleum Corporation changed into a CAMA business.
For NNPC Ltd. and the management team led by Group Chief Executive Officer Mallam Mele Kyari, the signing of the Petroleum Industry Act (PIA) by former President Muhammadu Buhari in August 2021 changed everything because it allowed for even more substantial reforms within the national oil company.
Its vision is to be the dynamic global energy company of choice while its mission is to reliably deliver energy while continuously creating value for all stakeholders. Its strategy is focused on growing the global energy delivery capacity
After the Company and Allied Matters Act (CAMA) business was unveiled in 2022 and incorporated into the Petroleum Industry Act (PIA), the stage was set for a restructured national oil company that could contend with competitors throughout the world.
Many acknowledged that the former NNPC had a less-than-stellar history before the PIA’s passage because of what appeared to be a decline in trust in the organization’s management. However, once the PIA’s implementation began under the GCEO’s direction, that opinion evolved.
In 2020, the NNPCL turned a profit after tax of N287 billion, marking the first time in its 44-year history that the firm had turned a profit. This increased to N674 billion in 2021 and then to N2.52 trillion in the fiscal year 2022–2023.
Stakeholders believe that things are set to improve even more now that the corporation has completely transformed into a commercial entity, given the notable advancements the Nigerian oil sector has had since the Petroleum Industry Act’s introduction in 2021.
Notably, Kyari put up a great deal of effort to secure the PIA’s passage. This programme aims to restructure the nation’s energy laws, de-regulate the industry, remove government oversight from the oil sector, and unbundle the oil firm.
To ensure that there are no justifications for failure, the PIA’s enactment in 2022 gave rise to a revitalised NNPCL, granting it the same operating privileges as any other private corporation in Nigeria. This included exemption from the Public Procurement Act, the Fiscal Responsibility Act, and the Treasury Single Account.
The NNPCL made history as the business with the highest share capital in the nation when it was registered with the Corporate Affairs Commission and launched with an initial capital of N200 billion.
The management of the NNPC has taken proactive measures to realign its operations between the time the PIA was signed into law in August 2021 to the present.
To understand the effects of the changes the PIA brings about, for example, multiple engagements were held with the NNPCL, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the Nigerian Upstream Petroleum Regulatory Commission, the Ministry of Petroleum Resources, the Ministry of Finance, governors, legislators, host communities, and other important stakeholders.
To further revitalise the previously unproductive company, Kyari introduced additional investment benchmarks after reaching this milestone. The NNPCL acquired OVH in September 2022, two months after it became a CAMA firm. This allowed it to expand its asset base, which now included 12 warehouses, eight LPG plants, three lube blending plants, three aviation depots, and a reception jetty (ASPM) with a capacity of 240,000 MT per month.
In addition, NNPCL now has the most fueling stations in Africa after Oando’s 380 fueling stations were added to its current network. By the agreement, NNPCL was able to take advantage of Oando’s presence throughout Africa and grow into a major energy provider.
The acquisition demonstrated the GCEO of NNPCL’s desire to establish the business as a major player in the international energy industry. In addition to this agreement, the NNPCL under Kyari signed an additional agreement with four National Oil Companies in June of last year for the $25 billion Nigeria-Morocco Gas Pipeline Project.
The Société Nationale des Opérations Pétrolières of Cote d’Ivoire (PETROCI), the National Oil Company of Liberia (NOCAL), the Société Nationale des Hydrocarbures of Benin (SNH-Benin), and the Société Nationale des Pétroles of the Republic of Guinea (SONAP) signed these tripartite Memorandums of Understanding on behalf of the Nigerian National Petroleum Company Limited (NNPC) and the Office National des Hydrocarbures et des Mines (ONHYM) of Morocco, respectively, and thereafter.
The Federal Government of Nigeria and the Kingdom of Morocco came up with the idea for the Nigeria-Morocco Gas Pipeline (NMGP) Project during King Mohammed VI of Morocco’s visit to Nigeria in December 2016.
The project’s pipeline cooperation agreement was completed and signed in 2017.
The project’s pipeline spans 1,700 km (onshore) from Dakhla, Morocco, to Northern Morocco, and 5,300 kilometres from Nigeria to Dakhla, Morocco.
The pipeline capacity for the project is 30BCM per year which is equivalent to 3.0 BSCFD
Already, MoUs have been executed for the project with ECOWAS, SMH of Mauritania and Petrosen of Senegal.
With his perseverance, Kyari made sure the contract went through. The project’s objectives are to diversify Nigeria’s gas export routes, eliminate gas flaring, and make money by commercialising the country’s rich natural gas resources.
Along with helping to supply gas to Morocco, the 13 ECOWAS countries, and Europe, the project will also help to integrate the economies of the Sub-region, raise living standards, create wealth, and reduce poverty. It will also help to combat desertification by providing a sustainable and reliable gas supply, as well as opening up opportunities for other countries along the pipeline route to develop and export their gas.
When the project is finished, it will improve the monetization of the impacted African nations’ natural gas resources and provide a fresh export path to Europe.
The agreement represents yet another significant turning point in the fight against energy poverty, which has been impeding Africa’s ability to lead the continent’s industrialization.
As a for-profit company, the NNPCL under Kyari views this project as a chance to capitalise on Nigeria’s plentiful hydrocarbon resources by increasing energy access to promote industrialization, economic expansion, and the creation of jobs throughout Africa and beyond.
In 2023, Kyari’s influence on the oil and gas industry persisted as the Nigerian petrochemical industry received $7 billion in new investments from India through NNPC Ltd. President Bola Tinubu travelled with Kyari to India, where the agreement was announced.
Tinubu left the capital of Nigeria, Abuja, to attend the G20 meeting in New Delhi, India, on September 9–10, 2023. The President’s trip to India was intended to draw foreign investment to Nigeria by offering rich opportunities for investors and, above all, new sources of income and employment for Nigerians.
India is one of the growing markets for Nigeria’s Liquefied Natural Gas and through this deal, the government will be able to create job opportunities for Nigerians. Indian businesses serve as significant investment sources in the midstream, downstream and upstream sectors of the oil and gas industry.
In the area of gas infrastructure, since the announcement of the fuel subsidy removal in 2023, the NNPCL has doubled its efforts to drive energy security by utilizing Nigeria’s abundant gas resources. The company has delivered numerous gas projects that would drive CNG gas penetration across the country.
Last year, the NNPCL entered a partnership with NIPCO to set up 35 compressed natural gas (CNG) stations in Lagos and other parts of the country. During the partnership, Kyari had said the partnership is “Part of the NNPCL commitment to reducing carbon footprint and providing cheaper alternative fuel to motorists.”
On May 19, 2024, the NNPCL and partners also delivered three critical gas infrastructures commissioned by the President. The projects were, the AHL Gas Processing Plant 2 (GPP – 2) – 200mmscf/d which is an expansion to the Kwale Gas Processing Plant (GPP – 1); the AHL Gas Plant, which is being developed by AHL Limited, an incorporated Joint Venture owned by NNPC Limited and SEEPCO and the ANOH-OB3 CTMS Gas Pipeline Project.
In furtherance of the efforts to drive increased gas utilisation in the country, the federal government also commissioned the 5.2 MMSCFD Compressed Natural Gas/Autogas Facility at Ilasamaja, Lagos, built through a partnership between the NNPC Limited and Transit Gas Nigeria Limited (TGNL).
Under the theme: “From Gas to Prosperity; CNG For All”, the NNPC CNG Station is a 5.2MMscf per day capacity station that can serve vehicles and also supply gas to industries and other companies.
The station is strategically located and it is expected to meet the fuelling needs of motorists, in line with the federal government’s goal of nationwide adoption of CNG as the fuel of choice for transportation.
The facility is 100 per cent energy sufficient due to the natural gas advantage and does not depend on the national grid for power. It will serve thousands of Natural Gas-powered vehicles in Lagos and its surroundings; while promoting a stable, cleaner energy for domestic utilization. It will also contribute significantly to annual carbon dioxide emissions savings and support environmental sustainability.
Also, in June this year, in a major step towards boosting Nigeria’s oil and gas production, the NNPC-TotalEnergies Joint Venture officially announced a $550m Final Investment Decision (FID) on the Ubeta Field Development Project.
This milestone is in line with President Tinubu’s Presidential Executive Order on Oil and Gas Reforms aimed largely at improving the investment climate and positioning Nigeria as the preferred investment destination for the oil and gas sector in Africa.
The three Executive Orders, which became effective 28th February 2024, are the Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024; Presidential Directive on Local Content Compliance Requirements, 2024; and Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines, 2024.
Nigeria is endowed with large oil and gas resources and under Kyari’s transformative leadership, the NNPCL had conceived the idea of monetising Nigeria’s huge gas resources through various gas projects.
For a man who has transformed the NNPCL within the last four years despite the mounting opposition to some of his reform initiatives, it is gratifying to know that the President believes in Kyari’s capacity to implement energy policies that will enable the federal government to monetize all available oil and gas resources of today while paving the way for the total exploitation of new and cleaner energy sources of tomorrow.
Since the issuance of the Presidential Executive Orders, the NNPCL has redoubled its efforts to drive energy security by utilising Nigeria’s abundant gas resources.
Under Kyari’s leadership, the NNPCL has invested heavily in domestic gas footprint expansion projects through the delivery of the trans-Nigerian gas pipeline projects which include the Escravos project, the Lagos pipeline system, and the Ajaokuta-Kano Gas Pipelines.
As a national oil company, the NNPCL is cooperating with its partners to solve the energy challenges facing the country.
With Nigeria boasting substantial gas reserves exceeding 200 trillion cubic feet (Tcf) and a potential to reach 600 Tcf, it is pertinent Nigeria leverages the gas resource for sustainable development, energy security, and job creation.
The NNPCL is making great strides towards fulfilling its mission with large investments in the oil and gas industry under Kyari’s focused and dynamic leadership. In the past two years, the company has improved its operations, innovation, and dedication to sustainability.
By enhancing its upstream production, expanding gas processing and transportation services for domestic consumption, and exports, NNPC Limited is also revamping and expanding its refining assets portfolio through greenfield projects with chemicals production integration and leverage equity partnerships. This will ensure NNPC Limited have sufficient capacity to meet local and international demand for premium energy products and services.
Adewole Kehinde is the publisher of Swift Reporters. 08166240846. kennyadewole@gmail.com
