How Tinubu’s executive orders have impacted growth in the oil and gas sector —Soneye

Concluding an interview with journalists, the Chief Corporate Communications Officer (CCCO) of the Nigeria National Petroleum Corporation Limited (NNPCL), Olufemi Soneye, discusses the achievements of the Mele Kyari-led NNPCL in increasing crude oil production, improving yields and the positive impact of President Bola Tinubu’s Executive Orders in the energy sector, concluding that things can only get better soon.

There are rumours about the re-orientation of NNPC by the Group CEO Mele Kyari. What are these rumours about and can you shed more light on this re-orientation?

Indeed, the excitement surrounding Mele Kyari’s transformation of NNPC Ltd. is well-founded. Since taking over as CEO in July 2019, he has driven significant organizational change and significantly improved NNPC’s performance and long-term profitability. Kyari has been the driving force behind ambitious business growth and has introduced a new commercial mindset across the company’s value chain.

Under his leadership, NNPCL’s workforce was revitalized. Today, the company continues to attract interest from business partners, customers, suppliers and shareholders. Since its conversion into a trading company under the Petroleum Industry Act (PIA), 2021 and in compliance with the provisions of the Company & Allied Matters Act (CAMA), it has consistently created value despite its unique operational challenges. Kyari has successfully positioned NNPCL for success in the global energy industry by strengthening competencies and capabilities through broad-based leadership experience and deepening a performance culture across the organization. Governance within NNPC Ltd has also been enhanced, with a focus on agility and consequence management.

With his vision of Transparency, Accountability and Performance Excellence (TAPE), Kyari has created a clear culture of commerciality, profitability, efficiency and growth. The results speak for themselves. For the first time in 43 years, NNPC reported a profit. From a loss of N803 billion in 2018, the company reduced it to just N1.7 billion in 2019. Notably, in 2020, NNPC recorded its first-ever profit of N287 billion, which increased to N674.1 billion in 2021 and grew to N2.548 trillion by the end of 2022 – a historic achievement in the company’s financial performance in over 46 years.

Kyari’s influence is also evident in the success of the country’s gas infrastructure projects. Since the beginning of his tenure, several gas projects have been completed and many more are in the works. These include the expansion of the AHL Gas Processing Plant in Imo State, the ANOH Gas Processing Plant, the 23.3km ANOH-OB3 Gas Pipeline in Kwale, the IGHF in Oredo and the Methanol Plant in Bayelsa. Upcoming major gas projects include the Ajaokuta-Kaduna-Kano (AKK) OB3 Gas Pipeline and the Nigeria-Morocco Gas Pipeline Project (NMGP). These projects are aimed at increasing domestic gas utilization, improving power generation, creating jobs and increasing government revenue.

I can also tell you that NNPCL under Kyari is also driving the initiative to intensify the use of CNG/Autogas through its NRL filling stations and partnerships with downstream players like NIPCO. Thousands of Nigerians are now using this cheaper, cleaner energy alternative, following global trends.

The enthusiasm for Kyari’s leadership is genuine and well-deserved as he has brought positive change to the company. He remains true to these monumental achievements. As the GCEO often says, “Stop discussing, get it done,” and he leads by example. That is why we are focused on the enormous task of ensuring the nation’s energy security rather than reacting to every criticism.

But you will agree with me that there are some Nigerians who disagree with your assessment.

That is true because of course people have different opinions and views on these issues. However, it is clear that the majority would probably agree with that assessment. When we say that Kyari has put NNPC Ltd on the path of growth and profitability, it is not just talk. Under Kyari’s leadership, NNPCL is actively working to increase Nigeria’s oil and gas reserves by intensifying exploration across the country. The results of Kyari’s efforts speak for themselves. He has invested in new projects and facilities aimed at developing at least one billion barrels of crude oil reserves. Just consider successes such as the Kolmani Spud-in and oil discovery in Gombe/Bauchi, the Ebenyi-A Well Spud-in in Nasarawa and the Wadi-A Well Re-entry in Borno. Soon our refineries will be back in operation thanks to the crucial role of the NNPCL leadership in improving refining in the country and ensuring national energy security. The simultaneous rehabilitation of Port Harcourt, Warri and Kaduna refineries is in full swing. In addition, NNPCL has strategic partnerships with some private refineries and supports modular refineries. For example, we supported the Dangote refinery with an investment of US$1 billion to participate in the project.

How will NNPCL ensure that the decades-long non-publication of financial reports, which it has violated, continues to apply?

This is a new NNPC with a fresh business focus and commercial mindset. Most importantly, we are now a private limited company. With our new status, like all companies under the Company & Allied Matters Act (CAMA), we are required to open our books regularly. And don’t forget, we are working towards a landmark Initial Public Offering (IPO). I am confident that this progress will continue. Under the leadership of Mele Kyari, we have broken numerous positive records at NNPC and continue to build on them. He has turned the company from an 803 billion naira loss in 2018 to a profitable company, reporting profits for three consecutive years.

How has NNPCL given weight to some aspects of President Tinubu’s Executive Orders in the energy sector?

The Presidential Orders on Oil and Gas have been instrumental in the company achieving its mandate. President Ahmed Tinubu has provided strong support and has truly put the sector on the path to success. NNPCL is fully behind the Federal Government’s ambition to accelerate economic growth and diversify the economy for the benefit of all Nigerians. This will be achieved through timely, credible, clear and consistent policies. The results are there for all to see and we must commend Mr President for the Presidential Orders and for providing the country’s security agencies with the resources they need to protect national assets.

For example, First E&P has often talked about how NNPC helped the company avoid financial difficulties by assisting in the development of the 60,000 bpd Madu Anyala fields. Many other companies in the industry today talk about how the partnership with NNPC Ltd. was instrumental in their success.

What is being done to revive the closed oil wells?

We are doing a lot in this area. For example, NNPC Limited recently established an Upstream Hydrocarbon Production War Room to review and support all activities aimed at increasing hydrocarbon production, including the safe reopening of temporarily idled wells for maintenance and intervention work. We have already identified potential wells for reactivation at several assets and NNPC Limited is providing operators with the necessary support to expedite these operations and bring the wells back into production.

To give you a better understanding, it is important to know why oil wells are shut down (or capped) in the first place. Generally, in the oil and gas industry, there are three main reasons for the decision to cap and abandon a well: safety concerns and environmental protection; resource depletion; and the end of a lease. In cases of resource depletion and/or the end of a lease, wells are usually permanently capped and abandoned as there is no reason to reopen them unless further exploration reveals significant opportunities.

In Nigeria, insecurity is another factor that can lead to an oil well being blocked. In some cases, companies have had to abruptly abandon their production facilities for safety reasons and wait for conditions to improve before resuming operations. However, with the improvement in the security situation, thanks to the success of industry-wide security cooperation to protect hydrocarbon infrastructure, facilities are being abandoned less frequently for safety reasons. Operators are now able to re-enter these previously abandoned oil wells.

But don’t you think that these efforts will not pay off because of oil theft?

Such a mindset would undermine the efforts of our security agencies and other stakeholders in the fight against crude oil theft. As I mentioned earlier, we have made significant progress as evidenced by our current crude oil production of 1.65 million barrels per day. We are grateful to the Chief of Staff, the team and all other stakeholders.

This Port Harcourt refinery issue is like an Abiku. When will it surface?

Nobody wants an ‘Abiku’ child, not even an enemy. At NNPC, we have stated several times that the Port Harcourt refinery has been mechanically completed. It is currently undergoing standard assessment tests by the relevant regulatory body and will be operational very soon. It has already received crude oil, so it will be operational very soon.

READ ALSO: Flood: Oyo Rep, Odidi-Omo begins channelization of Anfani River