Nigerian National Petroleum Corporation (NNPC) Group Managing Director (GMD) Emmanuel Ibe Kachikwu has his job cut out for him – rid the oil giant of corruption and opacity; make the outfit accountable and competitively profitable. At an interactive session with energy reporters in Lagos, Kachikwu spoke of his plan to turn around the fortune of the Corporation, reports EMEKA UGWUANYI
President Muhammadu Buhari clearly spelt out Dr. Emmanuel Ibe Kachikwu’s mandate when he was named the Group Managing Director (GMD), Nigerian National Petroleum Corporation (NNPC), on August 4.
He should clear the rot, overhaul the system and reorganise the corporation as a profit-making business entity with all the refineries reactivated to function at nameplate capacities.
The President spicifically asked Kachikwu to rid the system of corrupt elements; work with anti-graft agencies and security outfits to recover stolen oil cash; prosecute the culprits; reposition the corporation’s structure to compete globally and give targets to all its subsidiaries as well as set a performance benchmark.
Two months after Kachikwu took over, the President’s vision of putting the corporation on its toes and making it live up to its rating as the government’s cash-cow, is on track, laying credence to what integrity and good governance can do. Things are gradually taking shape, some industry watchers say.
They recount how early this year, oil marketers almost ran the economy aground, as they subjected Nigerians to untold hardship. Then, a litre of petrol sold for as high as N300 and hawking of petroleum products became fashionable for jobless youths. Service nozzles at retail outlets ran dry and many stations temporarily closed shops. Airlines were cancelling flights for lack of aviation fuel. Due to lack of gas supply to power stations caused by pipeline vandalism, electricity distribution companies at some point got zero power supply from the national grid, thereby throwing the nation into blackout.
But, today, fuel stations have products, with attendants beg customers for patronage. Yet, the over N300 billion debt, owed to oil marketers under the petroleum subsidy regime, which they (marketers) claimed, was responsible for fuel scarcity, has not been paid. There is little or no report at all on gas pipeline vandalism. Substantially, stability has been attained in gas supply to the power stations, resulting to increased hours of power supply.
At the NNPC, due process and new business models have suddenly replaced the old order. Contracts that have no value to add to the system are being cancelled, a top official at the Warri Refinery told The Nation. He added: “It has been business unusual since Kachikwu came on board”.
Not a few Nigerians have expressed shock at the sudden change of attitude even when the government has not taken any action against unscrupulous elements and saboteurs. The government, they noted, has not started pumping money into the petroleum and power sectors for upgrade and greater output.
Their conclusion was that the perception of the President’s anticorruption stance has forced the saboteurs to fall in line while the hawks and locusts have voluntarily walked away.
“Although Kachikwu is a lawyer by training, he is a thoroughbred oil and gas professional, having spent about 30 years in the oilindustry. He knows the industry inside out and has an impeccable antecedent. I’m sure he will deliver on his mission, make the industry and Nigerians proud, if allowed to work”, Oyibo told The Nation on Kachikwu’s appointment.
But, the man in the saddle said his time is limited. Yet, he says the presidential mandate must be carried out. The President gave him the liberty to use his discretion, provided such measures will lift the economy. Kachikwu has, however, urged Nigerians to brace for relocation from their comfort zones is the desired change moust be achieved. “If we don’t leave our comfort zones, this country will not move forward and you have no right to complain from the outside,” he said.
Promising to make a difference, he said: “As I found myself thrust in this position and national responsibility, I’m determined to make my mark. I make bold to say that my time on this job is limited.
“I see a lot of people take government jobs and their concern is on how long they last. My focus is not on how long but on how well. I’m conscious about how well I do the job given to me. I just want to make a difference, no matter how short I stay in office. So, if you see some of the actions that are coming out of my table, you’ll discover that I’m moving with a lot of speed, almost like I have very limited time to do much.
“But frankly, I wouldn’t forgive myself if I stay there for one or two weeks and I didn’t take the right decisions. I would never have a reason to complain after this and that is my attitude. Every day I look at every model of our business and economy, I think what needs to be done.
“I’m grateful to be working with the President, who has done everything one would expect in terms of giving you the latitude to bring your ideas on the table and discuss with him to raech decisions that will be beneficial to the industry and sort of, keep the institution moving. He has thus, given me a fairly free hand. And he is willing to assist me in sanitising the industry.”
Taming the hawks, locusts
In line with his decision to clean up the NNPC, make it competitive and profitable, Kachikwu has cutrunning costs. He has pruned directorates, cancelled and reviewed some of the contracts initiated by the past administration.
The business directorates, headed by group executive directors, have been trimmed from nine to four. After the reorganistaion, the directorates of Finance & Accounts, Exploration & Production, Corporate Planning & Strategy, Engineering & Technology, Gas & Power, Commercial & Investment, Corporate Services, Refining & Petrochemicals, and Business Development were rolled into Exploration & Production, Finance & Services, Refining & Technology and Commercial & Investment.
The GMD also reviewed and cancelled the contracts on the delivery of crude oil to the refineries in Warri, Port Harcourt and Kaduna, the Offshore Processing Agreements (OPA) and the crude for product exchange agreement (SWAP).
He opened tender for the 2015/2016 lifting of crude and condensate, called oil term contract. The successful bidders will boost government’s equity in oil and condensate production.
In apparent move to discourage importation of refined products, Kachikwu has directed the management to ensure that the refineries operate at a minimum of 60 per cent of their installed capacities within 90 days, failing which he threatens to shut any of the refineries that fail to meet up for complete repair.
He described as unacceptable the yearly revenue loss of N10 billion by each of the four refineries due to inefficiency.
Sources say the NNPC chief’s focus is on how to optimise value from the 445,000 barrels of crude per day allocation to NNPC for local refining, even as the GMD described as unfortunate that only the Port Harcourt refinery could meet the 60 per cent target by the end of the year.
According to him, the issue of pipeline vandalism and ageing facilities as reasons behind the refineries’ dismal performance will soon be addressed.
He said: “As at today, the average refining performance is 30 per cent. If by December, the refineries don’t work, I will export crude allocation and import refined petroleum products until we fix the refineries. Right now, the Port Harcourt refinery is showing signs that it will meet the December deadline.
“However, I am not saying that the Warri and Kaduna refineries will not meet the deadline, but I hope they’ll all make it, so that we can continue to utilise our crude allocation to boost domestic refining.”
Oil marketers’ and their new-found patriotism
After holding the nation and Nigerians to ransom over the years, fuel importers under the auspices of Major Oil Marketers Association of Nigeria (MOMAN), have suddenly turned over a new leave. They have become sober and patriotic. Their thinking in the past was that their refusal to import fule would trigger scarcity and that government would would be forced to accede to their requests. But, they have been proved wrong since Kachikwu came on board in the NNPC.
At a forum in Lagos, The Nation sought to know why all filling stations have fuel to dispense in Lagos, even when the N300 billion debts remain unsettled.
The Managing Director, Mobil Oil Nigeria Plc, Mr. Tunji Oyebanji, said nothing has changed substantially on the government’s indebtedness to the marketers. According to him, the stability being enjoyed in the fuel supply chain today is because President Buhari has not said that his administration will not settle the bill. Besides, Oyebanji said the banks have been more flexible and the corporation has been bringing in more fuel and the refineries have started working.
Echoing him, the Executive Secretary, Depot and Petroleum Products Marketers Association (DAPPMA), Mr. Olufemi Adewole, said: “The marketers didn’t hold the nation to ransom. Rather, the Petroleum Tanker Drivers (PTD) made the demand for their due debts to be paid and due to marketers’ poor financial state, they couldn’t pay. President Muhammed Buhari’s government has assured importers of payment, the banks, which were hitherto denying marketers’ funds, have calmed down and have granted some credit facilities to few marketers.
“Check in the hinterland, fuel is only available in the major cities such as Lagos, Abuja, Port Harcourt and Kaduna, among others. There is no fuel in the hinterland because the Product and Pipeline Marketing Company, an arm of NNPC, does more of the supplies as against the previous arrangement. So, what we have now is the concentration of products’ deliveries in cities.”
The President of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Francis Johnson said the commitment and assurance from the Buhari government has restored confidence and encouraged smooth running of affairs.
