The Federal Government recently replaced the Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu, with a former Executive Director, Exploration and Production, of the organisation, Dr. Maikanti Kachalla Baru.
President Muhammadu Buhari dissolved the board of NNPC and divested Kachikwu, who is also the Minister of State for Petroleum Resources, of his dual role as GMD of the Corporation.
A new nine-member board has now been composed for the NNPC, with Baru as helmsman. Kachikwu will, however, retain his portfolio as Minister of State, Petroleum Resources, and chair the new board.
A statement by the President’s media aide, Mr. Femi Adesina, said the composition of the new board is in line with the provision of section 1 (2) of the NNPC Act, 1997 (as amended). The President urged the new board to ensure the successful delivery of the mandate of the organisation.
The appointment of a new GMD for the NNPC is generating reactions from stakeholders in the nation’s oil industry. This is understandable because, for some months now, there have been strong speculations that Dr. Kachikwu would be relieved of his position as GMD of the organisation.
Nevertheless, the composition of a new board should not becloud the seriousness of the tasks before the agency. The members should, therefore, quickly settle down and address the tasks before them with sincerity of purpose. The new appointees should continue with the reforms already instituted by the former board. It is good that Kachikwu, who is already abreast with the problems of the NNPC, will still chair the new board. He will need the cooperation of the entire board members to bring the reforms to fruition.
Considering the huge challenges facing NNPC, it is incumbent on the new board to quickly close the huge funding gaps, especially those of its cash call arrears in its Joint Venture (JV) operations, which currently stand at about $3 billion. This is just one of the big tasks that the new board should quickly address when it is formally inaugurated by the President.
Another major task it must take on is how to close the present oil trade deficit that hit a 27-year record deficit of N4.5 trillion in 2015, when compared with a surplus of $1.3 billion recorded in 2014. This deficit means that the value of imported goods and services is greater than that of exports. Also, in recent times, the value of Nigeria’s petroleum export revenue declined from $77.5bn in 2014 to $41.8bn in 2015.
According to the 2016 Statistical Bulletin of the Organisation of Petroleum Exporting Countries (OPEC), the last time the cartel recorded such a deficit was in 1998. Besides, Nigeria’s gross gas production dropped from 86.4 million standard cubic metres in 2014 to 85.3 million in 2015.
We enjoin the new team to restore sanity, accountability and transparency in the operations of the corporation. For many years now, the NNPC has been hugging the headlines for the wrong reasons. Accountability and transparency seem to be lacking in its activities, with many audits uncovering unwholesome practices. Such opacity in its activities should not be allowed to continue.
Nigerians want an efficiently and transparently run NNPC that can command the confidence of the people. Currently, that is not the case, as the corporation is often associated with all manner of malfeasance. In addition to the challenges identified above, we advise the new board to strive to ensure efficiency in the retail business of the corporation – such as the refineries, oil and gas marketing, and equipment leasing – and bring it back to profitability. These are some of the areas that can add value to the operations of the NNPC and endear it to ordinary Nigerians.
Overall, we urge the new board members to work in unison and concentrate on achieving the objectives for which the agency was established. Let them do the very best that they can in the management of this critical national asset. Nothing less will do.