President Bola Ahmed Tinubu, last week, reconstituted the board of Nigerian National Petroleum Company Limited (NNPCL). He also removed its Group CEO, Mele Kyari, and Chairman, Pius Akinyelure. Other board members appointed with Kyari and Akinyelure in 2023 were also sacked. In their place, the President appointed an 11-member board, with Bashir Bayo Ojulari as Group CEO/MD, and Ahmadu Musa Kida as non-executive Chairman. He also appointed to chart a new direction for NNPCL is a 6-member, non-executive directors, representing the six geopolitical zones of the country.
The President reportedly reorganized the national oil company in line with section 59(2) of the Petroleum Industry Act 2021. The President said that the restructuring of NNPCL has become “crucial to enhance operational efficiency, restoring investors’ confidence, boosting local content, driving economic growth, and advancing gas commercialisation and diversification”. President Tinubu, therefore, directed the new board to conduct a strategic portfolio review of the NNPCL operations and Joint Venture Assets to ensure alignment with value maximisation objectives.
There is no doubt that the previous board and management of NNPCL did not meet public expectations, even when its commercialisation in 2022, was a call for better performance. Instead of meeting the expectations of Nigerians, the cycle of inefficiency, corruption, and mismanagement reportedly continued unabated. The attitude of some board members worsened the problem of the oil company. That is why they could not meet crude oil production targets.
The appointment of the new board of the NNPCL is a welcome development, provided that it meets the new mandates. It is hoped that the new board, composed of industry professionals, should bring the required expertise and energy to the system that should turn things around. A well-managed NNPCL could serve as the backbone of Nigeria’s economic revival. The new board should wean NNPCL of its opaqueness and absence of transparency.
Let the new board run the oil company as a business concern with aim to make profits to sundry investors. The Nigeria Extractive Industries Transparency Initiative (NEITI) in 2023 reported that Nigeria lost $46billion to oil theft and operational inefficiency between 2009 and 2020. We call on the new board to change this ugly narrative and embrace global best practices.
Globally, state-owned oil companies have been instrumental to their nations’ economic development. The same cannot be said of the NNPC since its inception in 1977. For example, the Saudi Arabia’s oil company, Aramco, is the most profitable company in the world, surpassingly tech giants like Apple and Microsoft. In 2023, Aramco declared a net income of $121.25billion, and profit after tax of $106.2billion for 2024 financial year, its second highest ever net income.
In the same vein, Petrobras of Brazil has driven economic expansion through strategic investments and governance reforms, generating over $35billion in net profit in 2022. Since becoming a limited liability company in July 2022, NNPCL has recorded its highest profit of N3.29trillion in 2023. Not much has been heard of its progress afterwards.
Nigeria, once Africa’s leading oil producer, has for some years now, been struggling to fulfill its production quota stipulated by Organisation of Petroleum Exporting Countries (OPEC). While OPEC figures have often placed Nigeria’s output above 2 million barrels per day, NNPCL had repeatedly fallen short of the target, often citing pipeline vandalism, underinvestment, and decaying infrastructure as reasons for not meeting its OPEC quota.
Nonetheless, Nigerians and industry stakeholders expect the new board to perform exceedingly well. It should, among other things, rebrand NNPCL in such a way that will restore investors’ confidence and resolve the rift between the NNPCL and Dangote refinery over the naira -for-crude agreement. The new board should rise above politics. There also need to ensure that the nation’s major refineries in Port Harcourt, Kaduna and Warri resume operation at full capacity and ensure affordable petrol and diesel prices for Nigerians. Rehabilitation of the refineries will help create more jobs.
Nigerians are eager to see NNPCL conclude its initial public offer (IPO) and have its shares listed in the Nigerian Stock Exchange (NSE). That will give stakeholders a sense of belonging and deepen transparency and accountability in its operations. At the same time, we urge the new board to ensure availability of refined petroleum products as well as energy security. Nigeria can no longer afford to pay high import bills on petroleum products. The NNPCL should be driven by accountability and transparency. It should also make profits for its investors.