• Sat. Sep 30th, 2023

Mele Kyari, NNPC & breaking the 44 years jinx

ByBassey Udo

Aug 29, 2021
Mele Kyari, \new NNPC GMD

By Emmanuel Ononokpono

On July 8, 2019, Mele Kolo Kyari was officially inaugurated by President Muhammadu Buhari as the 19th Group Managing Director of the Nigerian National Petroleum Corporation (NNPC). With the benefit of precedence, no one expected anything from him to set the Thames on fire.

However, in his maiden address, he unambiguously pointed the direction his leadership would take. He promised that his leadership at the state-owned national oil company would be open, transparent and accountable to the Nigerian people.
Two years after, a closer look at the milestones side by side the main goals he set when he took office reflect an achieving leader.

Chief among the goals the Borno born geologist set at his inauguration was to increase Nigeria’s dail crude oil production capacity and national reserves to 3million barrels and 40billion barrels respectively.
To achieve these goals, Kyari galvanized NNPC to rev up exploration in the inland basins, particularly the drilling of the Kolmani River II Well, which culminated in oil finds in commercial quantity in the Upper Benue Trough.
Hope is also rising with the drilling of Kolmani River III Well, which is indicating very high prospect of oil find.
While seismic data collection is ongoing in the Bida and Sokoto Basins, plans are also afoot to re-launch exploration work in the Chad Basin.

To achieve the target of increasing Nigeria’s oil production capacity to 3 million barrels per day, Kyari quickly took aim at thawing the disputes around some controversial oil blocks that had led to production shut-ins.
A case in point was the resolution of the dispute involving Shell and Belema Oil in Belema community in Ogoniland where over 30,000 barrels per day production was shut-in in OML 25. That dispute was effectively resolved by Kyari, to restore production in the oil block.

He also led the Corporation to execute the Abo OML 125 Heads of Terms leading to the resolution of the issues around most of the deep offshore Production Sharing Contracts.
This paved the way for the renewal of OML 125 and further investment in the exploration of that lucrative field to boost the nation’s crude oil production.
Recently, in May 2021, Kyari re-enacted yet another feat when he led the Corporation to sign a series of agreements with Shell Nigeria Exploration and Production Company (SNEPCo), the deep offshore exploration and production subsidiary of Shell Petroleum Development Company (SPDC), and other production sharing contract (PSC) partners to resolve the disputes around another deep offshore block, OML 118.
This development led to the renewal of the operating license of that acreage with the prospect of a new N10 billion investment in the development of the Bonga South-East Field. This will further boost the nation’s oil production and move its towards realizing its targets.
In furtherance of the goal of boosting the nation’s crude oil production, the Kyari-led management at the NNPC has secured a number of alternative funding facilities for the upstream sector exploration and production arm, the Nigerian Petroleum Development Company (NPDC) and some of the Joint Venture partners, to facilitate further development of assets. These include the N875.75 mllion NPDC OML 65 Alternative Funding and Technical Services package with CMES-OMS Petroleum Development Company.

Others are the $3.15 billion Alternative Financing Package with Sterling Exploration and Energy Production Company Limited (SEEPCO) and other partners for the development of NPDC’s OML 13.
The first output of about 7,900barrels per day from the project was achieved on April 1, 2020, while production is expected to peak at 94,000bpd of oil and 542 million satandard cubic feet per day (mmscfd) of gas within four years.

Relatedly, Kyari’s NNPC has turned its attention heavily on the gas sector in keeping with the aspiration of government to diversify the country’s economic base, by transforming the nation into a gas-driven economy.

In this regard, NNPC drove and achieved the Final Investment Decision on the Nigeria LNG Train 7 Project in December 2019.
It is important to note that the project was on the drawing board for over 10 years.
This project is expected to generate over $20billion of revenue to the government over the project’s life cycle, in addition to 10,000 direct and 40,000 indirect jobs.
The corporation followed that feat up with the signing of the Engineering, Procurement and Construction (EPC) contract of the NLNG Train-7 project.
The contract was signed with the SCD JV Consortium comprising affiliates of Saipem, Chiyoda and Daewoo.
Essentially, the execution of the EPC contract signaled the effective commencement of the detailed design and construction phase of the multi-billion dollar project which, on completion, is expected to raise the NLNG production capacity by 35 percent from the current 22 million tonnes per annum (MTPA) to 30 MTPA.
On June 15, 2021, the ground-breaking ceremony of the NLNG Train 7 Project was conducted by President Buhari, marking the commencement of construction work on the project.
NNPC also successfully flagged-off the construction of the 614-kilometre long Ajaokuta-Kaduna-Kano (AKK) gas pipeline project on June 30, 2020. The project, which has been described by President Muhammadu Buhari as a game-changer, is an integral part of the Trans-Nigeria Gas Pipeline (TNGP) with a capacity to transport about 2.2 billion cubic feet of gas per day from the Niger Delta to industrial establishments along the Abuja, Kaduna, Kano as well as other places along the corridor.
The infrastructure designed to feed gas into the AKK – the Escravos Lagos Pipeline System II (ELPS II) and Oben-Obiafu-Obrikom (OB3) gas pipeline are also being aggressively executed and expanded to increase delivery capacity from 1.5billion cubic feet per day to over 3.5BCF/D.
The ELPS II has reached 96.34 percent completion stage.
Kyari also demonstrated prudence when he led the corporation to achieve a $300million reduction in the cost of the AKK Gas Pipeline contract via contract renegotiation from the initial 2.8 billion dollars.

Kyari kept his promise to be transparent and accountable to the people by causing to be published the Audited Financial statement of the NNPC for 2018, the first time ever in the then 43 year old oil company. He owed quickly with the publishing of the 2019 AFS.
The icing on the cake of his series of achievements was recorded last weel Monday when President Buhari announced the publication of the latest Audited Financial Statement (AFS) by the NNPC.
The Statement showed the NNPC, under Kyari’s leadership, recorded another first in its 44 year existence, with the report of a Profit After Tax (PAT) of N287billion.
Kyari attributed this historic showing to cost cutting measures, which hit 30 percent and what he called “drastic changes adopted in the way it (NNPC) does business”.
Further to that, the report showed that general administrative expenses witnessed a 22 percent decrease, while there was a 99.7 percent reduction in the corporation’s loss profile from N803billion in 2018 to N1.7 billion in 2019.
Interestingly, before now it was an oddity for NNPC accounts to be Audited, let alone be published.

There is no doubt, Mele Kyari has gone the extra mile to break the 44-year losses’ jinx that bedeviled the state-owned oil giant and turn it into a profit-making business.

Again, with the Kyari example my personal mantra- *it can be done* was proven true.

Great leaders are impossibilities-blind. All they see is turning things right side up, the disposition that makes them break jinx on history.

Ononokpono, the presenter of a radio series on Leadership Everything Rises And Falls on Leadership”, wrote from Abuja.

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