Connect with us


Baru’s transformational reforms In NNPC



By Kingsley Ukah

The Nigerian National Petroleum Corporation (NNPC) has been depicted by its implacable critics as a cesspool of corruption and for a good measure too. Over the years arguably, no agency has the axiomatic Nigerian strand of sleaze been more manifest than the state owned Oil giant whose reputation has been tarnished by unrelenting criticism of its less than transparent operations.

At the height of this reign of impunity and vast corruption, the former Governor of the Central Bank of Nigeria and the present Emir of Kano, Sanusi Lamido Sanusi had in 2014, accused the NNPC of failing to remit $20 billion into the coffers of government. This was during the era of high Oil prices. He had also complained about the lack of transparency in the operations of the subsidy payment regime and was booted out of office for blowing the whistle on corruption.

Recently, Sanusi Lamido Sanusi took a potshot at the present management of NNPC when he said that only an angel may be able to run the Corporation. Sanusi said “I have not seen a change in laws or regulations that will institutionalize changes that make it impossible for things to be done.”

Sanusi’s sabre rattling may play into the narrative that corruption is alive and well under the present administration in spite of the unwavering commitment of the Buhari administration to deal a mortal blow on pandemic corruption, the archetypal monster that has stymied our development. Given empirical evidence and ongoing efforts by the present management of NNPC under the guidance and leadership of Dr. Maikanti Kacalla Baru, the Group Managing Director of the Corporation, Sanusi’s criticism is premised on a lack of full information and therefore misplaced.

Four years out of government is quite a long time. The revered royal father saddled with the onerous task of administering a sophisticated emirate such as Kano may have been so overwhelmed by the task at hand that he is clearly out of touch with reality. And given the not too long enviable reputation of NNPC especially under the past administrations, the use of the brush of corruption to wrongly paint the present NNPC and its management as corrupt may be overlooked by a gullible citizenry.

But it is certainly uncharitable and unfair to throw a spanner in the works especially when Baru and his management are working round the clock to turn around the fortunes of the Corporation. Asking angels to intervene in the affairs of men is not only escapist but defeatist. As a nation, we are blessed with honest hardworking leaders, who though may be in the minority are on daily basis given their best for the good of the nation.

When Baru was appointed the Group Managing Director of NNPC in 2016, he was not under any illusion as to the formidable challenges and task ahead. He inherited a Corporation in decay and in dire need of a new direction. Independent agencies such as the Nigerian Extractive Industries Transparency Initiative (NEITI) had raised the alarm about the lack of transparency and massive corruption in the Corporation. On assumption of office, Baru demonstrated the uncommon determination to steer a new and refreshing course for NNPC. In line with the anti-corruption policy of the Buhari administration, he unveiled a well thought out 12-point agenda designed to cleanse the Augean Stable and reinvigorate the Corporation. The 12-point agenda include the creation of an all-inclusive internal advisory council on security comprising representatives from NNPC, the IOCs, the Unions and security operatives to brainstorm and address host community agitations, implementation of new business models to grant needed autonomy to the strategic business units and autonomous business units within the corporation, provision of directions and control to ensure their growth and profitability. Baru also pledged to continue to explore ways of relieving government from the burden of cash calls obligation and to address and defray the agreed call arrears of the IOCs  and restore Oil and gas production and grow the reserve portfolio.

He also pledged to focus on increasing crude oil production by the Nigerian Petroleum Development Company, NPDC, review all weak contractual agreements and terminate bad ones as appropriate, leverage on equity positions to cause the development of key gas assets for both domestic and export, repair and restore Oil and gas pipeline infrastructure. Baru also promised to improve the refining efficiency of the four existing refineries to pave way for future expansion, pursue diversification of business by refocusing on the implementation of renewable energy programmes and frontier exploration services and to continue to ensure service delivery, entrench the culture of professionalism through transparency and accountability.

The 12-point agenda as enunciated by Baru is ambitious, revolutionary and represents a concerted effort to make a clean break with the past. Under his guidance, NNPC commenced and completed the repair of critical Oil and gas infrastructure leading to the deferment of about 700,000 bopd. The Corporation commenced and completed the repair of the vandalized 36” and 42” IT Export pipeline leading to the restoration of production operations from NNPC/MPN.

In 2016, when he took over the helm of affairs at NNPC, the national daily average production stood at 1.83 million barrel, in 2017, it rose to about 1.88 million barrels and in 2018 the nation had achieved its projected target of 2.2 million barrels of Oil and condensate per day occasioned by the improvement in security and the resumption of production operations in the forcados Oil Terminal (FOT) and Qua Iboe Terminal (QIT) pipelines. By June 28th, 2017, NNPC attained a record peak production of 2.3 million barrels of oil and condensate per day. Under the leadership and guidance of Baru, the repayment agreement for JV cash call arears has been negotiated and executed for arrears has been negotiated and executed for arrears up to end 2015 all the IOC partners in NNPC’s JVCs.

NNPC anchored repayment on incremental production. Also, for 2016, JV cash call shortfall, $400 million was paid to JV partners as a bullet payment in April, 2017 – with the balance to be paid in twelve installments. This commitment has rekindled the confidence the nation’s JV partners in pursuing new projects, thus enabling the transition into the self-funding models for cash-calls financed by NNPC/CNL JV of project Cheata which was oversubscribed. Driven by the desire to save cost, NNPC renegotiated upstream contracts and obtained discounts of over $2billion from various service providers to stem high production costs. In addition, Baru ensured the cancellation of all non performing agreements and continued to pursue all outstanding payments due to government.

In the gas sector, NNPC has significantly increased gas supply to power plants and industries. This achievement was made possible as a result of the completion of the repairs of vandalized 20” ELPS – A pipeline which ramped up Chevron Escravos Gas Plants that were hitherto shutdown. These include Oredo Gas Plant, Sapele Gas Plant, Ovade Gas Plant and Oben and NGC Gas Compressors. Baru has addressed the issue of condensate evacuation that had restricted the issue of condensate evacuation that had restricted the ramping up of gas supply from Oben, Utorogu and Ughelli gas plants. NNPC have also commissioned NPDC’s Utorogu NAG-2 and Oredo EPF-2 gas plants.

Under the leadership and guidance of Baru, there has been exponential growth in domestic gas supply. NNPC has also made significant progress in the seven (7) critical Gas Supply Development projects with approval of consultants to support the projects.

In the downstream sector, NNPC stabilized the market with sufficient product availability nationwide. Through the concerted efforts of Baru and his team, the modest refining efforts of NNPC and the DSDP Scheme saved the nation about 40 billion in 2017. The resuscitation of products transportation pipelines network has enabled NNPC to move products to depots at faster and cheaper rates.

In spite of the string of impressive achievements scored by NNPC under the guidance of Baru, challenges still remain. The issue of subsidy payment has remained a recurring decimal. There is a consensus of opinion that racketeering which is widely believed to have bedeviled the subsidy regime has impoverished Nigerians. Despite aspersions cast on the NNPC from certain quarters, Baru insists that he and his team are above board in their dealings. The present NNPC management has consistently stated that all subsidy claims and entitlements by NNPC are duly verified and approved by PPPRA and relevant certificates issued.

In the same vein, Minister of Finance, Kemi Adeosun, has explained the NNPC is under recovering costs being the sole importers of the petroleum products which it also sells below the cost price. In defence of NNPC and the truth, she stated that technically there is no longer subsidy payments to Oil and marketers as in the past since the NNPC bears the cost of the difference between the N145 pump and the actual landing cost of the product which in some cases stand at N180 per litre. She said “Now, when there is talk of payment of subsidy, technically there is no subsidy, but there is under-recovery.”

The failure of the four local refineries to produce enough fuel for local consumption has cast a long shadow on the concerted efforts by Baru and the Ministry of Petroleum Resources to bring about a positive change. For years the refineries have been largely comatose. Within the last three years, a lot of work has been done to revive obsolete facilities in the sector. The petroleum ministry under the leadership of Ibe Kachikwu and the NNPC under the guidance of Baru are working hard to re-position and revamp the refineries  through massive refurbishing of the refineries and strategic partnerships. By 2019, it is expected that these concerted efforts will lead to  Nigeria being self-sufficient in refining petroleum products.

The achievements recorded by NNPC under the guidance of Maikanti Baru was made possible through the concerted effort of a Nigerian patriot not by an angel. The situation in NNPC is not perfect, no human institution is put clearly  Baru and his 12-point agenda is beginning to yield the desired results, to spur a paradigm shift. It was in recognition of his patriotic service to Nigeria and his untiring efforts to reposition the NNPC that he was awarded the Forbes Best of Africa Oil &Gas Man of the Year Prize. According to Forbes, it had followed with keen interest the rising profile and impressive career path of the NNPC GMD through the years. Forbes further stated: “For these and other landmark achievements which you have recorded throughout your enviable career, your nomination for this Prestigious Forbes 2017 Award has been approved by Forbes Custom’s Award Committee.

These and other prestigious awards in recognition of the ongoing revolution in NNPC, it is hoped will spur Baru to greater heights as he seeks to re-position NNPC and bring it to global acclaim in the service of Nigeria and humanity.

 Ukah wrote in from Lagos 

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


DSO Nigeria: Beyond Devil’s Advocates​,​ by Hamid Hendrix



Freedom without responsibility continues to pose a great challenge to the realization of the full potentials of our democratic dispensation and it is rather unfortunate that foremost beneficiaries of such liberty are too often also the major culprits. Though measures have been taken to curb the excesses of abusers of civil liberties it is obvious that the more needs to be done to safeguard public interest.

One area where this menace continues to rear its ugly head is in the rowdy ranks of human rights advocacy groups which were once credited with facilitating the successful liberation of several African nations from the scourge of oppressive military regimes but are now becoming misfits in democratic settings due to loss of focus and desperation to remain relevant.

Rather than shifting their attention from the initial agenda of campaigning for democracy to the equally relevant aspects of ensuring free and fair elections and dividends of democracy, several of the advocacy groups have been overtaken by pecuniary impulses that turned them into rentable rabble-rousers, willingly lending themselves to the begrudged and disgruntled elements. Such groups end up mired in miscellaneous advocacy of discordant diatribes as they drift into charlatanism under the counterfeit canopy of human rights advocacy.

A typical example of such mischievous misadventures masquerading as human rights advocates is the recent statement issued by Human Rights Writers Association (HURIWA) claiming that “under the President’s nose a minister allegedly mismanaged N2 billion from the National Broadcasting Commission for digitisation of broadcasting but till now both the minister of information and DG of NBC are walking the corridors of power free.”

This single sentence of spurious speculation casting unsubstantiated aspersions on the unblemished reputation of the Minister of Information, Alhaji Lai Mohammed and the Director-General of the Nigerian Broadcasting Commission (NBC), Malam Ishaq Modibbo Kawu and attempting to discredit the highly–rated successful switch over to digital broadcasting (DS0) in Nigeria was purported to be an exercise in human rights advocacy ! Incredulously, this fabricated defamation was an isolated insertion lacking relevance or corroboration in a libellous list of politically-motivated wild allegations against the person and administration of President Muhammadu Buhari contrived by one Emmanuel Onwubiko, coordinator of the so-called human rights group.

It is manifestly outlandish to portray the deliberate misrepresentation of the nationally acclaimed resuscitation and diligent implementation of the previously paralysed DSO project and callous assassination of the character of the two government functionaries responsible for such an achievement as a human rights infringement, just as it is absurd to smear the hitch-free scheduled switch over to digital broadcasting across the country with the brush of “mismanagement” of a bogus two billion naira. These malicious distortions of verifiable facts amount to gross violations of the principle of public accountability, which is a fundamental right of citizens in a democracy.

To set the records straight, it is worth recalling that the DSO was formally launched in Jos, Plateau State, in April 2016, followed by the FCT, Ilorin, Kaduna, Enugu and Osogbo while the process of installation of equipment for the roll out in Gombe and Delta states have reached advanced stages. The NBC expects to achieve DSO roll out in 12 states soon. This impressive performance was the outcome of zealous commitment of Minister Lai Mohammed and NBC DG Modibbo Kawu to break the four-year jinx that stalled the project prior to the debut of the Buhari Administration’s change agenda.

For HURIWA to single out this glorious chapter in the remarkable record of progress in the nation’s broadcast industry for a vicious vendetta is a pathetic pointer to the ulterior motives that have hijacked the group and falsified its declared mission. In fact, a cursory review of its recent outings reveals a revolting surrender to the most ridiculous and irrational advocacies imaginable, such as campaigning against the ban on production of the much abused codeine cough syrups because it has “led to great financial misfortunes for over 30 legitimate pharmaceutical companies,” urging the Federal Government “not to stop expectant women and nursing mothers from participating in National Youth Service Corps (NYSC),” appealing to “ the government of the United States and the European Union to impose sanctions on Nigeria” and dismissing the terrorist classification of Nnamdi Kanu’s IPOB “ as a charade and a plot to initiate violent crackdown on the members of this substantially unarmed and peaceful group”.

Even the EFCC has dismissed the occasional anti-corruption posturing of HURIWA as “ethnic and political agenda by some mischief makers masquerading as human rights writers” in one of its rebuttals of the pseudo human rights advocacy group’s capricious campaigns. This was also endorsed by Emmanuel Otairu of the Centre for International and Strategy Studies, Abuja whose article titled “HURIWA As IPOB’s NGO Arm” in The Nation edition of September 18, 2017 concluded that it was “ a tool for extortion, paid activism, ethnic propaganda mouthpiece and most recently a terror organization’s NGO arm”. The steadily expanding coverage of the DSO in Nigeria under the diligent implementation of Information Minister Lai Mohammed and DG NBC Ishaq Modibbo Kawu has surely switched off anomalous advocacy groups like HURIWA along with analogue noise.

-​ HAMID HENDRIX is a communications writer in Abuja

Continue Reading


Repositioning the NNPC and Baru’s knack for openness



By Kingsley Ukah 
It will take a great deal of sustained and concerted reforms to ensure that the Nigerian National Petroleum Corporation (NNPC) runs effectively and efficiently in line with global best practices; and for it to serve, without interruptions, the common good of Nigerians.

For decades, the oil corporation has consistently been in the bad books of Nigerians who see it as a behemoth that has been appropriated by successive administrations to service political interests and private ends.

However, the decision of the NNPC Group Managing Director (GMD), Dr. Mikanti Baru, to continually open up the corporation for public appraisal and promote transparent and accountable management is novel in the ecology of the Federal Government’s anti-corruption crusade. Baru is committed to seeking strategic partnership where necessary in a deliberate bid to erase the negative perception that the NNPC cannot achieve the desired results or apply standard best practices in operations.

There is no doubt that leadership is key to every organisation that seeks to succeed. Since coming on board, the GMD has committed himself to doing things that will give the corporation a positive outlook. But one must quickly admit that it is not always easy turning things around in a corporation where corruption has been entrenched and reforms frustrated for years. But what is going well for Baru is his willingness to take on challenges and search for solutions. Apparently, that is why he is succeeding.

That Baru has chosen not to grandstand over the recurring question on the actual volume of Premium Motor Spirit (PMS), popularly known as petrol, being consumed in the country, says much about his ability to be above the fray.

He has not been imprudent in his disposition. He has not created any ballyhoo over the matter that has been understandably politicized.  There is a sense in which the management of the nation’s oil sector has become a political decision under the watch of successive federal government.

But credit must be given to the exceptional leadership and sincerity of purpose that Baru has brought to bear in the management of the NNPC presently. For instance, as part of its expanding strategic partnership, it is a welcome development that corporation has agreed to work with the World Bank and the Federal Ministry of Finance to finally lay these decades of concern about the opacity in the public finance management of the subsector in which the corporation plays a very significant role to a rest.

It gladdened the heart when I heard the Chief Operating Officer (COO) Downstream, NNPC, Mr. Henry Obih, say that the decision of the corporation to abide by the directive of the National Executive Council (NEC) to work with the finance ministry and world bank to finally unravel this mystery.  That such efforts have been frustrated in the pas attests to the financial discipline that President Muhammadu Buhari has inculcated into governance. On this score, the leadership of Baru has demonstrated its support for the president’s philosophy of prudent financial management. He has shown by his disposition that he has nothing to hide.

In a widely reported Nigerian Oil and Gas Conference and Exhibition held recently in Abuja, the NNPC COO, said that: We (the NNPC) are presently in a joint project with the Federal Ministry of Finance. We are doing a study around consumption to determine the actual consumption by the people. He explained that “we have to put it on scale to see what we call the daily load or the evacuation, as against the actual consumption, that is, what people go to the pump every day to buy for their cars and generators at homes and for other uses.”

Obih said: “This is why the National Economic Council has mandated that we work with the Federal Ministry of Finance. We also had meetings with the World Bank about six weeks ago, and we are trying to progress in a global study that would help us get around the actual numbers of what we consume in Nigeria.”  This is forward-looking. While awaiting the outcome of the tripartite investigation, it is equally good that the NNPC has chosen to set some records straight against the backdrop of the ongoing campaign of calumny sponsored largely by the mafia in the sector.

Different consumption figures had been put out there in the social media to deceive the unsuspecting public. This tripartite intervention should, in the interim, put to rest the associated concerns while the investigation will, expectedly, assuage the frayed of Nigerians. Meantime, in terms of daily truck out from depots around the country and in terms of the records of the Petroleum Product Pricing Regulatory Agency (PPPRA) and the Department of Petroleum Resources (DPR) the NNPC trucked out 48 million litres daily in 2016 and 50 million litres in 2017.

The problem of rising volume of fuel is compounded by cross-border smuggling, because Nigeria remains the cheapest source of PMS in the West African sub-region. Unfortunately, Nigeria has a network of oil mafia that cuts across the entire chains of oil businesses in the country.  The mafia group is very big and powerful and has been operating for decades. It is also feeding fat on segments of the country’s pipeline network. It will take consistent and persistent efforts to defeat the oil cartel. At every point, it is fighting back and this has made the work of the Baru-led NNPC a little bit more difficult.

Obih, confirmed the challenges facing the corporation. Read him: “But again, one significant challenge is the fact that we have cross-border smuggling. Nigeria remains the cheapest source of PMS in the West African sub-region. All our neighbouring countries are selling at over 200 per cent high of the price that we pay at the pump. We have challenges in the pipelines that run through land, specifically, the System 2B, for instance; the one that runs around Lagos. It remains a big challenge, because there is a mafia that lives and feeds on those pipelines.

But it is not entirely bad news about the NNPC. Good things are happening under Baru as revealed by the COO, especially in the area of Joint Venture cash call payments. According to him, “What is heartening this year is that we can, at least, say that in a couple of the areas, we can see attempt to address them. For as long as I have been in this industry, we have been discussing cash calls as a never-ending issue. I think we were able to sit down together as an industry and government to try and tackle that issue and we should not underrate the importance of that.

“What is of significant today is that argument is off the table. For the first time, we finished a year without NNPC owing cash calls. That just essentially opens up the appetite. What that has done is that it opens up the appetite to have a conversation about investment. Nigeria is competing for capital with every other country in the world and sometimes we forget that and think that we are world unto ourselves, but the reality is that each of these companies operates in 20, 30, 80 countries and people are competing for capital. The whole JV process, we all need to put our hands on the plough to ensure it does not derail. We cannot take it for granted that we have a funding structure that works and assume it will continue to work.”

It is incumbent on Nigerians, especially stakeholders who have been yearning, over the years, for the NNPC to truly deliver on its mandate, to support the ongoing process to reposition the corporation. Baru can deliver with the right support and climate. However, the NNPC must now ensure that a strong technology-driven mechanism is put in place to ensure the real-time monitoring of the pattern of consumption in the country. This is what should engage attention and not petty issues that distract.

Ukah wrote in from Lagos
Continue Reading


Managing crises: The Lagos example, by David Adegoke



An oil truck explosion of apocalyptic magnitude occurs in Lagos, fatally charring a frightening number of lives and maiming several others. Many more vehicles are burnt, some to ashes, with scores of stampeding citizens severely bruised in the process. Pronto, denizens of social media go into action, sending pictorial, video and textual coverage of the gory scenes into the virtual space.

Soon, the phones of Nigerians begin buzzing with calls and messages from anxious compatriots in the diaspora eager to know the whereabouts of their loved ones in the country. Are they caught in the blaze? Are they close to the area of the accident? Are they safe? Where no immediate response follows, there is an urgent request to send back a message to reassure the agitated inquirer.

But in the midst of this bedlam, something else causes a stir: the sudden appearance of the governor, Akinwunmi Ambode, within hours of the tragedy, attired in simple short sleeves and trousers looking like jeans. Those around are surprised. Why? There are two reasons: Nigerians are not used to seeing their leaders arrive at locations of disasters just moments after such mishaps break.

Secondly, because he isn’t dressed in suit or agbada which is the ‘uniform’ of their leaders, there is more curiosity surrounding the presence of the man. Word goes around that Ambode has got to the scene without notice, without fanfare. That swells the crowd of onlookers. The entire development deepens the bond between the led and the leader who would make a difference in governance by his acuity of empathy when the people are bereaved.

A governor may build great bridges and roads along with other physical infrastructure. That would put him at par with others who do so too. A leader may deliver moving speeches such as the Gettysburg Address by US Civil War President Abraham Lincoln. But he would only be in the circle of other orators like the ancient Roman senator and late President Kwame Nkrumah of Ghana. None of these distinguishes him from the pack. You don’t excel if you walk the beaten track; history would trap you among the ‘also-ran’ group. It’s a footnote category, hardly reckoned with on the pages of a country’s annals.

When he showed up at the scene of sorrow, blood and tears (to quote the lyrics of one of legendary Fela’s songs), Ambode brought both hope, comfort and lessons in empathetic leadership that is missing in our clime. Assessing the situation, the governor commiserated with the victims and took solace in ‘’the fact (his government’s prompt response) was able to save more lives’’. He added: ‘’We will continue to do our best and ensure that we mitigate things of this nature in future…Nobody knows when this kind of incident will happen next but the most important thing is that our response time should be up and running and able to save lives.’’

Observers have commended the Lagos administration for putting in place a disaster management infrastructure that made it possible for rescue trucks to get to the scene within 10 minutes. This was fast, according to experts, who argue that given our environment and the choked traffic of the hour the casualty statistics would have been astronomical, exceeding the nine lives lost and over 50 vehicles burnt.

Truly, it could have been worse with a fuel truck carrying 33000 litres of PMS on the loose that fateful evening. “’That was death on the prowl,’’ as a commentator Tope Ajayi put it, even while he advised Ambode to continue to invest more in the personnel and agencies saddled with accident response functions. And seeing how the Lagos model has worked quite efficaciously, the writer admonishes that ‘’other states should learn from Lagos.’’

But as we said at the beginning, if you had all these security and rescue paraphernalia in place without a human face, you’d end running a normal system, undistinguished by the exceptional touch that makes a difference. That evening the Lagos State governor provided the uniqueness we need in leadership and governance in Nigeria.

Ify Onyegbule, a well known radio presenter in Lagos, captured the superlative performance of Ambode in these hardly exaggerative terms on her Facebook timeline: ‘’ If you ask me, I think AkinwunmiAmbode would do well as Nigeria’s President! He didn’t wait till morning before going to the scene of the disaster. He never went to put on his danshiki and buba plus fila to go there just so he looks nice on camera. He never asked that a red carpet be spread so he can walk on it at the scene.

Ambode didn’t get there blaming the tanker parked or the danfo thatthe brakes failed! In fact the presidency needs to come and the Lagos model…quote me on this! Enough of all the rubbish going on in Nigeria!’’

Our leaders must not pride themselves in adulation when they provide us the dividends of democracy as we often term them. No doubt we shall always hail them when they do so. But there is more to administering human beings, just as there is more to being a father in the home than merely supplying money for the upkeep of the family. How about meeting the emotional demands of the wife and children, which represent the fiber holding the home? Nigerians, like the spouse and her children, only honour the male head of family they can identify with.

They don’t cherish a distant leader, as it were. Of course, they expect he must fend for them. But the point is that he must be there, or show up for them at a short notice, notably when they are grieving. At that stage, nothing else matters, not even the multi-billion naira state-of-the-art projects you may have given them!

Ambode’s succinct understanding of these dynamics of leadership is what is earning him accolades.
But we should realise that in the long run, greater applause is for the government of which Ambode is a member. For, he without an equally committed group of administrators would have earned little praise. He has an accompaniment of capable accident management and rescue agencies that performed a yeoman’s job last week on Otedola Bridge.

What is the lesson here? Government must build on that success by strengthening such institutions for the security and welfare of the people of the state as they are poised to stand the burgeoning status of Lagos as Africa’s foremost megacity of our era. In other words, it is durable institutions of state that accord honour to government. That was what enabled us all to salute the Lagos government last week.

*Adegoke, a journalist, wrote from Surulere.

Continue Reading