With a risky international oil market in 2024 tied to geopolitical tensions and different native challenges reminiscent of oil theft and pipeline vandalism amid the strain to up oil manufacturing ranges, the NNPC Ltd. underneath the management of Mallam Mele Kyari has successfully navigated the challenges with many milestone achievements to point out. The state-owned oil agency revitalised 60,000-barrel-per-day, Port Harcourt Refinery, which had been moribund for over 30 years and thru stringent monetary administration methods, declared N3.297 trillion revenue for the 2023 monetary yr, the best in its 46-year historical past. Whereas the challenges stay monumental, the NNPC Ltd. certainly deserves accolades for the grounds coated thus far, Emmanuel Akanni stories
In a yr marked by financial challenges and international uncertainties, Nigerian Nationwide Petroleum Firm Restricted, underneath the visionary management of its Group Chief Government Officer, Mele Kyari, has emerged as a beacon of hope and resilience for Nigeria.
By groundbreaking initiatives and progressive options, Kyari has redefined Nigeria’s oil and fuel sector trajectory, succeeding in positioning NNPC Restricted as a shining mild amongst Authorities establishments.
Like a grasp mariner, Kyari steered the nationwide oil firm by way of troubled waters, navigating in opposition to the tide with out succumbing to the storm.
After all, the revival of the previous Port Harcourt Refinery, after over three a long time of dormancy, is an ideal instance of the can-do spirit of the NNPCL underneath Kyari.
Revitalising Port Harcourt Refining Firm For many years, efforts to revive the Port Harcourt Refining Firm (PHRC) appeared unattainable, however underneath Kyari’s management, this long-elusive purpose has been realised. The reopening of the 60,000-barrel-per-day-old refinery marks a pivotal second in Nigeria’s journey towards vitality self-sufficiency and showcases Kyari’s dedication to reshape the nation’s vitality panorama. Dormant for over 30 years, the previous Port Harcourt refinery, in-built 1965, is now again in operation, producing 1.4 million litres of PMS, 900,000 litres of kerosene, 1.5 million litres of diesel, and different crucial merchandise each day.
This revival follows the Federal Authorities’s $1.5 billion funding in 2021, which NNPCL successfully managed to ship the long-overdue turnaround. Scepticism surrounding this achievement has been silenced by testimonies from labour unions, refinery employees, and trade consultants, all lauding the refinery’s clean operations. In the meantime, the restore of the brand new 150,000-barrel-per-day refinery is over 90 per cent full, promising a mixed refining capability of 210,000 barrels per day upon completion. NNPCL’s Group Government Vice President, Downstream, Isiyaku Abdullahi, highlighted the ability’s state-of-the-art upgrades, making certain the rehabilitation aligned with international requirements. This milestone units the stage for not solely home self-sufficiency but additionally the export of refined petroleum merchandise, boosting Nigeria’s economic system and vitality sector.
Championing Various Vitality SourcesKyari’s foresight in selling Compressed Pure Fuel (CNG) instead vitality supply has offered Nigerians with a cleaner, more cost effective choice amid hovering international vitality costs. This initiative aligns with international vitality transition developments whereas addressing native vitality calls for, providing rapid aid to residents and companies alike.
The NNPC underneath Kyari has perfected plans to ship 12 CNG Mom Stations and Mini LNG Vegetation as a part of efforts to spice up the present 1.6bscf of fuel provide for the home market.
NNPCL’s Chief Company Communications Officer, Olufemi Soneye, had on July 4, 2024, quoted Kyari as declaring that the drive to deliver CNG nearer to Nigerians had since commenced and was irreversible.
Talking through the simultaneous commissioning of 12 CNG stations in Abuja and Lagos, Kyari promised large deployment of CNG stations nationwide.
“There’s merely no method to flip again on delivering CNG for all Nigerians. It’s the proper factor to do. Is it late? Sure, however we are going to make progress, we are going to cowl the hole to make sure that the volatility we see with Premium Motor Spirit (petrol) doesn’t apply to fuel,” Kyari acknowledged.
President Bola Tinubu had mandated that a million CNG automobiles ought to hit Nigerian roads by 2027 and in furtherance to that, the Federal Authorities, by way of the Small and Medium Enterprises Improvement Company of Nigeria (SMEDAN), lately introduced plans to transform 100,000 automobiles to CNG inside the subsequent 18 months.
SMEDAN stated the initiative, which is in collaboration with the Presidential Committee on the Compressed Pure Fuel Initiative and Rolling Vitality, was targeted on decreasing prices for small and medium enterprises whereas supporting Nigeria’s transition to cleaner vitality.
The NNPCL boss counseled President Tinubu for offering the wanted assist to drive home fuel utilisation aimed toward delivering cleaner and cheaper sources of vitality to Nigerians.
Whereas assuring that the NNPC Ltd. would proceed to ship extra strategic fuel tasks for the advantage of Nigerians, Kyari reaffirmed the dedication of the government-owned firm to ensure the nation’s vitality safety.
The Managing Director, NNPC Retail Restricted, Mr Huub Stokman, revealed that within the subsequent yr, NNPC Retail would have launched over 100 CNG websites, together with 16 NNPC Fuel Advertising and NIPCO Fuel JV websites.
“CNG supplies Nigeria with inexpensive alternate options to present accessible gas merchandise. It is going to be about 40% cheaper than petrol in Nigeria and with continued investments, it’s going to change into a big a part of our vitality combine,” Stokman added.
Already, NNPC Fuel Advertising Restricted, a subsidiary of NNPC Restricted, in partnership with NIPCO Fuel Restricted has developed an Auto-CNG rollout plan for the development of 35 CNG stations throughout the varied geographical zones of Nigeria.
The Chairman of the NNPC Board of Administrators, Chief Pius Akinyelure and the Minister of State for Petroleum Assets (Fuel), Rt. Hon. Ekperikpe Ekpo, backed Kyari’s CNG investments, expressing optimism that CNG adoption would foster financial advantages, create jobs, stimulate native economies, assist scale back emissions, and fight local weather change.
Additionally, as a part of its efforts to speed up CNG adoption, NNPC Retail Restricted (NRL), a subsidiary of NNPC Ltd, lately sensitised over 1,000 auto mechanics by way of a complete consciousness initiative. The sensitisation train demystified the method of changing gasoline-powered automobiles to CNG and inspired the adoption of sustainable vitality options.
“We imagine that sensitising mechanics on the significance of CNG adoption is crucial to attaining Nigeria’s long-term vitality objectives. Whereas this engagement targeted on elevating consciousness, we urge artisans to actively pursue the abilities required to contribute to this transformative shift towards cleaner and extra inexpensive gas choices.
This initiative represents a vital step in advancing the nation’s transition to a cleaner, extra sustainable vitality future,” Baba Shettima Kukawa, Government Director of Retail Operations & Mobility at NRL, stated.
Supporting personal sector development Kyari additionally performed a pivotal position in supporting the Dangote Refinery, Africa’s largest single-train refinery, by securing a $1 billion mortgage backed by NNPC’s crude reserves.
This strategic transfer not solely addressed liquidity challenges but additionally ensured the profitable completion of Nigeria’s first personal refinery. It underscores Kyari’s dedication to fostering public-private partnerships that ship long-term worth to the nation.
The NNPCL boss considers the funding within the Dangote Refinery as a strategic transfer aimed toward strengthening home gas provide.
“A strategic choice to safe a $1 billion mortgage backed by NNPC’s crude was instrumental in supporting the 650,000-barrel-per-day Dangote Refinery throughout liquidity challenges, paving the way in which for the institution of Nigeria’s first personal refinery. This initiative underscores NNPC’s dedication to fostering public-private partnerships that drive nationwide improvement,” Soneye, the NNPC spokesman, stated at an Vitality Relations Stakeholders Engagement in Abuja.
Recall that in September 2021, the NNPCL proposed to amass a 20 per cent stake within the Dangote Refinery for $2.76 billion, with an preliminary fee of $1 billion made to the Dangote Petroleum Refinery and Petrochemicals Free Zone Enterprise (DPRP FZE). Nonetheless, because of restructuring and monetary challenges, NNPCL’s stake was later decreased to 7.25 per cent as of December 2023.
Defending the choice to cap the Dangote Refinery funding to 7.2 per cent, the NNPC spokesperson who featured on Berekete Household Radio, stated the state-owned vitality agency decreased its stake in Dangote Refinery to put money into CNG.
“The explanation for decreasing our stake in Dangote Refinery is as a result of we needed to put money into CNG. We noticed that CNG could be very low cost and everywhere in the world, persons are investing in clear and cheaper different vitality, ” he defined.
“That’s the reason the NNPC is constructing completely different CNG stations in all places. We perceive that with N10,000, Nigerians can fill their automobiles and use it for 2 weeks. We realised that fuel is cheaper in Nigeria, why don’t we put money into it?”
To additional make sure the operational success of the Dangote Refinery whereas enhancing the nation’s home fuel utilisation, the NNPC Fuel Advertising Restricted (NGML), a subsidiary of the Nigerian Nationwide Petroleum Firm (NNPC) Restricted, has lately inked a Fuel Sale and Buy Settlement (GSPA) with Dangote Petroleum Refinery and Petrochemicals FZE.
Below the phrases of the settlement, signed by the Managing Director, NGML, Barr. Justin Ezeala and the President/CEO of the Dangote Group, Aliko Dangote, NGML will provide 100 million normal cubic ft per day (MMSCF/D), 50MMSCF/D being agency provide and the remainder 50MMSCF/D interruptible pure fuel provide to the refinery for an preliminary interval of 10 years, with choices for renewal and development.
This, amongst different situations, cemented NNPCL’s place as a robust pillar of assist for its personal sector companions.
Reaching historic profitability For the primary time in a long time, NNPC declared a revenue underneath Kyari’s stewardship—a groundbreaking achievement within the firm’s historical past. Moreover, NNPC has already surpassed its revenue projections for 2024, reflecting the influence of strong monetary and operational reforms spearheaded by Kyari.
In 2021, NNPC declared revenue in its operations for the primary time. From a loss place of N803 billion in 2018, it decreased the loss additional all the way down to N1.7 billion in 2019.
Nonetheless, in 2020, it posted its ‘first-ever’ revenue of N287 billion, then in 2021, it recorded an N674.1 billion revenue and in 2022, the revenue grew to N2.548, an unprecedented achievement in its monetary efficiency.
In an organization the place profitability was like an anathema, Kyari has bucked the development and adjusted the narrative by posting revenue year-on-year.
In August 2024 when the NNPCL launched its 2023 Audited Monetary Assertion, it declared a web revenue of N3.297 trillion on the shut of the monetary yr which resulted in December 2023, a rise of over N700 billion (28%) when in comparison with the 2022 revenue of N2.548 trillion.
The N3.297 trillion revenue declared for 2023 is the best because the firm’s inception, 46 years in the past. This, in accordance with consultants, is a large testomony to Kyari’s purposeful management and sound administration capability.
The Chief Monetary Officer of the Firm, Mr. Umar Ajiya, remarked that posting such spectacular returns demonstrated NNPC Ltd’s dedication to sustaining profitability and supporting the attainment of nationwide vitality safety as stipulated by the Petroleum Trade Act (PIA) 2021, and by extension, as anticipated by the corporate’s shareholders.
“Our fiscal efficiency displays each strategic foresight and operational resilience. Regardless of inherent challenges of our operational and financial atmosphere, we’ve improved the productiveness and the monetary efficiency of this nice firm,” Ajiya acknowledged.
Stabilising economic system amid crisesAmid a crucial international trade disaster, Kyari secured a $3 billion Gazelle mortgage to stabilise the nation’s funds and bolster the vitality sector, aiding efforts to navigate complicated financial challenges.
In December 2023, the NNPC secured a $3bn ahead sale settlement, pledging 90,000bpd from Manufacturing Sharing Contract property to cowl future tax and royalty obligations.
The $3 billion crude oil compensation mortgage from AFREXIMBank is to assist the Federal Authorities attend to a few of its greenback obligations, help the Central Financial institution of Nigeria in stabilising the international trade market, and supply funding for NNPC.
As of the top of 2023, $2.25 billion had been drawn from this facility, with repayments scheduled to start by mid-2024.
This intervention highlights NNPC’s strategic significance as a stabilising power in Nigeria’s economic system.
Offering particulars in regards to the deal within the doc titled, “Every little thing it’s worthwhile to know in regards to the NNPC Restricted’s $3.3bn mortgage, often known as Challenge Gazelle,” NNPC stated, “It is a financing settlement secured by NNPC Restricted to prepay future royalties and taxes to the Federal Authorities.”
The corporate additionally acknowledged that it adopted a cheaper price benchmark for the $3.3bn crude-for-cash mortgage to scale back the chance of default and guarantee monetary stability.
Giving particulars on the benchmark oil worth, the corporate stated the ability used a conservative crude worth of $65/barrel to calculate the allotted crude to be produced and bought.
NNPC additionally stated repayments had been strategically deliberate and tied to future oil gross sales, with conservative pricing in oil gross sales contracts mitigating the dangers related to oil worth volatility.
Accelerating fuel pipeline tasks to energy Nigeria’s vitality future The NNPCL has additionally made vital strides in consolidated efforts aimed toward delivering crucial fuel pipeline infrastructure throughout the nation to reinforce fuel provide and drive financial development. On the forefront is the Ajaokuta-Kaduna-Kano (AKK) Fuel Pipeline Challenge, a 614-kilometer pipeline able to transporting 2.2 billion cubic ft of fuel each day. As of December 2024, the mission is reported to be roughly 80 per cent accomplished, with vital sections already laid and linked, promising to hyperlink southern fuel reserves to the economic hubs of northern Nigeria. Nonetheless, the NNPCL is now projecting that the mission shall be finalised by the primary quarter of 2025.At completion, this mission is anticipated to assist the institution of three new gas-fired energy crops in Abuja, Kaduna, and Kano, that are anticipated to generate a complete of three,600 megawatts (MW) of electrical energy. It’s anticipated to supply a dependable supply of pure fuel, facilitating industrialisation in central and northern Nigeria.
One other milestone is the close to completion of the Obiafu-Obrikom-Oben (OB3) pipeline, a key part of Nigeria’s fuel community. The OB3 pipeline will play an important position in bettering fuel provide to energy crops and industries, addressing long-standing challenges in Nigeria’s vitality sector. NNPCL’s progress on this mission underscores its dedication to closing infrastructure gaps and making certain a seamless circulation of pure fuel to crucial areas of want.
On the worldwide entrance, NNPCL has additionally ramped up collaboration on the Trans-Saharan Fuel Pipeline (TSGP), a transnational mission designed to export Nigerian fuel to Europe by way of Niger and Algeria. With feasibility research concluded and bilateral agreements superior, the mission is nearer than ever to changing into a actuality. This initiative not solely goals to diversify Nigeria’s fuel export markets but additionally positions the nation as a key participant in addressing Europe’s vitality wants.
Domestically, NNPCL has championed the growth of fuel infrastructure to assist energy era, industrialisation, and clear vitality adoption. By its “Decade of Fuel” agenda, the corporate has invested closely in growing native markets and enabling industries to leverage pure fuel. These efforts have bolstered Nigeria’s vitality safety and laid the inspiration for financial resilience, cementing NNPCL’s position as a transformative power within the nation’s vitality sector.
Past Oil: NNPCL’s Groundbreaking Electrical energy Tasks Other than its efforts inside the oil and fuel house, NNPCL can also be extending efforts to ship on complicated energy initiatives. With vital progress in each the GIPP and MEPP, NNPCL just isn’t solely bridging vitality gaps. With a $1 billion fairness contribution to the GIPP mission, NNPCL is demonstrating its dedication to enhancing the nation’s vitality capability. Developed in partnership with China Engineering & Equipment Company (CMEC), the 1,350 MW GIPP consists of three energy prepare blocks of 450 MW every. The mission’s groundbreaking ceremony in August 2023 marked the beginning of a transformative endeavour, with the primary part nearing completion by December 2024. The GIPP is a centrepiece of NNPCL’s broader technique to spice up energy era and scale back Nigeria’s reliance on erratic electrical energy provide.
The mission highlights a synergistic partnership between NNPCL and international vitality leaders, with CMEC dealing with Engineering, Procurement, and Development (EPC). As soon as totally operational, the plant will present a sustainable answer to Nigeria’s vitality calls for, supporting industries and households alike whereas catalysing financial development. Complementing the GIPP, NNPCL has additionally delivered the 50 MW Maiduguri Emergency Energy Challenge (MEPP), an important lifeline for the conflict-affected area. Commissioned on March 2, 2023, the mission’s 32 MW Easy Cycle part is already operational, restoring electrical energy to 1000’s of residents and companies. The remaining 18 MW Mixed Cycle part is on monitor for completion in 2025, additional enhancing the mission’s effectivity and capability. The Honourable Minister of State for Petroleum Assets (Fuel), Rt. Hon. Ekperikpe Ekpo, counseled NNPCL’s efforts throughout a current inspection, lauding the organisation’s swift execution of President Tinubu’s imaginative and prescient for vitality safety.
A Legacy of TransformationMele Kyari’s tenure as Group CEO of NNPC Restricted has been marked by transformative achievements that stretch past the oil and fuel sector. His management has fortified NNPC’s position as a cornerstone of Nigeria’s financial and vitality stability whereas setting the corporate on a trajectory of sustainable development.
As Nigeria navigates a turbulent yr, the achievements of NNPC Restricted underneath Mele Kyari stand as a testomony to the facility of visionary management and the potential for optimistic change. Certainly, NNPC Restricted is a present to Nigeria—one which continues to ship worth, stability, and hope for a brighter future.
Akanni wrote in from Lagos
