Change Of Govt Won’t Affect Continuity Of NNPC Ltd, Kyari Assures

Says Robust Framework Being Implemented To Tackle Crude Oil Theft

…Allays Fears Of Job Losses From NNPC Transitioning

The Group Managing Director of the Nigerian National Petroleum Company Ltd, Mele Kyari on Monday assured that with the way the Petroleum Industry Act is structured which gave birth to the transitioning of the NNPC Ltd into a CAMA company, its operations as a going concern will not be affected by changes in government in subsequent years.

Kyari said this during an interview on Channels Television which was monitored by THE WHISTLER.

The NNPC LTD on July 1, this year fully transformed into a Company whose operations is being regulated under the Companies and Allied Matters Act following the implementation of the Petroleum Industry Act.

The Corporate Affairs Commission had on September 21 last year, completed the incorporation of the NNPC Ltd in accordance with the provisions of the Petroleum Industry Act 2021.

The PIA was signed into law by President Muhammadu Buhari on 16th August, 2021, following its passage by the National Assembly in July of the same year. With the registration by the CAC, the NNPC Ltd was floated with an initial capital of N200bn making history as the company with the highest share capital in the country.

Buhari is expected to officially unveil the new NNPC Ltd on Tuesday at the State House.

Speaking during the interview, Kyari said the NNPC transitioning will make it become a commercially oriented and profit-driven national petroleum company independent of government and audited annually.

He said in terms of operations, the NNPC Ltd would be managed like a private sector enterprise and unlike previously when it was owned by the government, the NNPC is expected to become more efficient in its operations.

He said the Company will also effectively maximize returns on investment for the 200 million Nigerians, ensure returns for shareholders and pay taxes to the government.

When asked if the change in government on May 29 next year will affect the operations of the NNPC as had been the case with some other government enterprises in the past, Kyari said, “I don’t see any political consideration for this (NNPC transitioning). As you may be aware, deregulation is clearly spelt out in the PIA within the time frame. Deregulation is about pricing petroleum at the appropriate price and there are certain circumstances that make government and state to decide whether they will provide subsidy for certain commodities.”

He also steps are being taken to address the issue of crude oil theft and pipeline vandalism.

Within a three months period covering January 1 and March 31 this year, Nigeria lost a whopping amount of $1bn revenue to crude oil theft.
The theft of crude oil has been frustrating the efforts of the government in attracting fresh investments into the oil and gas industry through the implementation of the Petroleum Industry Act.
The theft of crude oil has been having a negative effect on the revenue of the federal government, which has denied the country the much-needed fund to boost economic development.
Apart from revenue loss, the issue of oil theft is currently threatening not just the NNPC’s quest for energy security for the country, it is also having a debilitating effect on Nigeria’s foreign exchange earnings.
Nigeria relies on crude oil revenue for over 90 per cent of its foreign exchange earnings.

But Kyari said that a robust framework is currently being implemented to tackle the theft of crude oil.

He described crude oil theft as an “elitist business” that must be tackled “frontally,” adding that Nigeria is currently losing about 400, 000 barrels of oil per day to the menace.

He said, “We ‘ve never seen the scale of disruptions and we are losing over 400,000 barrels of crude oil daily and this is a challenge.

“We are working with our partners and security agencies and there is a robust framework that is being implemented and ultimately, we will contain the acts of vandals.

“We understand that crude oil theft is an elitist business and we will attack it frontally. We know that when we take down down, everything will come to normalcy. Between Mosimi and Atlas Cove we cannot pump oil because of vandals and this is a complex framework that we have put in place to address these challenges and we will overcome it. The President has given his clear direction that we must stop this.”

Kyari also allayed fears that the transitioning would not result into job losses as its usually the case with many other entities undergoing such processes.

He said, “The law is very clear that we must keep all the people working for the company. Today we have a little over 7,000 direct staff of this company and by law we are required to keep all of them.

“We are also going to make sure that they have compensation of not less of what they have today and nobody will lose their job.

“The law also provide that they must be more effective and efficient and therefore, within us and our union, there is a perfect understanding that we must do things differently and a new culture must set in, there must be consequences and also appropriate rewards for doing things efficiently. We have no issues managing the subsidiaries.”