NNPC targets profitability by 2021 – chief

The Nigerian National Petroleum Corporation (NNPC) has restated its commitment to efficiency, openness, transparency and prudence in service delivery if it is to realise its objectives and meet the expectations of its shareholders.

The Group Managing Director of the corporation, Mele Kyari, who stated this in Abuja on Friday at a state of the industry briefing to journalists, said despite the impact of COVID-19, if the NNPC is able to sustain the current trajectory in its progress, it might become profitable and commence payment of dividends from next year.

Kyari said no organisation can meet the expectations of its shareholders without being efficient and prudent in service delivery and payment of dividends to its investors.

He said over the years, the NNPC failed to meet the expectations of its shareholders because its management has always been running from one crisis or opacity to another.

Apart from Nigerians always seeing the corporation as the representation of corruption, Kyari said successive managements were scared they would not be able to stand the test of scrutiny if they opened up their operations to the public.

When he assumed office, he said, he promised to be different, by opening-up to the public and ensuring frank disclosure of NNPC’s operations and finances.

“We decided to open up to our shareholders, which are Nigerians, after all, we are not angels, neither are we saints. If it were so, there would not be eternal life, and if everyone was having eternal life, there will not be any rendition of accounts.

“We recognized that everyone makes mistakes. But, in running this business, NNPC does not make deliberate mistakes.

“I told Nigerians we were going to be accountable to them by being transparent to them in our transactions, which is a matter of entitlement to the shareholders. This will help us do better in the business,” he said.

Kyari said he was proud to note that NNPC was the only national oil company that publishes its operational and financial records every month.

He said his management did not stop at publishing the monthly operational report of the NNPC, but went a step further to publish its annual audited financial statement, which it had not done in 43 years of its operation.

Despite some unflattering contents in the 2018 financial statement, including reports of over N803 billion losses in its refining operations, pipeline business, and other expenditures in many segments of its business that should not have been, he said the NNPC went ahead to still publish the report.

To demonstrate its readiness to learn from the previous years’ mistake, Kyari said the corporation in its 2019 audited financial statement, recorded a significant improvement, with a cut down in its operational costs by over N800 billion.

He said the cut, which saw the NNPC reduce its net loss by over 97 per cent, was the first time in the history of the company that such a reduction would be achieved within one financial year.

Apart from a commitment by his management to cut its cost of operation, improve its efficiency and be profitable, the NNPC GMD attributed his success to his management’s unfettered control of the affairs of the company without any distraction or interference from any quarter.

He said the NNPC was not only allowed to take decisions and commit to be accountable in its operations, but was given the privilege to take responsibility for such decisions in a manner that has never happened until under the current administration.

“I make bold to say that President Buhari is the only one who has not asked the NNPC to do anything for him. I can tell you that under no circumstance or any issue has President asked us to do anything that we should not do, or to direct us on what we should do, other than to ask if we are sure the decision we have taken would work in the best interest of Nigeria.”

Lamenting the impact of COVID-19 pandemic, which has significantly altered plans in the oil and gas industry, Kyari said he remained fulfilled that the NNPC and its partners were able to record some of the most significant achievements during the period.

He identified the final investment decision on Train 7 of the Nigeria LNG as one of such achievements, saying it remains the only major project anywhere in the world in the oil and gas industry valued at close to $4 billion that was taken during the period.

He said the other significant achievement was reaching an oil production level of 2.49 million barrels per day (MBPD) on April 17 of this year out of the target of 3 MBPD.

Kyari said the last time a production figure close to the 2.49 MBPD was last attained was 15 years ago.

Reiterating his management’s pledge to make the NNPC an energy company of excellence, which must declare dividend to its investors, he said despite the impact of COVID-19 pandemic, all things being equal, he remains optimistic that by the end of this year, the NNPC would begin to declare dividend to Nigerians.

To realise these objectives, Kyari emphasized the need for NNPC to improve on its operational processes, systems and become more transparent and accountable.

“We now know it is possible to achieve our target if we improve our efficiency and reduce our costs, focus on our production choices, carefully select the assets that would work for us.

“So, three million barrels production capacity is within sight. If COVID-19 had not come, we would have been celebrating that today. We have clear visibility of what assets we need to produce the balance of 450,000 BPD that would enable us to achieve our target.

“We are not giving up because of the prevailing market conditions. We are constrained by the OPEC plus alignment to cut production to avoid producing to glut the oil market,” he said.

Get more stories like this on Twitter and Telegram

Recommended Stories