Bashir Bayo Ojulari, a mechanical engineer versed in the ecosystem of oil and gas, has spent roughly four months on the beat as Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL). And if morning shows the day, as ideally it should, then the nation’s oil and gas behemoth is in safe hands.
NNPCL even with all the challenges in recent years, is still the largest state-owned oil and gas facility in Africa. But it has been afflicted by a leadership distortion syndrome which has seen it experience high leadership turnover. A particular managing director (Shehu Ladan) served for just seven weeks. Such quicksand uncertainty at the helm of leadership in the nation’s biggest player in the oil and gas sector does not only discourage long-term planning and visioning, it sends negative signals to foreign investors and potential partners.
Here, President Bola Tinubu deserves credit for reappointing the immediate past Group Chief Executive Officer (GCEO) of NNPCL, Mele Kyari, who was an appointee of the government of President Muhammadu Buhari. Kyari with about six years to his belt as GCEO is the longest serving of them all.
Established in 1977, and transitioned into a limited liability company in July 2022 following the enactment of the Petroleum Industry Act (PIA) in 2021, NNPCL has had a turnover of 20 CEOs in 48 years, an average of one CEO in 2.4 years. This is not the picture of stability. NNPCL is not the only state-owned oil company in the world. Examples of National Oil Companies (NOCs) abound and most of them are run on the chain of profitability, ensuring energy security for their respective countries.
A quick checklist of some of the biggest in this category: Aramco (Saudi Arabia) ranked as the world’s largest oil company by revenue and market capitalisation; Petroleos de Venezuela (PdVSA) (Venezuela); China National Petroleum Corporation (CNPC) which operates not only in China but in many other countries; National Iranian Oil Company (NIOC); Kuwait Petroleum Corporation; and Rosneft, a Russian state-owned oil and gas company.
It’s therefore not a misnomer for a country to run its own oil and gas corporation. What matters is efficiency in management and stability in leadership. When these two ingredients are in good mix, energy security and profitability is guaranteed. For instance, Amin Hassan Nasser is the President/CEO of Aramco, a position he has held since 2015 (10 years now). Compare with the NNPCL leadership. It means that if Aramco were a Nigerian company, it would have had at least four different CEOs within the 10 years. This is both disturbing and distressing. It is antithetical to planning, growth and innovativeness. Modern leadership thrives of innovation, short and long-term planning (envisioning), futuristic decision-making and anticipatory projection. None of this is possible when the leadership that ought to provide the compass for the organisation is swamped in uncertainties. Leadership of successful state-owned NOCs share a common trait: they are insulated from politics. The leadership is allowed to drive organisational growth through the levers of professionalism, legacy corporate governance, proven competencies, transparency, innovative wand and manifest capacity.
This is what NNPCL needs now. President Tinubu’s choice of Ojulari fits the purpose. A case of a man fit for the moment. Ojulari’ s private sector pedigree lends him to the job and it is already showing in his early steps: firm and sure-footed. Appointed April 2, this year, he has set out to wheel NNPCL to the path of efficiency and accountability befitting the national monument. In just barely four months, his imprints across upstream partnerships, infrastructure development, energy transition, and corporate governance had been telling. They reflect in profitability, refinery rehabilitation, transparency, and employee welfare, a clear break from the past.
Under his watch, there has been enhanced collaboration with upstream partners, improved growth in oil and gas production, and guaranteed 100 per cent pipeline availability, all of which have resulted in spike in revenue flows.
He has instituted a neo-culture of timely cash call payments which has directly boosted operations and improved partner confidence in the oil and gas spectrum. His zero tolerance for waste policy undergirded by a demonstrative disavowal of value loss has helped to cut operational costs, inefficiencies and lethargy at all strata of operations and management value chain. This has bred an attitude of ownership, patriotism and responsibility among staffers.
His mantra is ‘every naira must count.’ This is no mere sloganeering. It has become the normative economics that guides the processes. A new dawn is here. Cutting costs and taking hard decisions around unproductive operations have become the defining creeds that drive the enterprise called NNPCL. This transition in value-orientation among staffers is critical for enterprise turnaround. It’s in tandem with the demands of running NNPCL as a limited liability company to reflect its new status in tandem with the tenets of the PIA.
An apostle of clean energy, under him, NNPCL has donated 35 compressed natural gas (CNG) buses to the Presidential Initiative on CNG. This gesture speaks to the global and futuristic mindset of Ojulari; and much more a genuine concern for the poor in the country. CNG vehicles are not only cleaner, they are cheaper and accessibility is on the ascendancy. A major feat achieved under Ojulari is the completion of the AKK River Niger Crossing which is a critical segment of the Ajaokuta–Kaduna–Kano gas pipeline project.
Ojulari’s template mirrors that of the leadership of Aramco which seeks to keep production costs low, avoid waste and infuse tech innovations into operations while not ignoring staff welfare. It bears restating that NNPCL has witnessed high production cost which was one of the reasons some IOCs exited the country. Ojulari is working to attract heavy investments into the sector especially in upstream and midstream infrastructure. With more investments and infusion of innovative technology into the NNPCL oil and gas value chain, Nigeria will witness significant increase in crude oil output, improved functionality of refineries and a wider berth in husbanding the huge gas reserves in the country.
Ojulari cannot achieve these alone. A tech-driven professional from the private sector where he has managed successful enterprises and smartly led a high-level $2.4 billion acquisition deal of Shell Petroleum Development Company of Nigeria (SPDC) using a consortium of indigenous energy companies, he is primed for the task of keeping NNPCL on the cusp of profitability and sustainability.
But he needs the protection of President Tinubu and cooperation of critical stakeholders in the sector. Let’s not forget that he inherited key staffers that he did not employ. The allegiance of some of these staffers may be to someone else, not to Ojulari. This may negatively affect his effective implementation of the reforms and ideas intended to reposition NNPCL. In President Tinubu’s ambitious and progessive quest to create a $1 trillion economy by 2030, the oil and gas sector must be properly managed to play its role. Ojulari understands this and going by his remarkable strides in barely four months, it’s obvious that he is the fit man for the job. He deserves to be protected from saboteurs from within the system and without.
ABOUT THE AUTHOR:
Okude, a policy analyst, writes from Abuja.
