A chronicle of achievements of the NNPC GMD Malam Mele Kyari within two years

By Edith Ike-Eboh & Emmanuel Afonne

On July 8, 2019, Malam Mele Kyari was officially inaugurated as the 19th Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), his appointment having been announced much earlier in June.

In his inaugural address, as is usually the case in such speeches, he clearly indicated the direction his management intended to steer the Corporation.

Two years down the road, a look at his actions and strides vis-à-vis the key objectives he set out for himself at his inauguration would give a clear picture of his achievements in the last two years.

Upstream

One of the goals the GMD set at his inauguration was to increase the national crude oil reserves to 40billion barrels.

To achieve that goal, the GMD galvanized NNPC to rev up exploration work in the inland basins with the drilling of the Kolmani River II Well culminating in oil find in commercial quantity in the Upper Benue Trough.

The drilling of Kolmani River III Well is ongoing with very high prospect of oil find.

Seismic data collection is ongoing in the Bida and Sokoto Basins. Plans are also afoot to re-launch the exploration work in the Chad Basin.

All these are geared towards boosting the nation’s crude oil reserves to meet the 40billion barrels target.

Another goal set by Kyari is to boost the nation’s oil production to 3 million barrels per day.

To achieve that target, he immediately set about resolving disputes around a number of oil blocks that had led to production shut-in.

A case in point is the resolution of the dispute involving Shell and Belema Oil that shut in over 30,000 barrels per day production in OML 25.

That dispute was effectively resolved to restore production in the oil block.

He also led the Corporation to execute the Abo OML 125 Heads of Terms leading to the resolution of the issues around most of the deep offshore Production Sharing Contracts.

This paved the way for the renewal of OML 125 and further investment in the exploration of the lucrative field to boost the nation’s crude oil production.

Recently, in May 2021, Kyari repeated a similar feat when he led the Corporation to sign a series of agreements with SNEPCo and other PSC partners to resolve the disputes around another deep offshore block, OML 118.

The development led to the renewal of that acreage with the prospect of a new 10 billion naira investment in the development of the Bonga South-East Field.

This will further boost the nation’s oil production.

In furtherance of the goal of boosting the nation’s crude oil production, the Kyari-led management of the NNPC has secured a number of alternative funding facilities for the NPDC and some of the Joint Ventures to facilitate further development of assets.

These include: the 875.75 mllion naira NPDC OML 65 Alternative Funding and Technical Services package with CMES-OMS Petroleum Development Company.

Others are the 3.15 billion dollars Alternative Financing Package with Sterling Exploration and Energy Production Company Limited (SEEPCO) and other partners for the development of NPDC’s OML 13.

First oil of about 7,900bpd was achieved from the project on April 1, 2020, while production is expected to peak at 94,000bpd of oil and 542mmscfd of gas within four years.

Gas Development

NNPC has focused heavily on the gas sector in keeping with the aspiration of the administration to diversify the economy by transforming the nation into a gas driven economy.

In this regard, NNPC drove and achieved the Final Investment Decision on the NLNG Train 7 Project in December 2019.

The project was on the drawing board for over 10 years. The project is expected to generate over $20billion of revenue to the Government over the project’s lifecycle, 10,000 direct and 40,000 indirect jobs.

The Corporation followed that feat up in May 2020, at the heat of the COVID-19 pandemic, with the signing of the Engineering, Procurement and Construction (EPC) contract of the NLNG Train-7 project.

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The contract was signed with the SCD JV Consortium comprising affiliates of Saipem, Chiyoda and Daewoo.

The execution of the EPC contract signals the effective commencement of the detailed design and construction phase of the multi-billion dollar project which on completion is expected to raise the NLNG production capacity by 35 per cent from the current 22 million tonnes per annum (MTPA) to 30 MTPA.

On June 15, 2021, the ground-breaking ceremony of the NLNG Train 7 Project was conducted, signaling the commencement of construction work on the project.

NNPC also successfully flagged-off the construction of the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project on June 30, 2020.

The project which has been described by the President as a game-changer is an integral part of the Trans-Nigeria Gas Pipeline (TNGP) with a capacity to transport about 2.2 billion cubic feet of gas per day.

The infrastructure designed to feed gas into the AKK – the Escravos Lagos Pipeline System II (ELPS II) and Oben-Obiafu-Obrikom (OB3) gas pipeline are also being aggressively executed and expanded to increase delivery capacity from 1.5BCF/D to over 3.5BCF/D.

The ELPS II has reached 96.34 per cent completion.

Kyari also led the Corporation to achieve a 300 million dollars reduction in the cost of the AKK Gas Pipeline contract via contract renegotiation from the initial 2.8 billion dollars.

The AFS were published in the Corporation’s website for all interested parties to access and scrutinize.

This is the first time the Corporation’s AFS were made public in such a manner.

A major revelation in the Audited Financial Statements of the two years so far published is the 99.7 per cent reduction of the Corporation’s loss profile from 803 billion naira in 2018 to 1.7 billion naira in 2019. Following this trajectory, the Corporation is likely to declare profit in the 2020 AFS which is billed to be released soon.

The Kyari-led management also sustained the Publication of the Corporation’s Monthly Financial & Operations Reports (MFOR) in line with the TAPE vision.

NNPC remains the only national oil company that publishes its financial and operations reports monthly globally.

The GMD also led the Corporation to enlist with the Global Extractive Industry Transparency Initiative as an EITI Supporting Company which mandates places NNPC in the group of over 65 extractive companies, state owned enterprises that commit to observing transparency and accountability standards defined by EITI.

Another key achievement of the NNPC under the leadership of Mallam Kyari on the transparency terrain is the successful completion of a controversy-free recruitment exercise for 1,000 young graduate trainees to rejuvenate the Corporation’s talent mix.

Stakeholders Engagement

Kyari also promised at his inauguration to upscale engagement with stakeholders to ensure that stakeholders are carried along in the Corporation’s operations.

He has kept faith with this pledge by devoting time to honour invitations from the relevant committees of the National Assembly, holding periodic engagement sessions with critical stakeholders including the media.

COVID -19 Interventions

Following the outbreak of the COVID-19 pandemic in early 2020, the Group Managing Director quickly realised the vulnerable position of Nigeria with regard to condition of the existing healthcare system in the country.

He rallied players in all the sectors of the oil and gas industry to raise over 21 billion naira to support the fight against the spread of the disease in the country.

Under the leadership of NNPC, 26 per cent of the fund was deployed for the provision of logistics and in-patient support equipment such as ambulances, ventilators, isolation centres, etc.