Bashir Bayo Ojulari, the new group managing director of the Nigerian National Petroleum Company Limited (NNPCL), has set daunting targets for himself. If they are met, the new targets will not only make the company the pride of Nigerians but will lift millions of Nigerians out of abject poverty.
Speaking at a town hall meeting in NNPCL Tower in Abuja to thousands of staff of the struggling state oil monopoly, Ojulari stressed that NNPCL plans to attract $30 billion investments by 2027. The figure will be raised to $60 billion by 2030. It also plans to raise oil production to two million barrels per day.
Ojulari argued that the refining capacities of Nigeria’s failed refineries will be raised to 200,000 barrels per day by 2027 while it will further be raised to 500,000 barrels per day by 2030.
On gas production, the new group managing director said that by 2027, NNPCL plans to be producing 10 billion cubic feet of gas per annum while the figure will be raised to 12 billion cubic feet by 2030.
The company under Ojulari plans to deepen energy access in the country while at the same time making it affordable. “The next journey to becoming a fully-fledged limited liability company will require the collective drive towards making NNPC more transparent, profitable and accountable”, Ojulari asserted.
The above statement captures all the trappings that gives NNPCL the perception of a failed company that is largely seen by many as the cause of Nigeria’s poverty. Ojulari’s name will be written in gold in the nation’s hall of fame if he makes NNPCL transparent and accountable.
The company was prohibitively unaccountable to the federal government. It lacked transparency in the handling of petrol subsidy as the daily consumption figures it flaunted stood economic logic on its head.
The targets set by the new group managing director are daunting but attainable. To raise the refining capacities of the Port Harcourt, Warri and Kaduna refineries to 500,000 barrels per day by 2030, Ojulari must irreprehensibly execute the plans set down by Mele Kyari, the immediate-past group managing director of the company.
Kyari had vowed to privatise the refineries. That is the only way the refineries can be made to function efficiently. They cannot remain under the clutches of NNPCL and hope to succeed.
NNPCL will find it difficult to attract $30 billion investments into Nigeria’s oil fields if things remain the way they are today.
At $48 per barrel, Nigeria musters the world’s highest oil production cost.
That is partially why international oil companies (IOCs) are fleeing Nigerian oil fields. The profit margin is just too narrow. In Saudi Arabia a barrel of crude oil is produced at a scant $10.
The National Upstream Petroleum Regulatory Commission (NUPRC) lists the causes of Nigeria’s prohibitively high cost of oil production to include aging facilities which collapse regularly and require instant fixing, pipelines vandalisation, crude oil theft and discontent by oil producing communities, among others.
Crude oil theft and discontent by oil producing communities are factors beyond NNPCL’s control. The federal government must intervene to make the company succeed.
Government must stop oil theft by high velocity criminals. The poverty in the oil producing communities is responsible for the discontent and sabotage that escalates production cost.
Government must eradicate poverty in the oil communities and provide them electricity and potable water. That is not the responsibility of the oil companies which pay taxes to government.
The oil communities had erroneously assigned those responsibilities to the oil companies and consequently intensified hostilities with them as they failed to do what actually is not their duties.
The federal government and indeed the entire Nigerian people will clap for Ojulari if he succeeds in deepening gas consumption in Nigeria.
In 2021, one could fill a 12.5kg gas cylinder with N3,500. Today, one needs a minimum of N15,000 to carry out the same task.
Besides, other gas equipment like cylinder and cookers are beyond the reach of many in the embattled lower end of the middle income bracket. These factors inhibit gas consumption. Consumers will be very excited if NNPCL could reduce the price of gas and make it cheaper for them to acquire other gas equipment.
Nigeria has an abysmally low per capita gas consumption of 2.6kg when Senegal, a poorer country, musters 9kg per capita consumption of gas. That gap could be bridged if NNPCL attains its curious accessibility and affordability targets.
That will have the glorious effect of diverting attention from firewood, which is worsening the deforestation process and accelerating the journey of the Sahara Desert to the Atlantic Ocean.
Blueprint is deeply impressed by Ojulari’s ambitious targets which we believe are attainable. We wish him the best of luck in his new assignment as he moves to improve the living standards of persevering Nigerians.