Buhari Administration’s Unparalleled Reform of the Nigerian Oil and Gas Sector

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Legacy Awareness & Campaign

Press Statement:

The APC Legacy Awareness and Campaign, a voluntary think-tank group of the governing party, noted that President Muhammadu Buhari was the pioneer Chairman of the Nigerian National Petroleum Corporation (NNPC), between 1977 and 1978.Combining this with his role as Federal Commissioner of Petroleum and Natural Resources, it was one of the first public offices he held that brought him to national attention. During that period, he laid substantial groundwork for the national infrastructure that helped develop the industry – pipelines, refineries, depots, etc, and helped midwife the vision for a Liquefied Natural Gas plant.

Forty years later, the task has fallen upon him again to spearhead unparalleled reforms in the Corporation he helped establish. Under the President’s watch, since 2015, the National Oil Company has achieved the following, and more:1. Published Audited Financial Statements for 2018, 2019 and 2020. This is the first published AuditedFinancial Statements since the NNPC came into existence 43 years ago. 2. Commenced clearing the backlog of Cash Call arrears owed International Oil Companies (IOCs), inherited from previous administrations, and amounting to more than five billion dollars.3. Completed the Escravos-Lagos Pipeline System (ELPS) Phase 2, doubling its capacity to 2.2 billion cubic feet of gas.4. Commenced construction of the Ajaokuta-Kaduna-Kano (AKK) Gas pipeline, Nigeria’s biggest-ever domestic gas pipeline project.5. Commenced the total revamp of the Port Harcourt refinery – yet another industry jinx being broken. 6. Resolved a 12-year-old dispute surrounding (Oil Mining Licence) OML 118, unlocking more than $10 billion of potential investment held up by the dispute. 7. Completed and commissioned an integrated gas handling facility at Oredo, Edo State, which, in addition to producing 84 million cubic feet (mmcf)per day of lean gas (for power generation), will be the largest onshore LPG plant in Nigeria, producing an estimated 330 tonnes per day. 8. Co-invested with the private sector in the incorporation of a 600-million standard cubic feet (mscf) Gas Processing Plant in Imo State, a Biofuels Company in Ondo State, and a 10,000 tonnes per day Methanol Plant in Bayelsa State;among others. 9. Successfully taken advantage of the Covid-19 pandemic to introduce an aggressive cost reduction and optimization program that has helped return an unprecedented profit of N287 billion in the 2020 Financial Year. According to the Group Managing Director of the Corporation, Mele Kyari, “the Corporation saved a lot of cost through contract renegotiation by up to 30% on the heels of the Covid-19 pandemic, introduction of technology that drastically cut travel cost through reduction in in-person meetings and the general automation of processes that enhanced efficiency across the group’s businesses.”10. The Nigeria Liquefied Natural Gas (NLNG) Company Limited, which is 49 percent owned by the NNPC, reached Final Investment Decision (FID) on its 7th Train, its first new Train in more than a decade.

The crowning achievement has been the presidential assent to the Petroleum Industry Bill (PIB), after two decades of unsuccessful attempts. With the emergence of the Petroleum Industry Act (PIA), a new chapter has definitely commenced in the Nigerian oil and gas sector. New industry regulatory agencies have been established, to provide the necessary oversight befitting the new status quo, and the President has received National Assembly approval for his nominees to the management teams of these new agencies. It is truly a new dawn for oil and gas in Nigeria. 

On Friday October 8, 2021, President Buhari received the Certificate of Incorporation of the NNPC Limited, the successor-company to the Corporation. The new NNPC is a Limited Liability Company, subject to the Companies and Allied Matters Act — itself another legislation that has seen comprehensive reform under President Buhari’s watch, for the first time since it was originally passed more than three decades ago. 

The President’s promise to bring long overdue efficiency and transparency to the management of Nigeria’s oil and gas resources is being backed by action. And the journey has only just started. President Buhari will not slow down or relent in his NNPC reform efforts. One of the many transformational legacies that will be associated with his administration will be the rebirth of the National Oil Company, and a repositioning that will set it on the path to becoming a world-class institution. In the President’s words, “an enduring National Energy Company that can compete with its global peers and deliver value to its shareholders, the Nigerian people.”

Barr. Ismail Ahmed

Mr. Lanre Issa-Onilu

Mr. Tolu Ogunlesi

Mr. Salihu Moh. Lukman

October 19, 2021

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