Baru prioritises payment of cash calls to IOCs

The new Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, has pledged to defray the agreed cash calls to the International Oil Companies (IOCs).

Speaking while taking the reign of leadership from Dr Ibe Kachikwu as the Group Managing Director of the NNPC, Baru, who thanked Kachikwu for recommending him for the position, pledged to work assiduously to deepen the on-going reform in corporation.

He added: “I will implement the new business model and the grant needed autonomy to the SBUs with ABUs providing relevant directions and control that would ensure their growth and profitability. The management under my leadership will continue to explore ways of relieving government from the burden of cash calls obligations as well as address and defray the agreed cash call arrears to the International Oil Companies (IOCs).”

On his part, Kachikwu said the NNPC under his watch has returned the refineries to working ways though not yet at the optimal capacity.He said: “The refineries have challenges but we have been able to push them to a point where the three refineries are working simultaneously for the first time in about 10 years, but still not at the capacity that we want.

We need to find a structure, and we have started, in which private funds will flow into the refineries and we will be able to rebuild our refineries to 90 or 100 per cent capacity. i have already made a commitment that by 2018, 60 per cent of refined products importation will stop and by 2019 we must become a net exporter of refined petroleum products. I am also happy to announce that in our May results, for the first time in the history of this company, the NNPC made a profit of N270m.”

While pledging total support to Baru, Kachikwu explained that he had laid a solid foundation for the future success of the Corporation and introduced deregulation policy, which has led to the reduction of the national consumption figure and a further reduction of operational costs by 30 per cent.

“Today our consumption of fuel has gone down by 30 per cent. We have no queues in the filling stations and we have one and half months of self-sufficiency. We equally have strategic reserves in place that we are putting together and we have a funding scheme to enable the downstream to be able to adequately fund itself. We undertook deregulation at the time nobody thought it was possible and if there is anything we leave for this industry, it must be the legacy of that deregulation. Today our consumption of fuel has gone down by 30 per cent and we no longer have queues in the filling stations.

Kachikwu, who disclosed that though the refineries have continue to have operational challenges, all of them are simultaneously working at the same for the first time in 10 years.

The Minister also stressed that 60 per cent of the national refined products shall be produced locally by 2017 while Nigeria will not only stop importation as from 2019, but also become a net exporter of refined petroleum products.

Kachikwu, who rallied support for the new NNPC helmsman, stated that a massive restructuring of the Corporation has taken place and the gains should be sustained.