• Questions over political will as Ojulari, Kida, others step in
• Stakeholders set fresh agenda, seek divestment of refineries
• Experts demand 3m bpd oil production 

President Bola Tinubu, yesterday, replaced Mele Kyari alongside other members of the board of Nigerian National Petroleum Company Limited (NNPCL) with technocrats to lead amidst concerns over political will to push through the required reforms.

Coming amidst huge debts in forward sales and to oil traders, unprofitable subsidiaries, dwindled oil production and struggling refineries, stakeholders, reacting to the development demanded the privatisation of NNPCL refineries, listing of NNPCL and increase of oil production to three million barrels per day (bpd).

Other demands are transparency and accountability in the operations of the state-owned company as other immediate tasks the new leadership must take up.

At the helm of the leadership overhaul is the former Managing Director of Shell, Bashir Bayo Ojulari, who now assumes the role of Group Chief Executive Officer (GCEO), replacing Kyari. Ahmadu Musa Kida has also been named the new non-executive chairman, taking over from Pius Akinyelure.

Other key appointments include Adedapo Segun as Chief Financial Officer, while Bello Rabiu will serve as a non-executive director representing the North West, Yusuf Usman for the North East and Babs Omotowa for the North Central.

Austin Avuru has been appointed to represent the South-South, David Ige for the South West, and Henry Obih for the South East. Lydia Shehu Jafiya has been appointed to represent the Ministry of Finance, while Aminu Said Ahmed will represent the Ministry of Petroleum Resources.

The move came after decades of underperformance, mounting financial debts and declining crude oil production, which have threatened Nigeria’s macroeconomic stability.

The new appointments, which took effect yesterday, are seen as a crucial step towards restructuring the company and restoring investor confidence.

The appointment of the individuals, many of whom have had distinguished careers in the oil and gas sector, signals a shift towards positioning NNPCL as a globally competitive energy company.

The state oil company, which has long been plagued by inefficiencies, corruption and financial mismanagement, is struggling under heavy debt amounting to trillions of naira.

It also owes $6.8 billion to oil traders and $5.4 billion in forward sales agreements and loans. Despite declaring a profit of N3.2 trillion in 2023, liquidity constraints and unproductive subsidiaries continue to weaken the company’s financial standing.

Industry stakeholders, speaking with The Guardian, expressed cautious optimism regarding the new appointments.

Although they acknowledged the experience and competence of the newly assembled team, they warned that political interference could stifle their effectiveness.

A former president of the Nigerian Association of Petroleum Explorationists (NAPE), Abiodun Adesanya, described the appointments as a positive development for the industry, noting that those selected are highly experienced professionals with strong managerial track records.
However, he emphasised that the success of the new leadership would depend largely on the level of independence they are given to operate.

He pointed out that political interference has historically undermined NNPCL’s efficiency and that President Tinubu must shield the new leadership from undue external pressure.

According to him, if allowed to operate without unnecessary political influence, the team has the potential to address critical challenges such as increasing oil production, implementing strategic divestments, and ensuring the successful listing of NNPCL on the stock exchange.
He further argued that government ownership in refineries should be scaled down, allowing the private sector to take the lead in their operations.

Similarly, an energy expert, Prof. Wunmi Iledare, welcomed the appointments, describing them as a defining moment for NNPCL.

He noted that for the first time in a long while, the company’s board is largely composed of professionals rather than politically motivated appointees.

Iledare said that the calibre of individuals chosen for these roles suggests a deliberate effort to professionalise the management of the oil and gas sector.

He added that this is an opportunity for NNPCL to reset its operations and align with the provisions of the Petroleum Industry Act (PIA) of 2021, which was designed to enhance efficiency and profitability in Nigeria’s oil sector.

A former president of the Chartered Institute of Bankers of Nigeria and an economics professor at Babcock University, Segun Ajibola, noted the numerous challenges facing the new leadership.

He stated that while the oil and gas sector remains a key driver of Nigeria’s economy, it is also one of the most volatile industries, affected by both local and global factors.

Ajibola argued that stabilising crude oil production to meet and exceed the targets set by the Organisation of Petroleum Exporting Countries (OPEC) and the 2025 national budget benchmark should be a top priority.

Ajibola also noted that security concerns in the Niger Delta, including oil bunkering, pipeline vandalisation, and illegal refining activities, must be tackled decisively.

He stressed that addressing these challenges would not only improve oil production levels but also restore investor confidence in the sector. According to him, the issue of refinery rehabilitation is equally critical, as Nigeria cannot continue to rely on imported petroleum products while its refineries remain non-functional.

The scholar urged the new leadership to prioritise getting all the refineries back into production, ensuring that local demand for refined petroleum products is met.

The Nigerian Economic Society President and energy scholar at the University of Ibadan, Prof. Adeola Adenikinju, echoed similar sentiments. Adenikinju noted that for years, there have been calls for a complete overhaul of NNPCL’s governance structure, as inefficiencies and corruption have stifled its performance.

He stressed that the new leadership must focus on improving transparency, particularly in areas such as refinery operations and crude oil swaps, which have been marred by allegations of mismanagement.

Adenikinju also called for an aggressive push to increase Nigeria’s crude oil production beyond the current levels, arguing that achieving a production range of three to four million barrels per day would significantly boost national revenue and energy security.

While the new leadership transition has been widely welcomed, many industry observers remain critical of the outgoing administration under Mele Kyari.

Kyari, who was appointed as the 19th Group Managing Director of NNPC in July 2019, was confronted with significant challenges during his tenure.

When he assumed office, Nigeria’s oil production stood at 2.1 million barrels per day. However, under his leadership, production struggled to exceed 1.6 million barrels per day, often falling below one million barrels per day at certain points due to theft, pipeline vandalism, and operational inefficiencies.

One of Kyari’s key initiatives was the campaign to reduce the cost of oil production, but this effort failed to yield significant results, as the cost of producing a barrel of oil in Nigeria remains around $40 – one of the highest in the world. While he played a role in securing the $2.9 billion rehabilitation of the Port Harcourt, Warri and Kaduna refineries, the efficiency of these projects remains a subject of debate.

Kyari’s administration faced criticism over crude oil allocations to the Dangote Refinery.
Despite efforts to combat crude oil theft, the impact on overall production levels was minimal, as Nigeria continued to fall short of its budgetary oil production targets. This ultimately contributed to the financial strain on NNPCL, which remains heavily indebted.