By Etim Etim
Expedite the Contracting processes: Currently it takes about two years to go through the contract award process for major projects that require NNPCL’s approval. The new Board knows how major contracts are awarded in the home country of the IOCs. They should implement such best practice in NNPCL, with recognition of local peculiarities.

Merit-based hiring at NNPCL: During the eight years of President Buhari as the Minister of Petroleum, the ‘northernisation’ of NNPCL in many aspects was brazen. Going forward, an annual performance review of the employees should be done and the bottom five per cent let go and replaced, if necessary. New recruitments should be transparent and merit-based.

Endless search for hydrocarbon in Northern Nigeria
Since the 1970s, NNPCL has been exploring for oil and gas in the northern part of Nigeria. There is no IOC that will continuously spend its money for more than 50 years on exploration in a particular area and despite no commercial find, continue investing more money on such fruitless search. Since the new Directors are from IOCs, let them be bold enough to stop throwing good money into these fruitless explorations.

If for political reasons the searches must continue in the northern oilfields, NUPRC can award those oil blocks to private companies on a Production Sharing Contract (PSC) basis. The private companies can then take the risk and share the production with the Federation, upon success. The money saved can be used to buy shares in oilfields outside Nigeria, as done by successful NOCs in Nigerian oil fields.

To buttress the point, let’s recall that during Mele Kyari’s tenure, there was a huge song and dance about the discovery of one billion barrels of crude oil and 500 billion cubic feet of gas in Kolmani oilfield in Alkaleri, Bauchi State. Even President Buhari, in November 2022, had to perform an official inauguration of the Kolmani Development Project where an oil refinery of 120,000 bpd, a gas processing site of 500 million cubic feet per day and a 300 MW power plant were all to be built with the US$3 Billion fund already sourced. About three years after, where are the projects?

It is an open secret that doubts exist within the subsurface community of the Nigerian Oil Industry about such quantity of hydrocarbon being discovered since there has been no public declaration of the length of the pay sand encountered and at what depth, as is the standard industry publication when new discoveries are made. That same Kolmani Oil field was abandoned by Shell in the late 1990s when it could not make any commercial find. So, NNPCL should cut the losses by stopping frontier exploration up north. 

Midstream sector
Pipelines to Refineries: Pipelines carrying crude oil to refineries have been vandalised for many years now. No matter how deep a replacement pipeline would be buried, when there is a will to puncture it, it will be punctured. Therefore, the new Board should adequately and appropriately motivate every community a pipeline passes through to protect it against vandalism. The Board members have been dealing with communities their entire career, so they are now in a position to delight the oil communities in a way their IOCs or NNPCL did not allow them to.

Pipelines from Refineries to Depots: Back in the 70s, there was a functioning pipeline network carrying various petroleum products from the various refineries to oil product depots situated at various cities across the country. With the depots not being in use for many years, the Board should should prioritise the reactivation of these pipelines and, again, motivate the communities to protect them all across the country.

The challenge of crude oil supply to Kaduna Refinery: The Kaduna refinery’s only source of crude oil is one single oil pipeline that runs from NNPC Terminal at the Atlantic Ocean located beside Chevron’s Escravos Terminal, all the way to Kaduna. With that pipeline not in use for many years, there is a high possibility that it has been harvested just like other unused pipelines in the country.

Therefore, even if Kaduna refinery is refurbished, replacement of that single source pipeline to feed the refinery with its raw material will be a financial challenge. We note that the AKK pipeline is yet to be completed. How more difficult will it be to lay a new pipeline through the Niger Delta swamp and the dry land to Kaduna. The Board should have a critical look at how to revamp the Escravos-Kaduna pipeline, if possible.

Downstream
Government-owned refineries: The four government-owned refineries are not functioning; not operable and more importantly, without secured pipelines to feed them with their raw material – crude oil. NNPCL has tried to bring those refineries back to life to no avail, despite having a full retinue of staff on the payroll for each of the four refineries. Furthermore, these refineries are at least 45 years old.

Without the appropriate maintenance and repairs over these years, they have come to the end of their technical life. No amount of money thrown into bringing an idle 45-year old refinery back into production will achieve the purpose. The Board should simply sell off all the existing refineries and allow private companies to seize the business opportunity of keeping the country wet.

Petrol stations: NNPCL should not spend its money building and operating petrol stations for one simple reason: The petrol station attendants will expect to be paid the full NNPCL salaries and allowances. Rather, NNPCL should dispose of all its petrol stations to third parties who will continue to operate the stations under the NNPCL brand without the NNPCL carrying the operational cost on its balance sheet.
Concluded.
Etim wrote from Uyo.