By Erasmus Ikhide

Crude oil was discovered in commercial quantity in Nigeria in Oloibiri

in present day Bayelsa State in 1956; four years before the British

granted us political independence. A school of thought believes that

if the discovery had been made earlier, the Caucasians would never

have fully departed the country and we would have had White Nigerians

in a similar manner like what obtains in South Africa.

The black gold as it is fondly called has been tragically more of a

curse as it has elevated a culture of sloth and lack of innovation

which has done nothing but greatly impoverish us. Who could have

believed that the revolutionary strides undertaken by the late sage

Chief Obafemi Awolowo while he held sway as Western Region Premier

between 1952 and 1959 was from the proceeds of cocoa and other

agricultural produce?

The Nigerian National Petroleum Corporation (NNPC) was established on

April 1, 1977 by the military government of the then General Olusegun

Obasanjo but since then it has been involved in an endless cobweb of

corruption and cesspit of ineptitude.

Mele Kolo Kyari was appointed as the 19th Managing Director of the

Corporation on July 8, 2019. Many critics of the Buhari led government

criticized him to the High Heavens as another northern appointment and

opted to throw away the baby with the bath water.

Days after his appointment, he unveiled Transparency, Accountability

and Performance Excellence (TAPE), a five-step strategic roadmap for

NNPC’s attainment of efficiency and global excellence.

According to a report done by Premium Times, He said the five steps

for realizing the objectives of TAPE were to ensure:

1.NNPC opened up its systems to public scrutiny;

2. Its operational processes were made transparent and accountable to

the Nigerian people and the government;

3.The new system would operate along with well-defined operational

processes, benchmarked against established global best practices by

world-class oil and gas companies;

4. Set the right operational cost structure, to guarantee

value-addition towards NNPC’s sustained profitability, and

5. Set achievable goals, priorities and performance standards and

criteria, by developing suitable governance structures for its

strategic business units, and the entrenchment of team-spirit, work

ethic and collaboration with all key stakeholders to achieve set

corporate goals.

So far the objectives of TAPE have been met.

He initiated bold minded reforms in the upstream sector. His

creativity saw an alternative financing deal for the Nigerian

Petroleum Development Company (NPDC). Within the last one year, Kyari

ensured the execution of a funding and technical services agreement

(FTSA) as well as a alternative financing deal for NPDC’s OML 13

valued at about $3.15 billion and OML 65 for $876 million. These

agreements resulted is a 32% and 21% incremental production output in

OMLs 40 and 30.

Also, 14 companies participated in the auction for the financing and

redevelopment of OML 119 operated by the NPDC. The twin offshore block

made up of Okono and Okpoho fields located approximately 50 kilometres

offshore south-eastern Niger Delta operated by ExxonMobil.

Kyari described OML 119 as one of NNPC’s critical projects, which

aligns with the Federal Government’s aspiration to boost the country’s

crude oil and gas production, growing reserves, and monetizing the

nation’s enormous gas resources.

He has also revised the unit costs for joint ventures (JV) and

production sharing contracts (PSC).

He has also been able to save costs for the government through NNPC’s

revision of joint venture and production sharing contract (PSC)

operators’ unit costs, down to $19 per barrel and $18.3 per barrel,

from the initial $31 per barrel and $24.3 per barrel respectively.

Concerned about the impact of high oil production cost on the

government revenue, Kyari has, in the last one year, demonstrated

commitment to achieving the industry target of reducing oil production

cost to an average of $10 per barrel by 2021.

Under Kyari’s management in the last one year, the NPDC also acquired

four new oil acreages (OMLs 11, 24, 116 and 98, while recovering debts

for gas supplies totaling about N16.64 billion and $3.55 million.

There has also been sustainable average oil output under his pragmatic

leadership. Despite the challenges in the oil and gas industry, Kyari

was able to ensure the NNPC subsidiary in charge of the government

investment interests in the oil industry joint venture projects, the


Petroleum Investment Management Services (NAPIMS), was able to achieve

an average oil production capacity of 1.8 million barrels per day

prior to the recent decision by the Organization of Petroleum

Exporting Countries (OPEC) to cut its members’ output to boost crude

oil prices and stabilize the oil market.

Kyari has also supported NAPIMS to secure external funding for the

SPDC’s Santolina 3 projects expected to deliver an average production

of 16,300 barrels of oil per day, while also superintending over the

resolution of the Escravos gas-to-liquids (EGTL) cost dispute with

Chevron Nigeria Limited (CNL).

Nigeria LNG Train 7 FID

For almost two years, the final investment decision (FID) for the

construction of Train 7 of the Nigeria LNG project was delayed. The

NNPC and other partners in the project could not come together to

commit to the development of the project.

The outbreak of the coronavirus last year worsened the problem as the

global economy came to a virtual standstill. But, Kyari did not allow

all the crises to rob Nigeria of all the benefits derivable from the

execution of the project.

At the height of the global pandemic, Kyari ensured the NNPC and its

JV partners, including Shell, Total, and ENI, came together to execute

the NLNG T7 FID on December 27, 2019. He went ahead to mobilize for

the signing of the engineering, procurement and construction (EPC)

contract for the project awarded to the Saipem, Chiyoda and Daewoo

(SCD) JV Consortium.

The signing of the contract signaled the commencement of EPC

activities for NLNG T7 Project. On completion, the production capacity

of the six-train plant would expand exponentially by 35 per cent, from

the extant 22 million tonnes per annum (MTPA) to 30 MTPA, and boost

Nigeria’s competitiveness in the global LNG market.

The project has the prospects of further attracting foreign direct

investment (FDI) in excess of $10 billion to Nigeria.

The AKK Pipeline Project

Just as Nigerians were jubilating at the milestone on the Nigeria LNG

project, Kyari ensured President Muhammadu Buhari launched the EPC

activities on the 614 kilometers-long Ajaokuta–Kaduna–Kano (AKK)

pipeline project by NNPC last week.

Considered to be at the heart of the country’s economic growth, Kyari

has pursued the execution of the project with single-minded commitment

to see that it is completed on schedule in 2023.

The pipeline project represents phase one of the 1,300 kilometre-long

Trans-Nigerian Gas Pipeline (TNGP) project being developed as part of

Nigeria’s Gas Master Plan to utilize the country’s surplus gas

resources for power generation as well as for consumption by domestic


The TNGP project also forms part of the proposed 4,401 kilometre-long

Trans-Saharan Gas Pipeline (TSGP) to export natural gas to customers

in Europe.

Uninterrupted Fuel Supply

Prior to his appointment, hiccups in the supply of petroleum products

were a common feature in the Nigerian economy. The incessant

disruptions in fuel supply affected Nigerians’ ability to plan

effectively. They could not predict when the next fuel scarcity would

hit the country and send families to spend days and nights in long

fuel queues at filling stations.

Kyari leveraged on the existing Direct-Sales-Direct-Purchase (DSDP)

product supply arrangement he started and sustained while in office as

the GGM COMD of the NNPC, to guarantee energy security for Nigerians.

 2020 crude oil lifting contracts

In August 2019, a few weeks after his inauguration, Kyari announced

the issuance of fresh crude oil lifting contracts to 15 local and

international oil marketing and trading consortia/companies under the

2020 DSDP scheme.

With the country’s four refineries still operating far below their

installed capacities, and unable to produce enough to meet the

country’s daily national consumption need for petroleum products, the

15 contractors were to utilize the 445,000 barrels per day crude oil

allocation for local refining to bring into the country petroleum

products for domestic consumers.

But, Kyari said the difference in the latest issuance of the oil

lifting contracts was that this would be the first time since the DSDP

programme began in 2016 that the NNPC would officially be making

public the list of all the contract winners.

Kyari said revealing the names of the beneficiaries to the public was

a new normal for NNPC as part of the policy direction, pledge and

commitment of his management to transparency and accountability in

NNPC’s operations going forward.

To sustain the era of uninterrupted supply of petroleum products,

Kyari assured that his management would continue to revamp downstream

infrastructure to guarantee availability of 90 per cent pipeline for

fuel distribution; ensure automation of the fuel distribution system,

and grow NNPC Retail’s market share to 30 per cent.

 “Operation White”

To build on the success of the DSDP programme, entrench energy

security and deepen transparency in petroleum products supply and

distribution, Kyari, in collaboration with the Minister of State for

Petroleum Resources, Timipre Sylva, initiated an innovative programme,

“Operation White”, to curb products diversion and smuggling, and

ensure that the entire country was kept continuously wet with

petroleum products.

Under the initiative, a team of 89 officials drawn from various

government agencies involved in the petroleum products supply process

was inaugurated, tasked with the responsibility of monitoring and

tracking fuel distribution and consumption throughout the country.

The team included representatives from the NNPC, Department of

Petroleum Resources (DPR), Petroleum Products Pricing Regulatory

Agency (PPPRA), Petroleum Equalization Fund (PEF) as well as the

Department of State Security (DSS).

Under the initiative, Kyari ensured actual volumes of petroleum

products imported and consumed in the country were authenticated. The

NNPC now has a customer express solution and online marketers’ portal,

which is live for oil majors and Depot and Petroleum Products

Marketers Association of Nigeria (DAPPMAN) to monitor loading and

lifting of petroleum products from NNPC depots. Plans are on course

for the system to go live for members of the Independent Petroleum

Products Marketers Association of Nigeria (IPMAN) by the end of the

second quarter of 2020.

These achievements are by no means all that can be credited to the Lee

Kuan Yee like visionary leadership of Kyari and we in the media have

the duty to praise our public officials when they do well so that we

don’t become permanent Rottweilers.

A Daniel has indeed come to judgement!

Erasmus Ikhide is a media strategist and can be reached via:; 08035032123