The Nigerian National Petroleum Company (NNPC) Limited started its activities for the week at the World Bank Nigeria Development Update in Abuja, with a fresh commitment to the ongoing reform in the oil and gas sector in Nigeria.
The event which held at the Transcorp Hilton Hotel in Abuja saw the Group Managing Director (GMD)/Chief Executive Officer (CEO) of NNPC, Malam Mele Kyari insisting that the reforms in the oil and gas sector were unstoppable.
Kyari noted that the Petroleum Industry Act (PIA) had provided a clear legal framework for the process.
He explained that the PIA was very comprehensive in its provisions on the operations and responsibilities of the industry players as well as allocation of timelines for the categories of various activities.
“There is a reform going on particularly in the energy sector and no one can stop it,” he said.
The NNPC CEO continued: “For instance, the issue of removal of subsidy is now guided by law and you have to go back to the National Assembly to stop it.
“Also the Act provides for issues around the relationship between the national oil company and other institutions of government in relation to timelines, which is a clear departure from the past,” the Kyari said.
On the issue of subsidy, he noted that it was no longer realistic for the Federal Government to continue to bear the burden of the monthly provision of the sum of N250billion for petrol subsidy.
This, he said was in spite of the government’s intention and efforts to continue with the subsidy in the interest of Nigerians.
He added that the new NNPC as established under the PIA would soon resort to invoicing the government to enable it to recover the cost of providing the petrol.
On their part, the Minister of Finance, Mrs. Zainab Ahmed, and World Bank’s Country Director for Nigeria, Mr. Shaudhuri Chaudhuri, said that the removal of petrol subsidy had become inevitable as the government requires the funds used for the subsidy to invest in other critical sectors of the economy that would make life easier for Nigerians.
Speaking at the event, the Governor of Kaduna State, Malam Nasir El-Rufai and the World Bank’s Lead Economist for Nigeria, Mr Marco Hernandez commended the GMD for his forthright leadership in the execution of the oil and gas sector reforms.
Meanwhile, the NNPC has called on members of the Independent Petroleum Producers (IPPG) to recommend new strategies to tackle the challenges facing the Nigerian oil and gas industry.
The NNPC GMD/CEO, Malam Mele Kyari, gave the charge while hosting the new executive of the IPPG in his office at the NNPC Towers, Abuja, on Tuesday.
The GMD said that the current reality in the petroleum industry called for a clear understanding and commitment of all players in order to reposition the industry for enhanced performance.
He said though the PIA had eliminated the uncertainty and lack of clarity that had bedeviled the industry in the last 25 years, there was need for practical steps by players in the industry to redress the situation.
“There are immediate problems which we know.
“We found ourselves in this situation because everybody failed, so we have to bring everyone to the table to accept this reality and come up with an intervention that is different, not what we have always done,” Kyari said.
He disclosed that significant progress had been made in reducing the incidences of crude oil theft and called for all hands to be on deck to work towards eliminating the menace.
On gas pricing, he said though the country was undersupplied, the PIA had created an enabling environment for producers to recover their cost through a flexible structure that had been put in place by the government.
He assured the group of NNPC’s readiness to collaborate with them.
Speaking earlier, Mr. Isah Abdulrasaq, Chairman of the IPPG which is a group of indigenous oil companies operating in the Upstream sector, commended the GMD for his role in the passage of the PIA and his appointment as the CEO of the NNPC Limited.
He said that as a limited liability company under the Companies and Allied Matters Act (CAMA) the new members of IPPG can engage both parties to learn from each other.
Abdulrasaq called for the inclusion of IPPG on the PIA Implementation Steering Committee in order to facilitate and achieve a collaborative and inclusive approach to the reforms.
On the absence of funding as a result of the global energy transition, Abdulrasaq called for the establishment of an energy bank to provide funding for the petroleum industry.
He disclosed that indigenous players in the industry currently produce 252,000 barrels of crude oil per day and 650million standard cubic feet of gas per day, amounting to about 50 percent of the nation’s gas requirement.
The IPPG leader called on the government to undertake international advocacy for the consideration and recognition of gas as a transition fuel in order to attract investment into the sector.
The chairman was accompanied on the visit by the executive members of the group, including the immediate past chairman, Engr. Ademola Bero.
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