Nigeria will Retain Crude-For-Fuel-Swap Policy Until Local Refineries Are Fixed – Mele Kyari

The Nigerian National Petroleum Corporation (NNPC) is to maintain the current policy of swapping crude oil for petroleum products until 2023 to guarantee uninterrupted supply of petroleum products, its Group Managing Director of Mallam Mele Kyari, has said.

According to him, the policy is being retained because the country’s refineries are still not fully operational to ensure steady fuel supply.

Also in line with his promise to reposition the NNPC, the corporation’s boss has taken bold steps to initiate reforms at the national oil company.

He has also charged members of his management team to work assiduously to deliver on the key priority areas of growing the nation’s crude oil reserves and production, ensuring steady supply of petroleum products and supplying adequate gas to meet the next level agenda of the federal government.

The NNPC boss told Bloomberg that the corporation would continue the annual swap programme until the refineries are fixed by 2023. The latest round of the swap programme, known as DSDP, will run until September 2020 and then be extended.

“The DSDP is a child of necessity and not a permanent arrangement. So, anytime we are able to meet our domestic petroleum products requirement, of course DSDP goes away,” Kyari said.

He added that for this year’s programme, NNPC is looking for 14 billion litres, or 14 cargoes monthly. According to him, a new target to revamp the refineries has now been set for 2023, starting with the 210,000 barrel per day capacity refinery in Port Harcourt.

A preliminary check by Maire Tecnimont SpA on the plant, due to be completed next month, will give the estimated cost of fixing it.

A similar check will also be done on the Warri and Kaduna refineries before repairs. He said: “What we are doing is to see how can we get our refineries back on course and how do we support others to increase local refining capacity.

“Ultimately, by 2023 we should be a net exporter of petroleum products, assuming we’re able to get Dangote refinery at full capacity and we’re able to fix our refineries.

A source at the corporation said a new wave of reforms was sweeping across the NNPC and the Nigerian Petroleum Development Company Limited (NPDC). As a result of this, a top official of the NPDC, told our partners that no fewer than 15 managers have been redeployed in what the source described as a “fumigation exercise,” to cleanse the place.

“The cleansing is ongoing and it will also get to the lower cadres of the corporation. The essence of the strategic reform is to enhance operational efficiency so that the NPDC will be meeting its obligations.

“The NNPC has injected new blood into the system and the redeployment has brought in fresh hands to drive the process of cleaning up the system and blocking leakages, thereby improving the revenue base in line with the vision of our new GMD,” the source stated.

According to the source, to give a fillip to the reforms and the wind of change blowing across the corporation, Kyari has ordered a zero-tolerance for graft policy, setting out to clean up the state-run oil corporation, its subsidiaries and business practices.

“Also, financial leakages have been plugged while decade-long corruption gang activities are being curbed by the new management team. “The focus of the spectrums’ down-to-earth reforms is transparency in their dealings and that official business and the corporations play strictly by the rules.

“The past week has witnessed massive redeployment of officials of the NPDC, a subsidiary of NNPC, to ensure transparency in their dealings and that official businesses and the corporations play strictly by the rules.

“It is also a clear indicator that this anti-corruption drive is far more than a one-off statement of intent and is now a fundamental tenet of the NNPC in line with the President Muhammadu Buhari administration’s vision for the oil and gas industry,’’ the source added.

In addition, it was gathered that the new NPDC leadership had written several letters to the JV partners warning them to fulfill their obligations to the host communities and refrain from diverting funds meant for the communities to pay themselves.

“For too long, too many officials working with some bands of contractors and JV partners have treated the state oil as personal estate. “And the new leadership has sent a very clear warning to them: That era has ended,” the top official said.

It was also learnt that the offshore facility for workers had been in a deplorable state and had become a safety hazard to the workers. “The facility was not maintained and has become a mess.

Joint Venture (JV) partners were not paying cash calls and not paying the host communities for industrial peace.

“The situation is so bad that the NTB, NNPC Tender Board had to shut down all contracts, hence the new Managing Director, Mansur Sambo, has been reviewing and reversing all bad contracts. “He has also embarked on vigorous debt recovery with millions of dollars owed to the NPDC.

“Those affected by the sweeping changes are currently fighting back and dishing out all sorts of propaganda and lies aimed at rubbishing the reforms carried out by the leadership,” the source added. Kyari had pledged to continuously entrench transparency, accountability and performance excellence across all the oil corporation’s operations.

“We will particularly focus on the growth of NPDC and to make it among the top three crude oil producing companies in the country within three years. On the gas sector, our strategic aspiration is to open the domestic market further to support improved power generation and the growth of gas-based industries,” the official stated.

Mele Kyari Tasks Management Team on Delivery of Key Priorities Meanwhile, keen on delivering on his mandate, Kyari yesterday charged members of his management team to work assiduously to deliver on the key priority areas.

He gave the charge to the Chief Operating Officers (COOs) of the various Autonomous Business Units (ABUs) of the corporation at a sign-off event held for the COOs to formally commit to the delivery of the key priority areas in Abuja.

He said all the Key Performance Areas (KPAs) and Key Performance Indicators (KPIs) were designed by inhouse experts without inputs from consultants, adding that it was an indication of the abundant talents within the corporation’s human resource base.

“I have the conviction that we can deliver on these KPAs and even do more. We have enormous goodwill from our various stakeholders and Nigerians that we can do things differently. Let me emphasise that our stakeholders have tremendous trust in us and it is only excellent performance that can sustain the trust they have in us,” he said.

According to him, the clear goal of his management is to drive an NNPC that is Transparent and Accountable with Performance Excellence (TAPE), stressing that the milestones for all the ABUs and Strategic Business Units (SBUs) would be delivered within the timelines.

Kyari added that the KPAs were the roadmap for growth and consolidation and his management would ensure effective stimulation of industrial growth in the country.

Tagged the Roadmap for Growth and Consolidation, Kyari’s new corporate vision of TAPE would ensure that all of NNPC’s seven directorates leveraged on technology and innovation to deliver on their KPAs. The KPAs also have clear-cut roadmap and strategies towards actualising the mandate.

For the Upstream Directorate, the KPAs are: growing the nation’s reserves and increasing production; while the KPAs for the Gas and Power Directorate include the expansion of the gas sector footprint towards stimulating industrialisation.

The Refining and Petrochemicals Directorate would focus on enhancing local refining capacity as its KPA, the Downstream Directorate would ensure efficient and seamless petroleum products supply to guarantee energy security for the country and ensure that the critical oil and gas infrastructure are secured, and the Ventures Directorate would work to ensure that the corporation’s new businesses are capitalised and commercialised.

For the Corporate Services Directorate, the KPAs are the development of the corporation’s human capital and excellent service delivery, while the Finance and Accounts Directorate is charged with ensuring financing for growth and effective liquidity management

Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010.
Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.