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Our Plan Is To Transform NNPC To A World Class Company – Kachikwu

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Tahir Sherriff

For many of the journalists who were gathered at the Amphitheater inside the NNPC Towers in Abuja last Friday, the bulk of questions were around new objectives of the Nigerian National Petroleum Corporation. More precisely, as well, what newly sworn in Minister of State for Petroleum Resources and Group Managing Director of Nigerian National Petroleum Corporation, NNPC, Dr. Ibe Kachikwu was doing to end a lingering and destabilizing fuel scarcity that had stalled the economy for close to six months.

For Kachikwu, it was another opportunity like previous others to lay the ground rules around existing realities within the corporation and inform an eager Nigerian population about what to expect in the coming years. The corporation which had stood its ground as the back-bone of the Nigerian economy has been ushered into a new wave of local and international dynamics to which Kachikwu explains it can overcome through a deliberate and thorough restructuring of its internal challenges of human resource management and the broader goals of keeping it afloat, and maintaining it as a profit geared organization.

“We have to remember that this organizations ambition rests on the tripod of transparency, accountability and probity. But more than that, that it belongs to Nigerians and we have to ensure that we keep the wheel of the state running, and move forward into transforming it into a world class oil and gas company.”

Refinery Capacity Utilization by BudgiT

Refinery Capacity Utilization by BudgiT

Kachikwus restructuring policy for the NNPC aims to engineer a performance driven and focused approach to management at all levels. This he says is inclusive of broad levels of organizational right-sizing and a possible downsizing of the industry. At the upstream end, the new approach aims to address alternative ways to: financially engineer the sector for profitability, reduce cost of operations, increase turn-around time for projects, increase production levels and begin focused investments in the area of new ideas and new technology.

“Some of the best brains in Nigeria are here in the NNPC, our restructuring approach will include identifying people with a set of skills required for this institution and placing these people in the right places. Our new partners and venture companies will be lead by people who know how to run organizations from conception to completion and success.”

What position is the NNPC currently in?

Refined PMS product from NNPC in October 2015

Refined PMS product from NNPC in October 2015

The NNPC has not had the best of times in recent years. With former Minister of Petroleum Diezanni Allison Madueke still under arrest for money laundering at the United Kingdom and earlier reports from former Governor of the Central Bank Sanusi Lamido Sanusi that a staggering $2billion remains un-accounted for in the organizations, it is quiet clear that the institutions primary objectives will not be very far away from plugging loops for the colossal levels of corruption that had wrecked havoc upon it and the nation. The organization recorded close to N180billion in deficit losses on a monthly basis.

“All the problems we have been caused by some of us here at the NNPC, but not all of us contributed to that. A lot of people were disillusioned by the state this organization has been in, but a lot more remain resourceful and committed to turning this around. We must stress that sometimes, the burden this institution faces is almost un-imaginable. This institution manages a chain of sister organizations and ventures, close to 5,000 pipe-lines, tens of thousands of workers along side three refineries and still has to deliver on its mandates of supplying energy. This is a lot of work.”

The NNPC clearly is in debt to its eye-balls to marketers, a cost it has carried on for close to a year and extracts of the audit released in February shows that it may also need to refund more than the $1.48 billion.

What does this translate into for Nigerians in 2016?

Fuel prices on the rise at local filling station in Zaria Nigeria

Fuel prices on the rise at local filling station in Zaria Nigeria

For most Nigerians, especially as the year runs out, the biggest question as well is what will become the cost per liter for the average Nigerian buyer. The Minister re-framed the organizations stand on the fuel price issue by stating that it was taking a responsibility approach to cost reduction with the objective of cutting down costs by the organization to help keep the price at a band between 87 and 97 in the coming months.

At present commercial activities are grinding to a halt due to the un-availability of PMS which has complemented the power sector over the years. Cars, trucks and buses are parked beside the road at different states in Nigeria and the lingering nature of this particular fuel crisis is beginning to take its toll on peoples opinion about the new governments performance. For the NNPC however, the task before it is more geared towards getting this colossal government machinery to work, deliver, and generate money.

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