One of the main criticisms of NNPCL has been its lack of transparency. The new board must ensure that the corporation’s financial records are publicly accessible and that revenue generated from oil sales is properly accounted for. The Nigerian Extractive Industries Transparency Initiative (NEITI) has repeatedly highlighted discrepancies in oil revenue reporting—these must be addressed.
By Abdulrahman Aliagan, Abuja
In a bold and unexpected move, President Bola Ahmed Tinubu has reconstituted the Nigerian National Petroleum Company Limited (NNPCL) board, sacking its Group Chief Executive Officer (GCEO), Mele Kyari, and board chairman, Pius Akinyelure. The decision, announced by presidential spokesperson Bayo Onanuga, marks a significant shift in the leadership of the nation’s oil behemoth, raising questions about the future direction of the company and the oil sector at large.
The president’s directive also affected all other board members appointed alongside Kyari and Akinyelure in November 2023. In their place, an 11-member board has been inaugurated, with Engineer Bashir Bayo Ojulari as the new GCEO and Ahmadu Musa Kida as the non-executive chairman.
While leadership changes in the NNPC have been routine in Nigeria’s political landscape, the significance of this latest shake-up lies in its timing and the mandate given to the new team. Tinubu, invoking the powers granted under Section 59, Subsection 2 of the Petroleum Industry Act (PIA) 2021, has set a clear agenda: enhancing operational efficiency, restoring investor confidence, boosting local content, driving economic growth, and advancing gas commercialisation.
But will this latest restructuring truly transform the NNPCL into the efficient, corruption-free, and profit-driven national oil company it was envisioned to be, or is this just another round of political maneuvering that fails to address the deep-seated issues plaguing the sector?
The Nigerian National Petroleum Corporation (NNPC) was, for decades, synonymous with inefficiency, bureaucratic bottlenecks, and allegations of corruption. As the state-owned enterprise responsible for managing the country’s vast petroleum resources, it had long been criticised for opacity in its operations and a lack of accountability.
In a bid to reform the corporation, the Petroleum Industry Act (PIA) was signed into law in 2021, paving the way for the transformation of NNPC into a commercial entity, NNPCL. The transition was meant to bring about operational independence, transparency, and financial discipline—key ingredients needed to position the company as a globally competitive energy player.
Under the new structure, NNPCL was incorporated as a limited liability company, meaning it was to be run like a private enterprise, with the goal of turning a profit rather than merely being a government agency dependent on public funds. This shift was supposed to help curb corruption, enhance accountability, and improve efficiency in the sector, making Nigeria’s oil industry a major driver of economic growth.
However, despite these lofty ambitions, NNPCL under Mele Kyari continued to face significant challenges, some of which ultimately contributed to his removal.
Mele Kyari, appointed as NNPC GCEO by former President Muhammadu Buhari in 2019 and reappointed by Tinubu in 2023, was seen as a technocrat with a deep understanding of Nigeria’s petroleum sector. He spearheaded several initiatives, including the transition to NNPCL, the push for more oil exploration, and the Decade of Gas initiative aimed at repositioning Nigeria as a gas-powered economy.
However, Kyari’s tenure was marred by repeated allegations of corruption, mismanagement, and a lack of transparency in NNPCL’s financial dealings. The controversies surrounding the subsidy regime, crude oil theft, and unremitted oil revenues often placed him at the centre of public scrutiny.
One of the biggest stains on Kyari’s record was the handling of fuel subsidy removal. Despite the government’s claim that subsidy payments had ended, there were reports that NNPCL was still funding it through backdoor arrangements. This contradiction created confusion and fueled speculations about underhand dealings within the corporation.
Additionally, under Kyari, Nigeria continued to struggle with dwindling oil production due to oil theft, pipeline vandalism, and inefficiencies in the sector. Many industry stakeholders argued that his leadership failed to address these fundamental challenges, making it necessary for a fresh team to take over.
With the appointment of a new leadership team, expectations are high that the NNPCL will finally fulfill its mandate as a truly commercial entity that can drive economic growth and energy security. But for this to happen, the newly constituted board must address some key issues:
One of the main criticisms of NNPCL has been its lack of transparency. The new board must ensure that the corporation’s financial records are publicly accessible and that revenue generated from oil sales is properly accounted for. The Nigerian Extractive Industries Transparency Initiative (NEITI) has repeatedly highlighted discrepancies in oil revenue reporting—these must be addressed.
Oil theft remains one of the biggest challenges facing Nigeria’s oil industry. Billions of dollars in revenue are lost annually due to illegal bunkering and sabotage of oil installations. The new leadership must work closely with security agencies to implement foolproof measures against crude oil theft.
Nigeria’s dependence on imported refined petroleum products has been a major economic drain. While the Dangote Refinery is expected to ease this burden, NNPCL must also prioritize revamping the country’s existing refineries and investing in new ones to achieve self-sufficiency in petroleum refining.
A key reason for the restructuring of NNPCL was to make it more attractive to investors. The new board must create a stable policy environment that encourages local and foreign investment in the oil and gas sector. Clear regulations, respect for contractual agreements, and a commitment to the rule of law will be essential.
Nigeria has one of the largest proven gas reserves in the world, yet the sector remains largely underdeveloped. The new NNPCL board must fast-track gas commercialisation projects and expand the use of gas for domestic consumption, power generation, and industrial development.
Unlike its counterparts like Saudi Aramco and Petrobras, NNPCL has struggled to be profitable. The new leadership must implement policies that will drive efficiency, eliminate waste, and ensure that NNPCL operates as a revenue-generating enterprise rather than a government-dependent entity.
In conclusion, President Tinubu’s decision to sack Mele Kyari and overhaul the NNPCL board is a defining moment for Nigeria’s oil sector. While leadership changes are common in the industry, this particular move comes with heightened expectations, given the urgent need for reforms in the sector.
The new board, led by Bashir Bayo Ojulari, must seize this opportunity to reposition NNPCL as a transparent, efficient, and profitable national oil company. Anything short of this will mean another cycle of mismanagement, missed opportunities, and continued economic setbacks for Nigeria.
The oil sector remains the backbone of Nigeria’s economy. If managed effectively, it can drive national development, create jobs, and improve living standards for millions of Nigerians. The time for half-measures is over—NNPCL must finally deliver on its promise.
