Nigeria To Cede Expired Oil Fields To State Oil Corp

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The group managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has hinted of the federal government’s move to cede some expired oil fields to its subsidiary, the Nigerian Petroleum Development Company (NPDC).

Kyari also disclosed that the corporation would leverage on the existing Direct-Sales-Direct-Purchase product supply arrangement to guarantee energy security for the country.

While receiving, yesterday, in Abuja a delegation from ENI/Agip led by the executive vice chairman, sub-Saharan African Region and chairman ENI Exploration and Production in Nigeria, Mr. Brusco Guido, Kyari said that “on the issue of some of the expired assets, the there is no immediate plan to renew the licenses as the federal government is interested in having the exploration and production arm of the NNPC, the Nigerian Petroleum Development Company (NPDC) to operate them.”

He promised to work closely with ENI/Agip to speedily resolve all pending issues that led to the suspension of cash-call repayment. Kyari explained that the failure to pay cash-call arrears in the last three months was meant to ensure that the issues surrounding the agreement were settled.

“The money is there. We will pay as soon as the issues are resolved by the end of the week,”Kyari stated, adding that on the Okpai Independent Power Project, the issues that led to the delay in payment had been resolved and payment would be effected as soon as possible.

“We will work with you. You can count on us”, he assured the Agip team and urged them to fast-track the phase 1 of the rehabilitation of the Port Harcourt Refinery to ensure that it was delivered before the scheduled date of October 2019.

In his response, Guido said that the company was aligned with the GMD’s three-point agenda of growing reserves, production, and cutting cost.

He, however, listed a number of challenges that had hampered its operation and urged the NNPC management to help resolve them in order to meet its target of growing production from the JV assets by 30 per cent over last year’s rate.

At a maiden town hall meeting with staff of the corporation at the NNPC Towers, Abuja, yesterday, Kyari assured them that his management would continue with the current efforts to revamp downstream infrastructure to ensure 90 per cent pipeline availability, automation of processes in product distribution system, and growth in NNPC retail’s market share to 30 per cent.

Kyari charged the staff to support his management to deliver on all the objectives and brace up for greater challenges ahead, noting that as the main enabler of the Nigerian economy, the NNPC must entrench processes to ensure steady production growth and assured profitability across all tiers of the industry.

The highpoint of the meeting was the presentation of his agenda titled: “Roadmap to Global Excellence”, which encapsulates the strategic focus of his management.

Under the roadmap, NNPC operations would be anchored on Transparency, Accountability and Performance Excellence (TAPE).

The NNPC boss explained that while the transparency component of the agenda was aimed at maintaining positive image, share values of integrity and transparency to all stakeholders, the accountability leg of the campaign would ensure compliance with business ethics, policies, regulations and accountability to all stakeholders.

In terms of the two-prong item of Performance Excellence, Kyari said that the idea was to entrench a high level of efficiency anchored on the efficient implementation of business processes which would also emplace an appropriate reward system for exceptional performance among the workforce.

Kyari said that under his watch, the NNPC would continue to give attention to the safety and the security of personnel and assets while creating a business environment that would be anchored on technology and innovation to improve efficiency which would ultimately create the desired outcome of strengthening the NNPC brand.

On the issue of domestic refining capacity, the NNPC boss said that the corporation would pursue the ongoing refinery rehabilitation to a successful conclusion while deliberate efforts would be made to encourage the establishment of new private refineries to ensure that the country becomes a net exporter of refined petroleum products.

He said that the corporation would sustain the ongoing exploration activities in the inland sedimentary basins to improve reserve while pursuing a programme to grow the NPDC, adding that reports from the exploration drilling in the Kolmani River in the Gongola Basin were very encouraging.

NNPC Pledges Fiscal Discipline, Remittances To Federation Account

Meanwhile, the chief financial officer of NNPC, Umar Ajiya has said that the corporation would enhance fiscal discipline which is a key priority agenda of Kyari.

Ajiya said that NNPC would henceforth ensure prompt payment of proceeds from its operations to the Federation Account and steady supply of petroleum products to Nigerians as he addressed a strategy session with the heads of account departments of the corporation’s subsidiaries in Abuja.

The meeting was part of the initiatives to rally the corporation’s business leaders in support of the new management’s agenda. Ajiya stated that the strategic role of Account Directorate was crucial to the realisation of the new GMD’s goals and objectives, stressing the need for all managers of accounts to improve on deliverables.

“This important meeting is to ensure that the management of Finance and Accounts Directorate corporate wide are properly briefed on the direction of the new NNPC management and work as a team to deliver on the GMD’s commitments to the country among which are: paying what is attributable to the Federation Account by way of FAAC remittances and meeting up with obligations to all stakeholders as and when due”, he said.

The CFO listed eight key areas where the Accounts Directorate can help in actualising the GMD’s agenda to include: liquidity management, financing for growth, business process improvement, budget and budgetary controls payment system, cost control/discipline, real-time financial reporting, capacity building, autonomy for SBUs, and maintenance of pension funding.

He stated that the GMD’s mandates and commitments have financial implications and pointed out that the directorate was ready to implement the Direct Debit and Cash Sweep mechanism to grow other businesses for a more viable corporation.

Ajiya explained the concept as system whereby “the corporate has the right to debit SBUs with excess cash flow by cash-sweeping the excess for the purpose of investing in other SBUs by way of inter-company loan or equity contribution. This way, we can grow the several businesses to their full potentials”.

Ajiya disclosed that under his watch; SBU autonomy would be enhanced, adding, however, that such freedom must be tied to the responsibility of going beyond self-funding to contributing to the general purse. He equally charged his team to embrace process automation for their individual Strategic Business Units (SBUs).

NNPC, Budget Office Strategise On Budgetary Framework

Also yesterday, the NNPC and the Budget Office of the Federation commenced extensive round-robin stakeholders’ engagement designed to seek effective coordination of the 2020-2022 medium term fiscal frameworks.

The meeting which began at the NNPC Towers on Tuesday had in attendance Kyari, and his top management team in parley with the Budget Office led by the director-general, Mr. Ben Akabueze and his team.

Kyari said that the parley marked the beginning of an extensive collaboration with the Budget Office to harmonise strategies geared towards ensuring optimisation of resources aimed at improving the corporation’s revenue generation ability.

He said that as the main enabler of the Nigerian economy, the NNPC would work with the Budget Office to promote transparency and enhance the prevailing sanity in the reporting of oil and gas revenue remittances to the Federation Account.

Earlier in his address, Akabueze said that it was important to meet with the NNPC management to drill down on all issues and possible fiscal scenarios ahead of the 2020-2023 budgetary frameworks.

He said that the budget office was looking up to fruitful deliberations with the NNPC strategy team in the weeks and months ahead to smoothen the process of achieving a win-win fiscal regime. Akabueze noted that despite the push to diversify the nation’s revenue base, the oil and gas sector remains the main earner of foreign exchange in Nigeria.

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