- Downstream operators insist on deregulation
- Oil price jumps to $64 on Iran, US tension
The Organisation of Petroleum Exporting Countries (OPEC), Nigeria Extractive Industries Transparency Initiative (NEITI) and the operators in the downstream sector of Nigeria’s oil and gas industry have welcomed the appointment of Mr. Mele Kyari to replace Dr. Maikanti Baru as the new Group Managing Director of the Nigerian National Petroleum Corporation (NNPC).
This is coming as crude oil price soared more than five per cent higher yesterday after Iran shot down a United States military drone, raising fears of a military confrontation between Tehran and Washington.
Kyari was appointed by President Muhammadu Buhari to take over from Baru on July 7, as the 19th Group Managing Director of the national oil company.
Having served for three years since July 2016, Baru has become the third longest serving group managing director of NNPC, after Dr. Jackson Gaius-Obaseki, and Dr. Funsho Kupolokun, since the return to civilian rule in 1999.
With the recent appointment of Kyari, the NNPC has produced 10 group managing directors since 2008 and none, except Baru, stayed in office for up to two and a half years.
NNPC’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, who disclosed the appointment of Kyari yesterday, added that Buhari also appointed alongside Kyari, seven new Chief Operating Officers (COOs) for the corporation.
Kyari, a geologist, was Group General Manager, Crude Oil Marketing Division of NNPC before his new appointment.
He also became Nigeria’s National Representative to the Organisation of the Petroleum Exporting Countries (OPEC) from May 13, 2018.
Buhari also directed that the Kyari and the newly appointed COOs to work with the current occupiers of the various offices till July 7, 2019 towards a smooth transition on July 8, 2019, when their appointments would take effect.
The corporation, however, stated that the appointment of Mr. Farouk Garba Said (North West), who is replacing a retiring COO, is effective from June 28, 2019.
NNCP further outlined the newly appointed COOs to include COO, Upstream Mr. Roland Onoriode Ewubare (South-south); COO, Refining and Petrochemicals, Mustapha Yinusa Yakubu (North Central); COO, Gas and Power, Yusuf Usman (North-east); Chief Operating Officer, Ventures, Ms. Lawrencia Nwadiabuwa Ndupu (South –east).
Others include Chief Financial Officer, Umar Isa Ajiya (North West); COO, Downstream, Adeyemi Adetunji (South-west); COO, Corporate Services, Farouk Garba Said.
Ughamadu stated that Baru had congratulated the new appointees.
According to the NNPC, Kyari is a quintessential crude oil marketer with prerequisite certification and outfield pedigree in petroleum economics and crude oil and gas trading.
The corporation added that in the last 27 years, the new NNPC boss had traversed the entire value chain of the petroleum industry, with exceptional records of performance.
NNPC said under Kyari’s watch, the Crude Oil Marketing Division had recorded noticeable transformation in the management and sales of various Nigeria’s crude oil grades via an infusion of transparency and automation of the processes.
Kyari, who shares the same surname with Buhari’s Chief of Staff, Mr. Abba Kyari, is not related to the Chief Staff with those in contact with him during his 27 years at the corporation describing him as results-driven leader.
He led a team that proposed and managed the Direct Sales and Direct Purchase (DSDP) arrangement of petroleum products from 2016 to date, a process that saved the nation $1 million in 2016 when compared with the previous crude SWAP arrangement with products.
He also led various work teams in developing the Petroleum Industry Bill which ensured that government’s take in the Production Sharing Contract (PSC) arrangement is greatly enhanced, and contributed immensely in resolving the disputes with International Oil Companies (IOCs) arising from the various interpretation issues with the PSCs averting claims of $9 billion filed by the IOCs.
In a congratulatory message addressed to Kyari, which was obtained by THISDAY, the Secretary General of OPEC, Mr. Mohammad Sanusi Barkindo, described the appointment as well-deserved.
“On behalf of the members of the OPEC Economic Commission Board (ECB) and the staff of the OPEC Secretariat, may I convey our sincere congratulations on your recent well-deserved appointment as Group Managing Director of the Nigerian National Petroleum Corporation. We wish you every success in this important and challenging role, and many years of service to NNPC, and the country,”Barkindo said in the letter.
Barkindo added that the appointment did not come as a surprise, stressing that it is a testament to Kyari’s exemplary record and exceptional performance over the many years he has worked for the NNPC in a variety of strategic roles.
Reacting to the appointment, the Executive Secretary of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMA), Mr. Femi Adewole told THISDAY that the NNPC under Kyari should provide a level-playing field for all the marketers to compete.
According to him, Kyari, as the representative of the federal government in the oil and gas industry should also ensure quick deregulation of the downstream sector.
“Since he represents the federal government in this industry, he should create a level-playing field for all the marketers to compete. What do I mean by that? The NNPC gives major marketers petroleum products on credit. I am not saying that all DAPPMA members deserve to be given on credit but many DAPPMA members have the capacity and should also be given on credit. When NNPC deliver cargoes to the major marketers, they should also deliver to the DAPPMA members. He should also ensure that the sector is quickly deregulated,” Adewole explained.
Some other operators in the downstream sector, have also urged the new NNPC boss to introduce reforms that will deregulate the sector and resolve the problems of the refineries.
“Downstream operators are bleeding because of the monopolistic market. If he continues as the sole supplier of petroleum products, the sector will continue to suffer. Deregulation is the answer to the challenges facing the sector,” said a CEO of one of the oil marketing companies.
“My recommendation is that he should appreciate professionalism in all his policies. Merit and quality should be his watchword. Things should be done properly. NNPC should allow others to compete in the market,” another CEO told THISDAY.
Also in a statement issued yesterday in Paris, France, venue of the ongoing global conference of Extractive Industries Transparency Initiative (EITI), by NEITI’s Director of Communications and Advocacy, Dr. Orji Ogbonnaya Orji, the statement quoted the NEITI’s Executive Secretary, Mr. Waziri Adio, as describing the choice of Mele Kyari as a well-deserved appointment and an intimation of more openness and reforms in the national oil company.
Adio further said that Kyari is a well-known transparency champion and one who enthusiastically shares the principles, which underline the work of NEITI and the global EITI on good governance of the oil and gas industry.
The NEITI executive secretary explained that as a member of the global EITI working group on commodity trading transparency, Kyari’s appointment has placed him in a vantage position to push the frontiers of openness and reforms and to work more closely with NEITI and the global EITI to implement remedial issues in NEITI’s reports.
He added that the implementation of the findings of NEITI’s reports will not just be effective for operations of NNPC but also for optimisation of benefits of the oil and gas sector to Nigeria and Nigerians.
Adio recalled: “Just yesterday, Kyari participated at a session on the business case for state-owned enterprise and commodity trading transparency’ at the EITI global conference in Paris, France.
“And his commitments to the values of EITI are not in doubt. On behalf of the Board, Management and Staff of NEITI, I congratulate Kyari on this well-deserved appointment.
‘’We look forward to close collaboration between our two organisations in the interest of our country and we do hope that transparency and accountability will be taking notches higher and indeed mainstreamed in the operations of NNPC under his watch.”
Oil Price Surges 5% on Iran, US Tension
Meanwhile, crude oil price soared more than five per cent higher yesterday after Iran shot down a United States military drone, raising fears of a military confrontation between Tehran and Washington.
Also, expectations that the US Federal Reserve could cut interest rates at its next meeting, stimulating growth in the world’s largest oil-consuming country, and a drop in U.S. crude inventories also supported prices.
Brent crude, the global benchmark, was up $2.40, or 3.9 per cent, at $64.22 a barrel, while the US West Texas Intermediate crude rose $2.92, or 5.4 per cent, to $56.68 a barrel.
US President Donald Trump said Iran made “a very big mistake” by shooting down the US military drone that Tehran said was on a spy mission over its territory.
Asked if the United States would strike Iran in retaliation after Iran shot down an American drone, Trump said to reporters, “You’ll soon find out.”
The drone was downed in international airspace over the Strait of Hormuz by an Iranian surface-to-air missile, a US official said.
But Iran’s Revolutionary Guards said the drone was flying over southern Iran.
Tension has been rising in the Middle East, home to over 20 per cent of the world’s oil output, after attacks on two tankers near the Strait of Hormuz, a chokepoint for oil supplies.
Reuters reported that Washington blamed Tehran for the tanker attacks but Iran had denied any role.
Concern about slowing economic growth and a US-China trade dispute has pulled oil lower in recent weeks.
Brent had reached a 2019 high of $75 in April.
OPEC and allies including Russia agreed this week to meet on July 1-2, ending a month of wrangling about the timing.
The coalition known as OPEC+ looks set to extend a deal on cutting 1.2 million barrels per day of production.
The deal expires at the end of June.
Source: THISDAY
