Nigeria: How We Created Opportunities Out of Year 2020 Challenges - NNPC

29 December 2020

The year 2020 is a year like no other. A year that threw up a health challenge which brought the whole world to its knees.

The coronavirus pandemic precipitated the lockdown of social and economic activities across the world, displacing the fortunes of many nations and businesses with the Oil and Gas Sector not being an exemption. 2020 is a year that brought West Texas Intermediate crude futures to below zero dollars. A calamity never seen before.

However, like the hot fire that produces the finest steel, the challenges that Covid-19 threw at humanity brought the ingenuity and astute management skills of the NNPC Group Managing Director and his team to the fore.

Supported by the entire staff of the Corporation, NNPC conceived and implemented innovative business continuity strategies which steered the State Oil Company to achieve unprecedented feats including those which had hitherto proved elusive.

An outstanding example of this is the milestone achievement of 3million barrels per day, bpd, crude oil production in April 2020.

This was despite the nation being on lockdown to mitigate the effects of COVID-19 in Nigeria, which resulted in most staff of the Corporation working remotely.

Nonetheless, due to the unavoidable impacts of the pandemic including the OPEC+ production curtailment agreement, as at November 2020, average daily crude and condensate production from NNPC's Joint Venture and Production Sharing Contracts stood at 1.542Million barrels per day against the Corporation's initial 2020 target of 1.863Mbopd and an average daily gas production of 6.020billion cubic feet per day as against the 2020 plan of 6.243bcfd.

NNPC's upstream flagship company, the Nigerian Petroleum Development Company (NPDC) as at November 2020 also recorded a total oil and gas production output of Two Hundred and Sixty Nine Thousand barrels per day (269kbopd) and One point Five Billion Standard Cubic Feet of Gas Per Day of which the company's equity production stood at One Hundred and Sixty Three Thousand barrels per day (163 kbopd) and One point Three Eight Billion Cubic Feet of Gas Per Day (1.38bcfd) respectively.

It is imperative to note that the company would have achieved more but for the Nigerian government's determination to fully comply and support the efforts of OPEC and it allies to protect the global oil & gas industry in the face of the challenges brought on by the unprecedented drop in demand for the "black gold".

NNPC management's unrelenting determination to add value to the Nigerian economy through the oil & gas industry, culminated in the successful flagging-off by President Muhammadu Buhari on 30th June 2020 of the construction phase of the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project. The project, which was described as a game-changer by the President, is a section of the Trans-Nigeria Gas Pipeline (TNGP) with a capacity to transport about 2.2 billion cubic feet of gas per day of gas.

The AKK is expected to be fed from the existing domestic infrastructure with a capacity of over 1.5BCF/D which is being expanded by the Escravos Lagos Pipeline System 11 (ELPS 11) and Oben-Obiafu-Obricom(OB3) gas pipeline project. This has also reached 96.34 per cent completion and will double the capacity to over 3.5BCF/D.

The AKK project will also facilitate the development of three base Independent Power Plants (IPPS) in Abuja with the capacity of 1,350 Megawatts, Kaduna with 900 Megawatts and Kano with 1,350 Megawatts and stir the development of gas-based industries along its corridor and beyond.

Worthy of mention is that the AKK project, which was initially estimated to cost the nation $2.89billion was renegotiated down to $2.59 billion by the dynamic negotiating skills of Mallam Kyari and his leadership team hence saving the nation $300 million.

Still under the COVID-19 lockdown, the NNPC, under its able leadership, was able to rally shareholders of the Nigeria Liquefied Natural Gas (NLNG) to secure the Engineering, Procurement and Construction of Train 7, a feat that has kept so many industry watchers both locally and internationally applauding.

For the refineries, efforts towards their rehabilitation, which will ensure 90% capacity utilization is ongoing with phase one of Port Harcourt Refining Company Limited rehabilitation programme by Technimot SPA, Original Refinery Representative, completed.

Also, management has engaged NETCO/KBR as Project Monitoring Committee for PHRC, WRPC and KRPC rehabilitation. The phase 1 of WRPC Rehabilitation which includes the Technical Audit has commenced and the report expected.

The resilience and performance excellence of NNPC was felt at the pump by all Nigerians across the country as zero fuel queues were recorded as a result of seamless and sustained supply of Premium Motor Spirit otherwise known as petrol throughout the year with availability of complementary products in sufficient quantity. The Corporation, throughout the year, maintained a 60-day pms sufficiency in reserve.

In the year under review, the NNPC achieved 38% pipeline availability, sustained system 2B pipeline operations with -3.9% average variance and moved 2.696m3 (cubic meter) of products across the entire pipeline network by October 2020.

Equally worthy of mention is the automation of downstream operations with the deployment of Customer Express Solution and Online marketer portal now LIVE which enables marketers to procure petroleum products online from Petroleum Products Marketing Company in any part of the country without human interface.

The automation of vessel management and chartering portal is also in progress awaiting operationalization of Shipping Strategy.

This has enabled PPMC to achieve 82% Implementation of ISO Certification.

NNPC Retail Limited, one of the downstream subsidiaries of the Corporation launched its lubricants on 28th February 2020 with a record of 0.18 million sales as at October and achieved a market share of 25% (exclusive of figures for IPMAN) as at Q3 2020. The company also recorded another milestone with the launching of Autogas as part of the National Gas Expansion Project on 1st December, 2020.

NNPC Retail Limited is also digitizing its operations under Mallam Kyari in an initiative that would enable the full automation of the company's business value chain, from the sourcing of products to storage, to how the company's products are moved from point A to point B and how they get to its filling stations, how customers book for products, how they obtain and pay for the products online.

The full automation of the processes would make business transactions between the company and its various external stakeholders seamless, faster, efficient and transparent. The programme would provide a win-win scenario for both the company and the customers.

To take the Transparency, Accountability and Performance Excellence (TAPE) management persuasion a notch higher, the NNPC published its 2018 and 2019 Audited Financial Statements, a feat which further validates its enlistment as a partner company of the Extractive Industries Transparency Initiative (EITI).

As at today, the Finance and Account Directorate has also emplaced and sustained timely remittance to the Federation Accounts Allocation Committee(FAAC), ensured crude cost are now settled within 90 days, ahead of FAAC meetings and eliminated unjustifiable deductions thereby improving remittances to FAAC.

In like manner, the Corporate Services Directorate has enhanced NNPC Remote Work Capability using Microsoft Teams, deployed Enterprise Content Management (ECM) and automated the Management Promotion and Performance Management processes.

It is noteworthy that these automated processes as well as the remote collaboration tools introduced in line with the TAPE agenda considerably reduced staff travel and other expenses associated with it and resulted in huge cost savings for the Corporation.

In addition, the Corporate Services directorate also successfully concluded the recruitment and on-boarding processes for the Graduate Trainees that have all reported for duties.

In keeping fate with stakeholder management, the NNPC has engendered an improved relationship with the National Assembly especially in their statutory oversight duties over the Corporation.

To keep NNPC's over 200million shareholders abreast of its activities, the Corporation has in the period under review, improved, regularly produced and aired the weekly Oil and Gas Forum on NTA Network and Radio Nigeria; produced the monthly NNPC News/Quarterly Magazine, published all the approved NNPC Monthly Financial and Operations Reports, published the 2018 and 2019 Audited Financial Statement on the NNPC Website, occasionally provided live coverage for tender bid openings and published the list of qualified bidders on the website and constantly issued press releases to the media in line with the Transparency, Accountability and Performance culture the current leadership is entrenching in the Corporation.

Aside from ensuring the continued operation of its core businesses, NNPC saw the pandemic as an opportunity to utilize its leadership position in the Nigerian oil & gas industry to rally all stakeholders in the upstream, midstream and downstream sectors to raise a whopping sum of N21billion in support of the Federal and State Governments in the face of the COVID-19 pandemic.

The intervention group was able to deliver medical infrastructure in form of permanent Emergency and Infectious Diseases Hospitals across the six-geopolitical zones in the Country, which will outlive COVID-19. Equally, isolations centres, ambulances, ventilators and other medical consumables were delivered to the 36 states and Federal Capital Territory.

In a similar vein, the recent launch of NNPC Health Maintenance Organization with five unique products by the Ventures and Business Development Directorate is seen by many as the right step in the right direction that would further improve the nation's healthcare delivery system.

The year 2020 can be regarded as a very eventful and remarkable year in the life of NNPC which was established 43 years ago.

Despite the myriads of challenges thrust on the Corporation by covid-19, Mallam Kyari and his team are poised to break new grounds for the company in the years ahead.

With the commitment and determination of the current NNPC Leadership to be undeterred in doing the right things which best serve the interest of the Corporation and her shareholders; the future surely looks very promising.

Vanguard News Nigeria

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