The new appointment in the Nigeria’s national oil company, the Nigerian National Petroleum Company Limited (NNPCL) has generated reactions from key industry stakeholders with high expectations for a resounding reforms to guarantee the country’s energy transition.
In the wake of the recent changes in the company, the hitches resulting to Nigeria consistently failing to meet its OPEC production quotas became topical.
In the views expressed by opinion surveys this is linked to large-scale oil theft, pipeline vandalism, community conflicts, and inefficiencies in NNPC Ltd.’s operations and management.
Strengthening security measures in oil-producing regions, establishing clear community engagement frameworks, and improving operational efficiency through technology and management reforms are critical to addressing these issues, they said.
In 2024,the country struggled to produce a daily average of 1.4 million barrels per day , according to data from Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which is the industry regulator, due to these challenges. A key figure in the industry, Dakuku Peterside, in has recent reports said priority for the new leadership must be to secure and ramp up oil production. Addressing the complicity of some NNPC Ltd. and Nigeria Navy personnel in oil theft will be crucial, added Peterside.
The NNPC Ltd. is seen as delaying in making Final Investment Decisions (FID) due to bureaucratic red tape, layers of embedded interests and political interference, and over-reliance on joint venture models where NNPC Ltd. expects international oil companies to finance projects.
A prime example is the stalled Brass LNG and Olokola LNG projects. One stakeholder attributed it to the nature of the joint venture model operated by NNPC. He likened it to a woman going to the market with her friend and banking on her friend to pay for both purchases.
Here, the NNPC, which is the landlord, plans to be funded by the tenant, the field operator.
The challenge is their refusal to comply with section 65 of Petroleum Industry Act (PIA) that has suggested that they migrate from unincorporated joint venture (uJV) to incorporated joint venture ( IJVCL) that will require joint upfront financing of projects at the beginning without the need of structure for ‘carry’ or cash calls”. The new leadership of NNPC must address this inefficiency and recklessness so that Nigeria and Nigerians can benefit from oil and gas resources. The former minister of state for petroleum resources, Timipre Sylva, once described Nigeria’s investment delays as “crippling to sectoral growth.”
Despite spending trillions of Naira on refinery maintenance, Nigeria’s four state-owned refineries remain non-functional.
The appointment of a new leadership team at the Nigerian National Petroleum Company Limited (NNPC Ltd.) has sparked fresh hope, noted Peterside.
However, history teaches us that leadership changes in Nigeria’s public institutions is often not a guarantee for remarkable positive changes . Each transition is seen as a potential turning point, yet the cycle of inefficiency, corruption and mismanagement persists.
This time, however, there is a distinguishing factor—NNPC Ltd. is now led by a technocratic board predominantly composed of industry professionals. This shift signals the possibility of meaningful change, but only if these experts can resist personal and corporate interests and genuinely serve national priorities. Will this be a turning point or another wasted opportunity? The answer will profoundly affect Nigeria’s economic stability and long-term economic health.
As Nigeria’s national oil company, NNPC Ltd. wields significant influence, managing the country’s vast oil and gas resources.
Its efficiency, or lack thereof, has far-reaching implications for government funding, economic stability, foreign exchange reserves, currency valuation, job creation, and investor confidence. A well-managed NNPC Ltd. could serve as the backbone of economic revival, while inefficiency could lead to a domino effect of economic crises.
The Nigeria Extractive Industries Transparency Initiative (NEITI) reports that the country lost over $46 billion to oil theft and operational inefficiencies between 2009 and 2020, underscoring the potential impact of a well-managed NNPC Ltd.
An ineffective NNPC Ltd. is not just a national disservice —it is an economic crisis in itself. The company’s mismanagement directly impacts the economy and national development projects.
Globally, state-owned oil companies have been instrumental in their nations’ economic development. Saudi Aramco is the most profitable company in the world, surpassing tech giants like Apple and Microsoft, with a net income of $161.1 billion in 2022. Petrobras in Brazil has driven economic expansion through strategic investments and governance reforms, generating $35.7 billion in net profits in the same year. Equinor in Norway used oil revenues to establish a sovereign wealth fund valued at over $1.4 trillion, ensuring long-term economic stability. While these national oil companies fuel economic prosperity in their respective countries, NNPC Ltd. has struggled with inefficiency, corruption, and chronic underperformance. NNPC Ltd. has the potential to match these achievements, but only if it undergoes serious structural and operational reforms.
A technocratic board raises expectations of professionalism and efficiency but also presents risks. Many board members have vested interests in private oil and gas companies, creating a high risk of conflict of interest and policy decisions that serve personal gains over national development. Transparency International has consistently ranked Nigeria’s oil sector among the opaquest in the world, with corruption and vested interests undermining effective governance. To dispel these concerns, the new leadership must demonstrate an unwavering commitment to transparency, accountability, and ethical governance. Key questions must be addressed: Will their private interests precede national interests? Can they implement policies that might negatively impact their business associates? How will transparency and accountability be maintained in the decision-making process? The ability of this leadership team to separate personal gain from national duty will be a defining factor in its success or failure.
Nigeria’s oil production costs, from 2023 data, are among the highest in the world. Saudi Arabia and Iraq produce oil at $10 per barrel, Russia and Norway at $20-$21 per barrel, while Nigeria produces at between $40 and $48 per barrel. Security costs ,burdensome logistics and infrastructure, inflated contracts and fraudulent procurement, and other corrupt practices contribute to these high production costs. The Cable, a Nigerian online publication quoting the National Security Adviser, Nuhu Ribadu, says that the country loses around 400,000 barrels of crude oil daily to theft and sabotage. By improving operational efficiency, adopting cutting edge technology and eliminating corruption, the new leadership could reduce the cost of production to $25-$30 per barrel—leading to a potential 75 per cent increase in oil revenue.
Between 2000 and 2020, according to House of Representatives investigation committee reports, NNPC spent over $25 billion on refinery repairs without tangible results. By today’s estimate, that money can be used to build 2 new refineries with a capacity of 225,000 bpd. NNNPC has the most inefficient refinery operations and expensive turnaround maintenance costs. The new leadership of NNPC has both a moral obligation and a national duty to make appropriate decisions on what to do with the refineries. Some national oil companies have sold off their refineries to focus on crude oil production and renewables , while others operate their refineries efficiently and generate profits.
The key questions are: Should NNPC Ltd sell the refineries to private investors? Or should it reform its operational structures for greater efficiency and adopt a new refinery management model?
In his opinion, Peterside said for decades, corruption and mismanagement have plagued NNPC Ltd. Political actors have used the company as a cash cow, opaque procurement processes, and delayed and unreliable financial disclosures. It is estimated that one-third of NNPC’s revenue is used to service political commitments that have nothing to do with the national economy. NNPC has attempted publishing its financial report in the past three years since PIB. Stakeholders say it is more of a ceremonial ritual than any serious attempt to be transparent. Unlike its peers, NNPCL does not accompany its audited financial statements with comprehensive operational reports. Being more transparent and professional in NNPC’s management should be a topmost priority of the new leadership.
To restore credibility, NNPC Ltd. must publish independently audited financial reports with full operational details, implement transparent procurement policies, establish zero-tolerance measures against corruption, and resist political interference in financial decisions.
Nigeria has 203 trillion cubic feet of natural gas reserves, yet these remain largely untapped due to a lack of critical infrastructure and poor pricing policies that deter investment. How did other nations do it to earn optimally from gas resources? Qatar became the world’s largest LNG exporter, generating over $100 billion annually from gas sales. Trinidad & Tobago built a robust petrochemical industry using gas resources . Norway used gas revenues to develop a $1.4billion sovereign wealth fund. These success stories demonstrate the transformative potential of natural gas when it is strategically managed and leveraged for comprehensive national development. Nigeria can draw valuable insights from these experiences to unlock the full potential of gas resources. Investing in gas infrastructure development, reforming pricing policies to attract investors, and developing a clear gas commercialisation strategy are essential steps toward unlocking Nigeria’s gas potential. As the International Energy Agency (IEA) points out, “Natural gas can be a bridge to sustainable energy security if managed efficiently.”
To ensure long-term sustainability, NNPC Ltd. must optimize asset utilization, especially in crude oil exploration and refinery operations, prioritize profit-driven decision-making over political interference, and streamline bureaucratic processes to boost efficiency. The company has attempted an Initial Public Offering (IPO) three times between 2018 and 2023, failing each time due to a lack of political will and transparency issues . Listing NNPC Ltd. on a foreign stock exchange such as New York or London could attract investors and strengthen corporate governance, following the examples of Saudi Aramco, Petronas, and Petrobras. Fast-tracking the promised Initial Public Offering (IPO) on major stock exchanges is essential.
NNPC stands at a critical crossroads. With exemplary leadership and reforms, Nigeria’s economy can be transformed, global investment can be attracted, and the potential of its vast oil and gas resources can be maximized. However, if these necessary reforms are not implemented, history will repeat itself, and Nigeria will continue to suffer from inefficiencies and corruption. “Nigeria’s oil sector has the potential to be the backbone of our economy,” admitted Mele Kyari, immediate past Group CEO of NNPC Ltd., “but only if we make the hard decisions now.”
The responsibility now lies with the new leadership: Will they seize this opportunity or squander it like their predecessors? Will this new leadership deliver, or will history repeat itself? That NNPC needs a serious course correction is no brainer. The coming on board of a new leadership is the right time to do a reset. The choices made today will define Nigeria’s economic trajectory for decades
Lokpobiri Pledges Support
Minister of State for Petroleum Resources (Oil), Sen. Heineken Lokpobiri, in his reaction to the changes in the company said, “This is a crucial step toward further repositioning the NNPCL to meet the demands of the evolving global energy landscape,”
Lokpobiri stated. “With the wealth of experience and expertise that Mr. Ahmadu Musa Kida, Engr. Bashir Bayo Ojulari and the board members bring, I am confident that NNPCL will further drive significant progress in achieving our national energy objectives.”
The Minister reaffirmed the commitment of the Ministry of Petroleum Resources to continue to collaborate with NNPCL’s leadership in delivering on its mandate. He also called on industry stakeholders, investors, and partners to collaborate with the new management team in advancing Nigeria’s oil and gas sector.
“I urge all stakeholders to rally behind this new leadership as we work together to enhance production capacity, optimize value across the petroleum value chain, and secure a sustainable future for the sector,” he added.
While thanking Mr. Mele Kyari for his meritorious service to the nation, the Honourable Minister reiterated that under President Tinubu’s administration, Nigeria remains committed to fostering an enabling environment for growth, investment, and transformation in the oil and gas industry.
Key Expectations From The New Team
Industry leaders, notes that the appointment of industrial experts to key positions within NNPC signifies a shift towards commercial viability and transparency.
Strengthening the governance structure of NNPC is crucial to build public trust and prepare for a potential IPO, and the reforms at NNPC are expected to have a positive impact on the power sector in Nigeria by leveraging gas assets for improved power generation.
President Bola Tinubu, made a significant move by appointing Bayo Ojulari as the Group CEO of the Nigerian National Petroleum Company Limited and Ahmadu Musa Kida as non-executive chairman, marking a major restructuring of the oil company.
The decision has led to the removal of Pius Akinyelure and the Group Chief Executive Officer, Mele Kyari.
George Etomi, Founder of George Etomi and Partners, spoke to CNBC Africa about the leadership shake-up and its implications for the energy sector in Nigeria.
According to Etomi, the changes in the leadership of NNPC signify a positive shift towards commercial viability and transparency.
He emphasized that the appointment of industrial experts to key positions within the company, such as the chairman and managing director, is a welcomed development.
This move aligns with the objectives of the Petroleum Industries Act, aiming to transform NNPC into a more efficient and transparent entity. Etomi highlighted the importance of strengthening the governance structure of NNPC to build public trust, especially as the company considers plans for an IPO. Comparing NNPC to successful international oil companies like Saudi Aramco, Equinor, Petronas, and Qatar Energy, Etomi stressed the need for the Nigerian company to demonstrate efficiency and transparency in order to attract public confidence and drive economic growth.
He pointed out that past political interference has hindered NNPC’s potential and called for a hands-off approach from the government to allow competent professionals to lead the company effectively.
The discussion also touched on the impact of these reforms on the power sector in Nigeria. Etomi, who has been involved in policy advisory committees for both the power and oil industries, emphasized the crucial role of gas in powering thermal plants, which account for 80% of the country’s energy needs. He underscored the importance of leveraging Nigeria’s gas assets to improve power generation, which is essential for the overall development of the energy sector. In conclusion, the leadership changes at NNPC represent a significant step towards transparency and efficiency in the Nigerian energy industry. By appointing experienced professionals and focusing on governance reforms, the government aims to lay the foundation for sustainable growth and development in the sector.
The success of these reforms will not only benefit NNPC but also have positive ripple effects on the broader economy, particularly in terms of power generation.
Group Identifies Irregularities In Appointment
While the applause heightens, the Concerned experts in the petroleum industry have raisedconcerns over perceived irregularity in the recent reconstitution of the Nigerian National Petroleum Company Limited (NNPC Ltd) Board, citing non-compliance with the Petroleum Industry Act (PIA) 2021.
In a statement signed by Mr Abolade Adewale, the experts called for the reversal of the appointment of Aminu Said Ahmed, a Senior Manager from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), as the Ministry’s representative on the board.
They argued that the appointment violates Section 59(2)(d) of the PIA 2021, which stipulates that the NNPC Ltd Board shall comprise “a representative of the Ministry of Petroleum Resources (MPR), not below the rank of a Director.” The group emphasis that the Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMDPRA) is an independent regulatory agency, distinct from the Ministry, and therefore, its staff cannot represent the MPR on the board.
The experts note with great concern the recent appointment of Aminu Said Ahmed, a Grade Level 14 officer in the NMDPRA to represent the Ministry of Petroleum Resources on the NNPC Limited Board. This is inconsistent with the provisions of Section (59) sub section (2) sub (d) of PIA Act, 2021 and a grand conspiracy to usurp the Ministry at all cost.
They highlighted that the Federal Ministry of Finance (FMF) is represented on the same board by its Permanent Secretary, aligning with the PIA’s requirement for Ministerial representation. They urged His Excellency President Bola Ahmed Tinubu, GCFR, to maintain institutional parity by appointing a Permanent Secretary from the MPR to the board.
The PIA provides that a representative of the MPR and the FMF not below the rank of a Director should be appointed as a member of the board, hence, the appointment of the Permanent Secretary, FMF as a member of the board was in accordance with the PIA provisions. Whereas Aminu Said Ahmed is neither a Director nor a staff of the Ministry of Petroleum Resources.
They also addressed the issue of representation in international petroleum organizations, stating that the Ministry should lead delegations to bodies like Organization of the Petroleum Exporting Countries (OPEC) etc as mandated by Section 3(1) (d) of the PIA. They criticized the practice of assigning non-Ministry officials to such roles based on nepotism, citing concerns over institutional memory and reputational risks.
“We therefore respectfully submit that all nominations to international engagements on Petroleum-related matters should kindly be made strictly among serving officials of the MPR through formal appointment by the Minister, as permitted under the law,” added Adewale.
They called for a reaffirmation of statutory compliance and institutional mandate, urging the President to reverse the appointment of Aminu Said Ahmed and approve a high ranking officer of the Ministry of Petroleum Resources, which in this case should be the Permanent Secretary to be at a parity with the Federal Ministry of Finance Permanent Secretary as a member of the NNPC Ltd Board.
They expressed confidence that as the President of the Federal Republic of Nigeria, President Bola Ahmed Tinubu, has always listened to valid judgments, and will take corrective action to uphold the integrity of the PIA 2021.
