The Dynamics, Political Intrigue, And Succession Speculations Surrounding Mele Kyari’s Tenure As CEO Of NNPCL, By Prof. U. A Danbatta

Mele Kyari

1.0 INTRODUCTION

The media space has recently been flooded with discussions about potential successors to Mele Kyari, who was first appointed as the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) on July 8, 2019. His appointment, made by then-President Muhammadu Buhari, marked him as the 19th GMD of the NNPC, succeeding Maikanti Baru, who retired on July 7, 2019.

With the enactment of the Petroleum Industry Act (PIA) in August 2021, the NNPC was restructured and transformed into a limited liability company—the Nigerian National Petroleum Company Limited (NNPCL). This transformation led to Kyari retiring as GMD of the NNPC and subsequently being appointed as the Group Chief Executive Officer (GCEO) of the NNPCL on September 19, 2021, by President Buhari. He became the first GCEO under this restructured framework, and his appointment was ratified by President Ahmed Bola Tinubu. This restructuring has intensified political and economic intrigue regarding his tenure and succession.

Mele Kyari’s tenure as GCEO has placed him at the center of this political and economic intrigue. Despite public service rules suggesting that he step down upon turning 60 on January 8, 2025, there are strong indications that the federal government is exploring measures to allow Kyari to continue in office. These discussions have underscored the complex dynamics and political maneuvering surrounding his tenure and succession.

2.0 THE PETROLEUM INDUSTRY ACT (PIA) SUPPORTS KYARI’S TENURE EXTENSION

The PIA emphasizes operational independence and accountability, establishing the NNPCL as a profit-oriented entity under the Companies and Allied Matters Act (CAMA). This legal framework does not impose age or tenure limits on the GCEO, thereby supporting Kyari’s potential eligibility for a fresh five-year term.

Mele Kyari’s initial appointment as GMD of the NNPC on July 8, 2019, would have ended in July 2024. However, his transition to GCEO on September 19, 2021, resets his five-year tenure to end in September 2026, with the possibility of renewal based on performance. Industry observers highlight that Kyari’s continued leadership is crucial for ongoing reforms and initiatives aimed at enhancing the efficiency of Nigeria’s oil sector, despite public service rules suggesting he should retire upon turning 60 on January 8, 2025.

3.0 MELE KYARI’S MAJOR ACHIEVEMENTS AS THE GCEO OF NNPCL

As the GCEO of NNPCL, Mele Kyari‘s influence has significantly shaped the leadership of the NNPCL by implementing several strategies that transformed it into a commercially driven entity while ensuring sustainable energy practices. This allowed the company to achieve several key milestones too numerous to mention. The key ones include implementing Transparency, Accountability, and Performance Excellence (TAPE) initiative, financial turnaround, increased oil production and refining, energy security, Tape, enhanced governance and stakeholder engagement, and development of infrastructure projects for investment attraction that fosters growth and modernization.

i) Transparency, Accountability, and Performance Excellence (TAPE) Initiative: The TAPE agenda was launched by Mele Kyari to enhance operational efficiency in NNPC that aligns with global best practices. Under it, several specific measures have been implemented that significantly improved NNPCL and the Nigerian oil industry through several key outcomes. Under TAPE, the company focused on effective communication and stakeholder engagement.

The introduction of proactive innovative communication strategies, such as press releases and media coverage, improved information dissemination and stakeholder engagement has improved relationships with stakeholders, including the government and the general public. These measures collectively demonstrate commitment to a culture of transparency and accountability, which helped NNPCL rebrand itself, by changing the negative narratives surrounding it.

ii) Financial Turnaround and Success: Under Mele Kyari’s leadership, NNPCL recorded its first profit in 45 years in 2020, with a net profit of N3.3 trillion in 2023, up from N803 billion in losses in 2018, significantly increasing from previous years. The company has successfully settled a $2.4 billion debt with international oil companies, positioning NNPCL as a credit-worthy entity.

iii) Increased Exploration and Production: Enhanced exploration efforts, including drilling new wells and seismic data collection, an example of which is the frontier fields of Kolmani petroleum prospect. NNPCL has recently boosted oil production to 1.8 million barrels per day and enhanced domestic natural gas consumption. The improved security in the Niger-Delta and the settlement of Oil Mining License (OML) disputes with partners through a proactive crisis management is responsible for the increased crude oil production and unlocking significant gas revenues. The initiatives have established a proactive approach to security and crisis management, allowing NNPC to address potential reputational issues swiftly, further bolstering public confidence

iv) Energy Security Initiatives: Focused on local refining capacity and aimed for zero import of refined products by 2024 through a strategy of revamping and restructuring for enhance energy security in Nigeria. As part of this, NNPCL collaborated with the government to remove fuel subsidies, saving over $400 million in 2020, with the funds redirected to critical infrastructure.

In addition, NNPCL has established partnerships initiative to develop Compressed Natural Gas (CNG) CNG stations nationwide, providing a cleaner, cheaper fuel alternative following the removal of fuel subsidies. By enhancing domestic gas utilization, the project aims to reduce reliance on imported fuels and mitigate supply disruptions, thus bolstering national energy security, promoting cleaner energy alternatives, and contributing to environmental protection efforts by helping to reduce gas flaring.

v) Enhanced Governance and Stakeholder Engagement: NNPCL has promoted transparency and open communication through enhanced stakeholder engagement and regularly publishing audited financial statements. It has partnered with the Extractive Industries Transparency Initiative (EITI) to promote open management of oil and gas resources, ensuring compliance with global transparency standards. To strengthen collaboration and transparency in its operations, NNPCL has formed a joint committee with the Nigeria Extractive Industries Transparency Initiative (NEITI).

In line with government’s Financial Transparency Policy which mandates public reporting of significant financial transactions, NNPCL has also opened a Treasury Portal, aimed to foster a culture of openness and accountability within the company. This has positioned the company as a more accountable and credible entity in the eyes of Nigerians and the international community. In addition, the company has regularly published its audited financial statements and operational data, including those of its subsidiaries, enhancing financial transparency, enhancing public trust in its management practices.

vi) Development of Infrastructure Projects: Expanded domestic gas projects and secured investments to optimize the utilization of Nigeria’s gas resources. For energy self-sufficiency, NNPCL has initiated the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline project, expected to transport 2.2 billion standard cubic feet per day (bscf/d) of gas into the domestic market, supporting power generation and gas-based industries. This will offer several key benefits including economic revitalization moribund industries along its route, and boosting local businesses and creating job opportunities during construction and operation that will stimulate local economies.

NNPCL has also launched an Independent Power Plant project at Gwagwalada and gas-fired power plant project at Maiduguri, to increase electricity generation capacity and improve energy access. The plants will utilize domestically sourced gas, promoting energy security and reducing reliance on imports. They are expected to contribute significantly to Nigeria’s electricity grid that is historically plagued by power shortages, by restoring electricity to address frequent power shortages in the country to enhance energy security

The Gwagwalada Independent Power Plant (GIPP) in Abuja is a significant project by the Nigerian National Petroleum Company (NNPC), designed to enhance Nigeria’s electricity supply. The Maiduguri Emergency Power Plant (MEPP) is a significant project by the Nigerian National Petroleum Company (NNPC) aimed at restoring reliable electricity to Maiduguri, Borno State. It was developed in response to power supply challenges exacerbated by insurgent attacks on infrastructure, with the aim of providing sustainable electricity that will support economic activities in the region.

In addition, NNPCL has also initiated and constructed or rehabilitated 21 roads under the FG’s Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, to improve critical road transportation networks across Nigeria’s six geopolitical zones. This has contributed to enhanced road conditions that facilitate trade, reduce logistics costs, and boost overall economic activities in the country.

The long-term goals of the tax credit scheme include: i) enhancing critical infrastructure deficit by encouraging and enabling private sector companies to finance road construction and refurbishment projects, while receiving tax credits for their investments investment; ii) fostering a Public-Private Partnerships collaboration between the government and private entities to improve road quality and accessibility; iii) allowing participating companies to recover full project costs through tax credits against their Companies Income Tax, incentivizing investment in critical infrastructure spending; and iv) encouraging sustainability by ensuring ongoing maintenance and development of road infrastructure over the scheme’s ten-year duration.

4.0 The Intrigue surrounding allowing Mele Kyari to serve out his term

Kyari’s troubles began when the matter of fuel prices plunged in Nigeria, leading to unreasonable and unusual hikes in price and scarcity. His transparency and efforts to block sources of illicit wealth within NNPCL have made him a target, especially considering the alliances and tactics used by Kyari’s alleged various opponents who have launched a sponsored campaign against him, using the ongoing fuel price and availability issues.

The political intrigue surrounding Mele Kyari’s tenure as CEO of NNPCL is driven by several factors that favor allowing him to serve out his term and these include:

i. Legal Ambiguities: The interplay between public service rules and the Petroleum Industry Act creates uncertainty about Mele Kyari’s eligibility to remain beyond age 60. However, the restructuring of NNPC under the Petroleum Industry Act (PIA) aligns with the Companies and Allied Matters Act (CAMA), which imposes no age or tenure limits, potentially allowing Kyari to extend his leadership until 2027. Therefore, the argument of critics that Kyari should adhere to public service rules mandating retirement at age 60, will raise concerns about legality and governance. This would disregard the well-being of the NNPCL and Nigeria.

ii) Stability and Continuity in Leadership: The interplay between Kyari’s experience and ongoing projects, such as the Warri and Port-Harcourt refineries, necessitate his continued leadership for operational stability. His successful tenure and accomplishments in overseeing significant projects and reforms within NNPCL, suggest that his continued leadership could further enhance operational efficiency and accountability. This is essential for continuity and effective leadership for economic recovery and growth during a critical period for Nigeria’s oil sector, which has led to greater accountability, especially regarding pipeline security and financial management

iii) Political Support and Leadership Vacuum: The unfounded uncertainty regarding leadership transition in the NNPCL has fueled political maneuvering and alliances among various stakeholders, who are desperate to replace Mele Kyari with someone more amenable to their personal interests. This raises concerns about the several challenges he may face if he retained his job as NNPC boss ahead of retirement.

Kyari’s management effectiveness and transparency over NNPC’s operations has reportedly garnered him backing from key officials, suggesting he can effectively remain in office beyond his age of retirement to complete his term and groom potential credible successors like Bayo Ojulari and Ahmadu Musa Kida. However, it is imperative to emphasize that that any decision regarding the completion of Mele’ Kyari’s tenure or the emergence of potential successors, rests with President Bola Ahmed Tinubu. The fact that he wears the confidence of President Bola Tinubu suggests that his term is ongoing.

5.0 CONCLUSION

In conclusion, as of January 19 2025, Mele Kyari continues to serve as GCEO of the NNPCL, navigating political challenges while garnering support for his leadership. His leadership has transitioned the organization from losses to profitability, fostering sustainable energy solutions and aligning with Nigeria’s broader economic goals. While political intrigue surrounds his tenure, the legal and structural reforms under the PIA and CAMA, support his right to serve until September 2026. His extensive experience and achievements further positioned him favorably for potential renewal based on performance. Kyari’s legacy as a reformer and visionary leader underscores the importance of stability and continuity in Nigeria’s oil sector, ensuring its sustainability and economic growth.

Prof. U. A. Danbatta is the current Director of the NNPCL funded

Centre of Inland Basins Studies(CIBS), Phase II Site,

Ahmadu Bello University Zaria, Nigeria.

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