The newly appointed Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr Ibe Kachikwu, has wasted no time in getting on with the clean up and restructuring of NNPC. Barely days into the job, the new GMD was hiring and firing in his multi-faceted approach to restructuring Nigeria’s national oil company, something that has been welcomed by the oil and gas industry. He intends to take the three facets to his restructuring agenda in turn.

1. The People Phase in Restructuring NNPC

The first stage is what he calls the “People Aspect.” The GMD’s approach is to purge the top echelon of the Corporation, which has been described as a cesspit of corruption by critics. There is no suggestion that all of those removed were involved in wrong doing but his view is that to get a clean start at NNPC you have to get new people in who know from the start that it is no longer business as usual.

Deciding in this part of the restructuring to let the axe fall where it may, Kachikwu has sacked all the former GEDs of the Corporation. The sacked GEDs of 8 directorates are:

• Mr. Bernard Otti, GED Finance and Accounts;
• Dr. Timothy Okon, Acting GED Exploration and Production who also doubled as Coordinator Corporate Planning & Strategy;
• Engr. Adebayo Ibirogba, Engineering and Technology;
• Dr. David Ige, Gas and Power;
• Ms. Aisha Abdurrahman, Commercial and Investment;
• Dr. Dan Efebo, Corporate Services;
• Engr. Ian Udoh, Refining & Petrochemicals;
• Dr. Attahiru Yusuf, Business Development.

As part of his restructuring agenda, Kachikwu has reduced the 8 Directorates to 4. Finance has been merged with Services, Refining with Techonology whilst Business Development as well as Gas and Power have been done away with altogether.

The new GEDs of NNPC are:

• Dr. Maikanti Baru, Exploration & Production;
• Mr. Isiaka Abdulrazaq, Finance & Services;
• Engr. Dennis Nnamdi Ajulu, Refining & Technology;
• Dr. Babatunde Victor Adeniran, Commercial & Investment.

Other appointees in the culling exercise which the Group General Manager, Group Public Affairs, said in a statement, was intended turn the Corporation into a lean, efficient, business-focused, transparent and accountable national oil company, include the following appointees to head the NNPC subsidiaries:

• Mrs. Esther Nnamdi-Ogbue, Managing Director, Pipelines and Products Marketing Company (PPMC);
• Engr. Chinedu Ezeribe, Managing Director, Warri Refining & Petrochemicals Company (WRPC);
• Mr. Babatunde Bakare, Managing Director, Nigerian Gas Company (NGC);
• Mr. Inuwa Ibrahim Waya, Managing Director, Hyson;
• Mr. Abubakar Mai-Bornu, Managing Director, Nigerian Petroleum Development Company (NPDC);
• Mr. Ladipo Fagbola, Managing Director, NNPC Retail;
• Mr. Rowland Ewubare, Managing Director, Integrated Data Services Ltd (IDSL);
• Mr. Modupe Bammeke, Managing Director, NNPC Properties;
• Mr. Abdulkadir Saidu, Managing Director, Duke Oil;
• Mr. Dafe Sejebor, Group General Manager, Nigerian Petroleum Investment Management Services (NAPIMS).

Mr Chidi Momah has been appointed as Group General Manager, Company Secretary & Legal Adviser, a crucial appointment given the GMD’s plans to look extensively at NNPC contracts, particularly those with traders and also its joint venture partners.

In total, Kachikwu has axed 38 top management staff and reduced numbers from 122 to 83 “to jump-start a new business outlook to enhance the operational environment as a profit-driven business as against the current civil service orientation.”

Among the top managers relieved of their duties were: General Manager (GM) Commercial, GM NNPC Retail, GM Sales and Marketing NNPC Retail, GM Operations NNPC.

2. The Process Phase in the Restructuring of NNPC

Kachikwu is being clinically methodical in his approach to restructuring the Corporation, which has been racked with corruption and scandal over the years. In the next stage of his battle to reform the Corporation will be about processes. In that phase, he intends to get a forensic audit done. He said: “We are going to put processes and controls in place. We are going to do retraining and repositioning and then, we are going to re-engage our majors and minors, all those who are active in the sector, for us to work as a team to take Nigeria forward.” Then the man, who has been chosen to wield the axe in the President’s laudable ambitions for the State corporation, says, he will be able to say to the nation: “This is the state of the company.”

3. The Business Phase in Restructuring NNPC

Kachikwu’s plans in his three-phase project are to culminate in a thorough review of the existing contracts. He intends to use this stage to look at all the existing contracts, which makes the Corporation’s legal adviser, a key appointee in the process. He said: “The final stage will be the business stage, which will be looking at all the existing contracts. Are they good? Are they okay? Do they need to be re-kitted and redone?”

In a move, which many Production Sharing Contract holders will welcome, Kachikwu says he will look at the PSCs. He wants to look at restructuring the contracts to deal with the challenges posed by reduced balance sheets as a result of $40 or $50 per barrel oil. In particular, holders of PSCs are looking to him to reduce the onerous performance bond requirement, which is preventing many awardees from moving forward with the development of their assets. He wants to energise recovery and income growth to increase revenue for the government. Industry watchers are also expecting him to take the scissors to the highly criticized and opaque “Strategic Alliance Agreements” with its subsidiary, NPDC.

Much is expected of Kachikwu

Buhari’s hatchet man is not sleeping very much. He knows the burden he is carrying on his shoulder. He says: “It is very intensive work; very calibrated work. It is a new process of oil administration in the country and obviously, giving fillip to Mr. President’s dream of taking the oil industry back to where it should be.”

Buhari is expected to delay the appointment of a Minister of Petroleum Resources for at least 18 months, in order to give Kachikwu free reign in his restructuring process. That means that Kachikwu will report directly to the President until a new Minister is appointed. Even then, the President’s plans to split NNPC into two, with one regulatory arm and another commercial arm may mean that the Kachikwu, depending on which arm he stays with, may not even have to report to the Minister of Petroleum Resources when appointed.

The long-awaited restructuring of NNPC has finally begun in earnest. As the industry looks on, it certainly appears that in Kachikwu, Nigeria’s new President, has found someone equal to the task of cleaning up Nigeria’s scandal ridden state oil corporation.