The new national oil company – Nigerian National Petroleum Company Limited (NNPC) will differ in many ways from the old order – the Nigerian National Petroleum Corporation (NNPC), in terms of commitment to increasing oil and gas production, prompt payment of cash call arrears, good corporate governance, transparency and accountability and ensuring cordial relationship with its various stakeholders including host communities of its operational areas, its Group Chief Executive Officer, Mallam Mele Kyari, has said.
Kyari who delivered a paper at the 60th anniversary celebration of the Oil Producers Trade Section (OPTS) entitled “The New NNPC Limited: Perspective on the way forward and growing investors’ confidence,” reeled out strategies of the management of the new NNPC.
Represented by the Group General Manager, Treasury, NNPC, Mr. Dapo Segun, Kyari, said: “The NNPC Limited is firmly focused on investing to grow production both oil and gas but more importantly gas and gas infrastructure development, creating linkages to the market and expanding midstream value adding opportunities.
“We are not unmindful of the current challenges particularly security in theoperational areas, cash call arrears settlement and other above ground issues that confront the industry, the question therefore to ask is how do we provide pathway for growth under these conditions.”
He noted that growth and reinvestment of capital is the only way forward, adding that the consequences of an alternate future can be quite dire. He, however, was consoled by the long history of NNPC’s resilience, and noted that the new NNPC with the collective will of all stakeholders, will overcome the challenges.
He said: “We have deployed creative solutions to tackle security challenges in the operational areas. Technological intervention for both monitoring and prompt intervention would also be set up. The tackling of the menace is a top priority for NNPC Limited.
“Also, our new governance framework provides us autonomy and opportunity for self-accounting hence cash call settlement including arrears would be settled and handled promptly going forward.
“We must, however, note that capital allocation will be value driven and NNPC Limited going forward will only deploy capital based on returns and value accretion. The portfolio strategy is focused on balance of volume and value; we would not however sacrifice value for volume. There would be no cross-subsidization either between JVs (and) or assets. The businesses must generate adequate cash flow for reinvestment.
“More importantly, we seek deeper partnership with OPTS to develop and deploy ingenious solutions towards sustainable financing and development of hydrocarbon resources. Let me reiterate that as an industry we must show that we care especially in dealing with our host communities. The Petroleum Industry Act (PIA) has created the Host Community Fund and governance structure, we need to all work to make it a success. We must together win the hearts and minds while securing our rights to play.
“The global market is becoming more open and dynamic, while we are uniquely positioned to seize opportunities, we count on the partnership with the industry to enable us harness and nurture value to the benefit of our customers, our shareholders and stakeholders alike.
“We are focused on better governance, clearer processes and sustainably financing our businesses, gas development and securing our freedom to operate and creating value for the long term.”
