PREVIEW
New appointments consolidate Big Oil’s influence over Abuja’s energy strategy as search for revenue intensifies
Appointing Bashir Ojulari as Group Managing Director, who with his new team formally took over the management of the state-owned Nigerian National Petroleum Corporation (NNPC) on 5 April, fits with President Bola Ahmed Tinubu’s goals of restoring Nigeria’s oil production to 2 million barrels a day (b/d) by 2027 and to 3m b/d by 2030 (AC Vol 65 No 25, Tinubu prepares to present 2025 budget).
With tax revenues failing to meet budget projections for 2025, the government is urging oil companies to open the taps. That will require Ojulari to make progress – in coordination with National Security Advisor Nuhu Ribadu – to improve conditions in the Niger Delta and reduce levels of oil theft that have reached over 300,000 b/d. The changes at the NNPC come amid a political crisis in the oil-producing Niger Delta with the suspension of the governor of Rivers State (AC Vol 66 No 7, Tinubu bets the farm on Rivers State).
The new non-executive NNPC chairman is Ahmadu Musa Kida, a former executive of TotalEnergies. Kida was earlier bidding for the Managing Director post at NNPC, helped by the lobbying efforts of his business partner, the Franco-Lebanese billionaire Gilbert Chagoury, the financial advisor to military ruler General Sani Abacha and now to President Bola Ahmed Tinubu (AC Vol 65 No 8, Abacha consigliere in storm over $11 billion superhighway linking Lagos and Calabar).
Before his latest elevation, Kida held a majority stake in and was chairman of the Nigerian subsidiary of Chagoury’s French-based oil services company Ponticelli. Kida’s appointment as NNPC Chairman will make Chagoury, and by extension France’s TotalEnergies hugely influential on NNPC policy and award of contracts. Shell as the biggest producer in Nigeria has retained some of its power over policy and appointments but its investment plans are less ambitious than those of TotalEnergies.
New MD Ojulari worked for Shell for 24 years during which he became managing director of its deepwater exploration and production unit. Then he moved across to become chief operating officer at Renaissance Africa Energy, the private sector consortium that bought several of Shell’s onshore blocks for US$2.4 billion in the Niger Delta. Following the much-delayed approval for its operations last month, Renaissance is expected to quickly ramp up production, contributing to the national goal of boosting crude exports. (AC Vol 66 No 1, President Tinubu’s oil optimism doesn’t add up, yet).
Leading the NNPC, Ojulari is also expected to raise gas production – to targets of 8bn cubic feet by 2027 and 10bn cu ft by 2030. His most challenging target will be ramping up investment levels to the $30bn level set by Tinubu for 2027 and $60bn for 2030.
Compared with more favoured African producers – such as Senegal, Tanzania, Namibia and Mozambique – Nigeria has missed out on the latest wave of big gas investments in Africa. Companies say they are unwilling to navigate the legions of middlemen, all claiming strong connexions to the presidency, with demands commissions and contractual concessions. Fighting that culture will be a key aim in Ojulari’s reorganisation. He has appointed an eight-member senior management team, one of whose priorities is to establish a public-private-partnership framework to attract more investment.
His first big test will be to organise the Initial Public Offering for the NNPC, said to be in its final stages of preparation. This could boost the company’s accountability – with private shareholders demanding accurate and regular audited statements – and commercialising its operations as stipulated in the Petroleum Industry Act reforms.
Shortly after sacking the former NNPC Managing Director Mele Kyari and his board of directors, President Tinubu departed for Paris for a two-week ‘working visit’. Insiders say Tinubu will be meeting with his financial advisor Gilbert Chagoury, whose Hitech Construction and ITB Nigeria built headquarters and office complexes for TotalEnergies in Port Harcourt as well as winning multiple civil engineering, dredging and oil service contracts. While in Paris, Tinubu is also likely to meet senior officials at TotalEnergies, including Chief Executive Patrick Pouyanné.
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