Highlighting Kyari’s Positive Impact In the Oil Sector.
After several years of trial, the National Assembly last week passed the long-awaited Petroleum Industry Bill, breaking the invincibility that has kept the piece of legislation on the drawing board on successive sessions of the federal lawmakers.
The feat that has been lauded by all was made possible by no other person than the current group managing director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari whose tenure which comes to the second year today, has brought peace and several achievements that have come to change the face of the country’s oil and gas sector.
Kyari, is a prominent member of the sub-committee of the Corporation that works with the Oil and Gas Industry Committee (OGIC) and responsible for the crafting of the original draft of the PIB, carrying the PIB on his shoulder from the very beginning. He worked closely with the Minister of State for Petroleum Resources, Timipre Sylva, to provide Executive insight to the legislators all the while the Bill was undergoing legislative action. So, the passage of the Bill, coming barely a week to his second year anniversary as GMD of NNPC, is another proof of the efficacy of his impactful and conciliatory leadership in the oil gas sector.
Since he was thrust the rein two years ago, Kyari approach has been the Midas touch that set the sector on a peaceful path, resolving many lingering thorny issues including the PIB.
Kyari’s approach was first felt when barely four months in office in October 2019, he resolved the crisis between Shell and the Belema Community and Belema Oil Ltd in Rivers State over OML 25 for which production had hitherto been shut-in for over three years. The result was the resumption of about 30,000 barrels per day, adding to the vision to boost the nation’s oil production to 3million barrels per day.
In late 2019, Kyari also led the Corporation to execute the Abo OML 125 Heads of Terms leading to the resolution of the issues around most of the deep offshore Production Sharing Contracts. This paved the way for the renewal of OML 125 and further investment in the exploration of the lucrative field to boost the nation’s crude oil production.
In May 2021 again, Kyari repeated the feat rallying the Corporation to sign a series of agreements with SNEPCo and other PSC partners to resolve the disputes around another deep offshore block, OML 118, leading to the renewal of that acreage with the prospect of a new $10billion investment in the development of the Bonga South-East Field. This will further boost the nation’s oil production.
It is worth noting that the OML 118 dispute lasted over 12 years before Kyari stepped in.
In just two years, Kyari’s conciliatory leadership knife has cut through seemingly irreconcilable and protracted disputes in the petroleum industry. This is a telling pointer to the lofty heights he is set to take the industry in the next few years when the PIB would have been signed into law.
Kyari’s leadership at the NNPC has also had a salutary effect on the gas sector giving new vim to the gas commercialization programme and driving Nigeria to take its rightful place as a gas nation.
A major step in this regard was the dexterous handling of the Nigeria Liquefied Natural Gas Train 7 Project. Kyari led NNPC to rally the partner in the project that was on the drawing board for over 10 years, to take the Final Investment Decision (FID) on the NLNG Train 7 Project in December 2019. With the project on now, Nigeria is expectant of over $20billion of revenue over the project’s lifecycle, creating 10,000 direct and 40,000 indirect jobs.
He followed that feat up in May 2020, at the heat of the Covid-19 pandemic, with the signing of the Engineering, Procurement and Construction (EPC) contract of the NLNG Train-7 project. The contract was signed with the SCD JV Consortium comprising affiliates of Saipem, Chiyoda and Daewoo.
The execution of the EPC contract signalled the effective commencement of the detailed design and construction phase of the multi-billion dollar project which, on completion, is expected to raise the NLNG production capacity by 35 per cent from the current 22 million tonnes per annum (MTPA) to 30 MTPA.
On 15th June 2021, the ground-breaking ceremony of the NLNG Train 7 Project was conducted signalling the commencement of construction work on the project.
He also led NNPC to flag off the construction of the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project on 30th June, 2020. The project which has been described by the President as a game-changer is an integral part of the Trans-Nigeria Gas Pipeline (TNGP) with a capacity to transport about 2.2billion cubic feet of gas per day.
The infrastructure designed to feed gas into the AKK – the Escravos Lagos Pipeline System II (ELPS II) and Oben-Obiafu-Obrikom (OB3) gas pipeline are also being aggressively executed and expanded to increase delivery capacity from 1.5BCF/D to over 3.5BCF/D. The ELPS II has reached 96.34 per cent completion.
Kyari will also be remembered for leading the Corporation to achieve a $300million reduction in the cost of the AKK Gas Pipeline contract via contract renegotiation from the initial $2.8billion.
An additional major stride in the gas sector was witnessed at the twilight of 2020 with the commissioning of the Oredo Integrated Gas Handling Facility (IGHF) and the Liquefied Petroleum Gas Storage and Dispensing Unit. The facilities are wholly owned and constructed by the Nigerian Petroleum Development Company (NPDC) to address domestic gas supply challenges. The facilities currently deliver over 200 million standard cubic feet of dry gas per day and 330 metric tonnes of Liquefied Petroleum Gas (cooking gas) which is equivalent of 16 units of 20tonnes LPG trucks per day into the domestic market.
In order to provide an alternative to Premium Motor Spirit (petrol) as the sole automotive fuel and reduce the huge importation bill of the product, the GMD led NNPC to key into the Year /Decade of Gas initiative spearheaded by the Honorable Minister of State for Petroleum Resources to launch the Autogas initiative. It executed a JV agreement with NIPCO to help in the marketing and distribution of the product to get as many Nigerians as possible to migrate to the use of gas as automotive fuel.
Kyari heralded 2021 with a significant step in the direction of bringing the proposed Brass Gas Hub into reality. He led NNPC to take the Final Investment Decision (FID) with the Brass Fertilizer and Petrochemical Company for the $3.6bn Brass Methanol Plant in Odioma, Bayelsa State.
He followed that feat up a few weeks later with the signing of a $260m financing agreement for the Assa-North Ohaji South (ANOH) Gas Project with Seplat. The project will deliver 300 million standard cubic feet of gas per day and 1,200 megawatts of electricity to the domestic market.
On 22 April, 2021, NNPC executed a Gas Development Agreement (GDA) for the Oil Mining Lease (OML) 143 with its partner, Sterling Oil Exploration and Production Company (SEEPCO). The project will boost the nation’s gas production by 1.2trillion cubic feet (tcf).
Indeed, Kyari’s two years of pulling the rein have been impactful, fueling the hope of Nigeria becoming a truly gas-driven modern economy by the time he is ending his tenure.
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