The federal government yesterday approved the retirement of all eight Group Executive Directors (GED) of the Nigerian National Petroleum Corporation (NNPC), in a sweeping move expected to affect more senior executives of the state-run oil company over the next one week.
Their removal came exactly one day after the appointment of Dr. Emmanuel Ibe Kachikwu as the new Group Managing Director (GMD) of the corporation that has been bogged down by gross mismanagement and corruption.
The affected GEDs, whose retirement was with immediate effect, include Mr. Bernard Otti, GED Finance and Accounts; Dr. Timothy Okon, acting GED Exploration and Production, who also doubled as Coordinator Corporate Planning and Strategy of NNPC; Mr. Adebayo Ibirogba, GED Engineering and Technology; and Dr. David Ige, GED Gas and Power.
Others are Ms. Aisha Abdurrahman, GED Commercial and Investment; Dr. Dan Efebo, GED Corporate Services; Mr. Ian Udoh, GED Refining and Petrochemicals; and Dr. Attahiru Yusuf, GED Business Development.
In a statement from NNPC spokesman, Ohi Alegbe, the new GMD personally conveyed the government’s decision to retire the eight GEDs to them.
Kachikwu also expressed the government’s gratitude for their services to the corporation and wished them success in their future endeavours.
In addition to the removal of the GEDs, NNPC sources also confirmed that the number of directorates in the corporation were slashed from eight to four yesterday.
The new directorates and those who will head them are: Refining and Engineering – Dr. M.K Baru; Exploration and Production – Denis Nnamdi; Commercial and Investment – Bankole Komolafe; and Finance- Isiaka AbdulRazak.
The announcement of the four new GEDs will be made public today, NNPC sources confirmed.
Explaining the rationale for pruning the number of directorates, a top NNPC official said Kachikwu took the decision as a cost cutting measure in the face of dwindling oil revenue and is aimed at introducing efficiency in NNPC.
“It is a cost cutting measure brought on by dwindling oil revenue. Besides, the GMD wants to introduce efficiency as most of the directorates were set up around the personalities who headed them and they were duplicating one another’s functions,” he said.
He added that the sack of the eight GEDs was just the tip of the iceberg, as many more senior executives of the corporation would also be shown the exit next week.
A source said Kachikwu met with President Muhammadu Buhari yesterday morning at the Presidential Villa, during which the GMD was given marching orders to clean up NNPC with the immediate sack of its executive management team, some of its group general managers and CEOs of its subsidiaries.
Their removal, THISDAY learnt, will pave the way for the appointment of a new management team from within and outside the corporation. The new team, it was gathered, will be responsible for NNPC’s transformation into a lean, efficient, financially independent and transparent entity.
Meanwhile, there is mounting concern that Buhari’s sudden, unexpected and seemingly unilateral decision to ban 113 oil tankers from the country’s waters has sown confusion among shippers and oil traders, and could impede the country’s near-term oil revenue more than the oil thieves it seeks to stop.
The order directly from the president’s office appeared to be part of a campaign pledge to crack down on oil industry corruption and theft.
But the disarray it has caused, even three weeks on, underscores the problems Buhari faces in trying, as an oil industry outsider, to tackle problems in the sector head on, a report by Reuters said yesterday.
“It’s a mess,” one trader said of the ban. “Nobody knows anything concrete.”
Buhari has kept the oil portfolio for himself for now, as he had said that he would not appoint ministers until September. Last month, he announced plans to cleave state oil firm NNPC in two, though details are vague, and sacked the chiefs of the Nigerian Navy and the Nigerian Maritime Administration and Safety Agency (NIMASA) – agencies that would help enforce the ban.
Some warn the ban could hurt the country’s near-term oil revenue more than the thieves it aims to stop.
“In the end, it’s going to make a much bigger problem for Nigeria than tanker owners,” said Ehsan Ul-Haq, senior market consultant with KBC Energy.
Traders are still struggling to get to grips with the list of tankers, which sources said is haphazard and confusing; while the headline number is 113 vessels, at least nine are listed twice, and shipping sources said one was scrapped in 2012.
Of the others, many have not called at Nigerian ports in years, if at all.
“The whole list stinks if a lot haven’t been to Nigeria for a long time,” one Nigeria-based oil industry executive said.
An NNPC spokesman and the head of crude marketing did not respond to several requests for comment. The presidency confirmed it had sent the list to NNPC but declined to elaborate on the rationale for vessels included.
Inside and outside Nigeria the origin of the list seemed to be in a locked box inside the president’s inner circle, and NNPC itself appeared only to have limited information.
Oil traders who asked NNPC officials directly for answers said their attempts had borne little fruit.
Oil theft is rampant in Nigeria; the country has estimated losses as much as $35 million per day – roughly a quarter of its gross domestic product.
Buhari has vowed to recover the “mind-boggling” amounts of stolen oil money, enlisting help from the United States.
The theft comes at various points – siphoned from pipelines, diverted from loaded vessels and via paper accounting fraud.
Much of the stolen physical oil, country observers say, ends up on very large crude carriers (VLCCs) like those now banned.
Some said the ban could be a shot across the bow at those engaged in illegal activities or who look the other way when it happens involving their ships.
“What NNPC appears to be doing is attempting to get vessel owners to be more proactive in ensuring their vessels are used only for legal business,” one trader said, noting this is an important goal for the country.
The source added, however: “It’s a fairly blunt instrument.”
The confusion has sparked concerns that more tankers could be added to the list. As a result, some could avoid Nigerian ports altogether, while others could demand higher rates to call there.
Some traders are also pressing for lower official selling prices from NNPC to compensate for any difficulty the ban creates; if successful, this would hit Nigeria’s already battered revenue even harder.
“Nigerian (crude) grades have already been suffering … this will increase their pain,” Ul Haq said, noting the global excess of crude. “They will soon realise this is not the right way of dealing with oil theft.”