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February 21, 2019
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Barkindo Sets NNPC Transformation in Full Gear
One year into the appointment of Dr. Mohammed Sanusi Barkindo as Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, there are indications that the once sleeping oil behemoth is on the threshold of being transformed into a world class profit-driven National Oil Company.

Facts have emerged indicating that ahead of the passage of the Petroleum Industry Bill, PIB, which ultimately seeks to reform the oil and gas sector and transform the Corporation from just another government department to a business concern with well defined growth paths, the corporation has embarked on an extensive self refining exercise under the watch of Dr. Barkindo.

Providing a comprehensive scorecard of the Corporation in the last one year, the NNPC GMD informed that over N20b was recorded as savings in projected annual recurrent budget and one- off savings. To achieve this, the NNPC introduced a medley of cost-efficient strategies across the departments and strategic business units of the Group.

``For instance, part of the money was saved from the Exploration and Production Directorate through the renegotiation of contracts with suppliers and the elimination of unnecessary committee meetings that incur huge travel costs,’’ Barkindo stated.

Also in the Directorates of Corporate Services (CS) and Refining and Petrochemicals (R & P) the cost-saving measures introduced include the renegotiation of contracts with suppliers and the reduction of chemical consumption through a cutback in steam losses and overheads respectively.

At the Pipelines and Products Marketing Company, PPMC huge amounts were also saved through the cut in demurrage costs and interest on late payments.

The Finance and Accounts Directorate also benefitted from the cost-saving measures through the imposition of a budget cap to limit spending, while the Nigerian Gas Company, a subsidiary of the NNPC, had its revenue boosted through the collection of debts from the Power Holding Company of Nigeria, PHCN, and other commercial debtors.

Upon his his appointment as the GMD of the NNPC by President Umaru Yar’Adua on January 12, 2009, Dr. Barkindo, an erstwhile acting Secretary General of the Organisation of the Petroleum Exporting Countries, OPEC, brought his more than two decades career experience at the NNPC to advantage when he embarked on a painstaking tour and appraisal of the situation on ground. Moving swiftly the new helmsman authorised the hiring of consultants to assist with defining the scope of change required and to bring international benchmark and best practices to his transformation mandate.

``One of the key actions taken after reviewing with the consultants was the setting up of the Transformation Office to coordinate and monitor progress being made in the transformation journey. This has yielded some positive results as can be seen from the over N20 billion savings which is a humble step in the process of transforming the corporation from a cost centre into a profit centre”, Dr Barkindo said.

With his gaze at the future, Dr. Barkindo and his team have indentified key growth path which the Corporation must tread. The areas include growth in oil reserves and managed expansion in production capacity; repositioning gas for rapid domestic, regional and export penetration; revitalising downstream capacity to support domestic energy needs and reforming key institutions to anchor sustained growth in the industry.

The consultants have since gone to work with the setting up of the Transformation Office to coordinate and monitor progress in this regard.

Apart from his transformation drive, Barkindo a veteran advocate of Climate Change Initiative has helped NNPC in capturing the benefits of Carbon Credits that would accrue from gas utilisation efforts. His exposure to high level international oil and gas best practices have seen him play a pivotal role in the move to activate the passage of the PIB.

In the downstream sector the GMD has been working round the clock to provide lasting solution to the perennial challenge of artificial fuel scarcity wrought by plethora of extraneous factors like Tanker Drivers strike, pipeline vandalism, and refusal of credit facility to marketers by banks among others.

To resolve this impasse the NNPC is set for the commencement of a two- day high level meeting of all the key operators in the downstream sector of the oil and gas industry in Nigeria. Already critical stakeholders in the downstream sector have signalled their intention to participate fully in the forum designed to find a comprehensive and lasting solution to the fuel supply and distribution challenge noticeable within the last few months.

The Forum which is billed for the Southern Sun Hotel Ikoyi, Lagos is expected to have in attendance such stakeholders as the Pipeline and Products Marketing Company (PPMC, a subsidiary of the NNPC), the Department of Petroleum Resources (DPR), the Petroleum Products Pricing and Regulatory Agency (PPPRA), Major Oil Marketers Association of Nigeria (MOMAN), the Independent Petroleum Marketers Association of Nigeria, (IPMAN), Depot and Petroleum Products Marketers Association, (DAPMA), Nigerian Navy, Nigeria Police, Nigerian Army, and other security agencies as well as the Central Bank of Nigeria (CBN) and other operators in the banking sector. The forum comes to a climax on Thursday with a communiqué by the NNPC and all stakeholders followed by a Press Conference to be addressed by the Honourable Minister of Petroleum Resources, Dr. Rilwanu Lukman.
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