Between Mele Kyari and Dangote Refinery



Callistus Uzoma

It is remarkable Nigerian National Petroleum Corporation ( NNPC) is undergoing profound transformation at a time of perceived corporate despondency with national economic implications. Most significant of the positive indicators is the elevation to its top job of Mele Kolo Kyari, arguably the first thoroughbred professional of the extractive industry to occupy this critical position. Indeed, a retrospective analysis of his predecessors confirms this, showing a preference for politically-connected professionals instead.

The strategic advantages of appointing pure-bred professionals to head government institutions and companies in their areas of competence need no edification especially in the face of the disappointing outcomes of undue prominence of politically-correct credentials in considerations for such appointments. The appointment of Mele Kolo Kyari as the 19th Group Managing Director (GMD) of the Nigerian National Petroleum Corporation ( NNPC) is one of the departures from this trend that upholds the functional efficiency of round pegs in round holes. The circumstances surrounding the recent acquisition of 20 per cent stake in the upcoming Dangote Refinery NNPC provide ample insights that underscore this fact.

For sure, his name did not ring any bells outside NNPC when he was named GMD, a pointer to his political obscurity even though he had risen to the top hierarchy of the corporation where obscurity is usually overshadowed by “high society” profiling. This laid back uniqueness was as much a result of Mele Kyari’s quiet and humble nature as it was due to occupational isolation associated with his profession. His CV reveals that he started his career with the Department of Geological Survey of Nigeria as Field Geologist and later he joined NNPC as Processing Geophysicist with Integrated Data Services Limited and was exploration geophysicist with the National Petroleum Investment Management Services (NAPIMS).

Kyari headed the Production Sharing Contracts Management in Crude Oil Marketing Division (COMD) and became the General Manager, Crude Oil Stock Management before heading the Production Sharing Contracts Management in Crude Oil Marketing Division (COMD). Before his elevation, he was General Manager, Crude Oil Stock Management and the Nigerian National Representative at the Organization of Petroleum Exporting Countries (OPEC) since 2018. Obviously, there was little or no time for high profiles and paparazzi !  This briefly captures the professional and work experience that defines the uniqueness and proficiency he deploys to the NNPC what amounts to a timely transformation propelled foresight dedicated to the changing dynamics of the international oil and gas sector.

The NNPC ‘s acquisition of 20% stake worth $2.76billion in the Dangote  $19 billion Refinery at Ibeju Lekki scheduled to produce 650, 000 barrels of crude petroleum daily, making it the largest refinery in the world , was greeted with the usual cynicism and insinuations among citizens, hitherto disillusioned by the NNPC’s past shortcomings such as the incessant fuel supply shortages, fuel subsidy scam and perpetually malfunctioning refineries. People gossiped about “deal” and “scandal” out of disbelief that national interest could be enhanced by a huge investment of public funds in the private project of Africa’s richest businessman, Aliko Dangote who is surely self-sufficient.

The rapid propagation of such sordid interpretation of NNPC’s share in Dangote’s world leading project was fuelled by the resurgence of another round of refinery repairs in the news until even the national assembly could not resist the “pressure” to summon the NNPC management to clear the air, suggesting legislators were as uninformed as the man on the street on the issue. However, there were more reassuring responses from the better informed oil sector stakeholders relying on the NNPC GMD’s observed track record in striving to achieve significant nationalistic objectives he identified as priorities soon after his appointment in 2019.

Among such progressive objectives that he was seen to pursue with vigour are increasing crude oil reserves to about 40 billion barrels. Exploration work commenced with the drilling of the Kolmani River II Well resulting in confirmation of commercial quantity in the Upper Benue Trough while exploratory work continues on Kolmani River III Well, Bida and Sokoto Basins. Mele Kyari also expressed determination to boost the nation’s oil production to 3 million barrels per day which is also being realized through resolving existing disputes that halted production in some oil blocks such as the dispute involving Shell and Belema Oil over OML 25, restoring over 30,000 barrels per day production, among others.

When he appeared before the House of Representatives Committee on at the interactive session on the Medium Term Expenditure Framework (MTEF), Mele Kyari defused the pervading distrust of NNPC’s 20% stake in Dangote refinery by disclosing that Aliko Dangote was actually against the 20 per cent equity and initiative was at the instance of the NNPC, categorically stating “I believe up to this moment, Mr Dangote does not want us to take equity in this plant”.

 He explained that by the terms of the NNPC equity participation in Dangote Refinery, it must buy at least 300,000 crude from NNPC which amounts to a guaranteed market, as  every country is now struggling to secure market for their crude oil. “This refinery does not owe us any responsibility if we don’t have this arrangement. This refinery is a very complex refinery complex in our industry because it can crack any crude. So, it can buy any cheap crude from anywhere and bring it into this country and leave you to your crude”, the GMD remarked.

Other aspects of the investment in the national interest highlighted by the GMD include not using any government money but borrowing money from the AfriExim consortium to pay for initial payment and also tying subsequent payment to buying from our production, giving Nigeria a right to 20 per cent of the production from this and the fact that no resource-dependent country like ours with a national oil company that imports 100 per cent of its refined products will have an entirely  private venture that will produce close to 50 million litres of petroleum products  with its very clear energy security implications.

By the time Mele Kyari concluded his submission, there was a new realization of the salient national interest considerations that informed the decision to take a 20% equity in Dangote Refinery, particularly the uncommon principled courage to secure the consent of Aliko Dangote, whose patriotic instincts clearly and commendably override his capitalist concerns. Imagine the tempting possibilities accruable from looking the other way while Dangote reaps the dividends of his legitimate investment !

Given the uniqueness of his career trajectory, his professional detachment from the extra-curricular entanglements and exemplary personal character traits aspects of which came to the fore on his assumption of an enviable exalted position of responsibility and privilege as NNPC GMD, the profound transformation and realignment of policy thrust towards national interest and international best practices under his watch represent his reciprocal “equity investment” to NNPC and Nigeria, comparable to Aliko Dangote’s mega stake in the nation’s economic development.  

CALLISTUS UZOMA is an economics analyst in Port Harcourt