Nigeria's President Bola Tinubu has appointed Bayo Ojulari as the Group CEO of the Nigerian National Petroleum Company Limited and Ahmadu Musa Kida as non-executive chairman in a sweeping reconstitution of the oil company. The move has seen the removal of Pius Akinyelure and the Group Chief Executive Officer, Mele Kyari. George Etomi, Founder, George Etomi and Partners joins CNBC Africa for more on these and discuss other developments across the power value chain.
Thank you so much for your time, sir, and I'll see you in the next segment of our show. I'd first like to get your take on the leadership shake-up we're seeing here in the NNPCL and what that means going forward. Good afternoon, Ken. In my opinion, I think this is a very welcome development. This was what was anticipated when the Petroleum Industries Act was passed. It was meant to signal the entry of the NNPC into a commercially viable entity, similar to what you find with other companies abroad. But we've always had this overbearing influence on government in the appointments to key positions like the boards and management positions. Usually to perhaps pay off some political debts. But for the first time, we're seeing a move that has introduced experts, industrial experts, into the top echelon of the NNPCL. From the chairman to the managing director to some members in the non-executive board. The signs are good. The signs are very good. What just needs to be seen is what the margin orders will be. The margin orders, as the government has articulated, it is simply to just go out there and realize the full potential of the NNPCL. And to do this, they need to strengthen their governance structure to ensure transparency, because that's been the biggest issue with the NNPCL. It's been run over several decades as one of the most opaque industries, and yet it controls the lifeblood of the economy of this country. So through, perhaps, transparency through a regular audit of its accounts, it will ensure that it builds public trust. It is somewhat fortuitous that this move is coming around the same time as we hear that there are plans for them to do an IPO. And the only way an IPO will succeed if there is public confidence in not just the process that leads to the issuance of the IPO, but in the ability of those that would receive these funds to utilize it in the best possible way. And in other clients that we've seen, to benchmark where the NNPC should be, we should look at the Saudi Aramco. And that has just been a catalyst for the development of that country. Look at what Equinor is doing for Norway. They've, through stringent and ruthless efficiency, ensured that it built a trillion-dollar sovereign wealth fund. Look at Petronas, Petrobras, Sonatra, which is Algeria. Algeria is Africa. But they've ensured that they've also imbibed those attributes that would build public trust and public confidence in what they've done. So, and look at Qatar Energy. Qatar Energy is talking about the gas value chain and what they've done, how they've brought strength to their country. In the case of the NNPC, we have always known that these potentials stay. But what have they done with it over the years? Each time you find management that tries to do something, you get political interference. And then that brings me to the issue of, it's one thing to appoint competent people to office. The other thing would be, will the government resist the temptation to interfere with them? So there needs to be self-imposed discipline on the part of government to allow these gurus to go out there and just let the NNPC become what it can be. The catalyst, the engine for growth of this economy. We've had several conversations about power, and how power holds the key to the diversification of this economy. Yes, I was going to come to that, Mr. Itomi, because like you rightly said, it's good to see this bold and sweeping reforms play out here from the government. Yes, we've seen first from the petro-sulfate removal, and now we're seeing this play out here with the NNPC, with the government trying to enshrine more transparency and corporate governance within the institution as it looks to get into an IPO. But we're looking at the wider ramifications here, and how this impacts the power sector, which you are a key player in Nigeria. And I'd like you to speak to that in terms of the changes you would like to see play out going forward that would benefit the power sector. I was in the Presidential Policy Advisory Committee, and I was in the power sub-sector. Also Nnavuru, who is now on the board of NNPC, was in the oil and gas sub-sector. And I think we all had a convergence of opinion that if we do not free up our gas assets to fuel our power, then we will be missing the point. The issue at that time that was being touted was that there was no gas available for power in Nigeria, that most of the gas had been contracted out, no new gas. It would take about 30 years. We had all manner of things about why that would not be possible. But I didn't buy that. I don't believe Austin Nnavuru bought it, because I asked him directly, don't we have gas for power? And he says, of course we have gas for power. So in terms of how it relates to the power sector, let's not forget that gas, which is a feedstock for our thermal plants, thermal plants constitute 80% of our energy needs. So if we get the power equation fairly right, then we will be well on the way to solving the issue of power generation. And then we can look at the other members of the market, like transmission and distribution. But it's key to ensure that we free up this humongous asset that we have and make it available to our economy. No doubt the developments we're seeing will impact the gas sector as well. But thank you so much for your time, Mr. Etombe. We always appreciate your presence on the show. But we're fast spent with time now. Jordi Etombe, the founder of Jordi Etombe and partners.
Theme: Leadership shake-up at NNPC signaling transparency and growth in Nigeria's energy sector.
Nigeria's President Bola Tinubu has made a significant move by appointing Bayo Ojulari as the Group CEO of the Nigerian National Petroleum Company Limited and Ahmadu Musa Kida as non-executive chairman, marking a major restructuring of the oil company. The decision has led to the removal of Pius Akinyelure and the Group Chief Executive Officer, Mele Kyari. George Etomi, Founder of George Etomi and Partners, spoke to CNBC Africa about the leadership shake-up and its implications for the energy sector in Nigeria. According to Etomi, the changes in the leadership of NNPC signify a positive shift towards commercial viability and transparency. He emphasized that the appointment of industrial experts to key positions within the company, such as the chairman and managing director, is a welcomed development. This move aligns with the objectives of the Petroleum Industries Act, aiming to transform NNPC into a more efficient and transparent entity. Etomi highlighted the importance of strengthening the governance structure of NNPC to build public trust, especially as the company considers plans for an IPO. Comparing NNPC to successful international oil companies like Saudi Aramco, Equinor, Petronas, and Qatar Energy, Etomi stressed the need for the Nigerian company to demonstrate efficiency and transparency in order to attract public confidence and drive economic growth. He pointed out that past political interference has hindered NNPC's potential and called for a hands-off approach from the government to allow competent professionals to lead the company effectively. The discussion also touched on the impact of these reforms on the power sector in Nigeria. Etomi, who has been involved in policy advisory committees for both the power and oil industries, emphasized the crucial role of gas in powering thermal plants, which account for 80% of the country's energy needs. He underscored the importance of leveraging Nigeria's gas assets to improve power generation, which is essential for the overall development of the energy sector. In conclusion, the leadership changes at NNPC represent a significant step towards transparency and efficiency in the Nigerian energy industry. By appointing experienced professionals and focusing on governance reforms, the government aims to lay the foundation for sustainable growth and development in the sector. The success of these reforms will not only benefit NNPC but also have positive ripple effects on the broader economy, particularly in terms of power generation.
"The signs are good. The signs are very good. What just needs to be seen is what the margin orders will be."
['Nigeria', 'energy reforms', 'NNPC', 'leadership shake-up', 'transparency', 'governance structure', 'power sector', 'gas assets']