Experts urge NNPCL’s new boss to uphold rule of law for industry growth
Oil and gas experts have urged the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Ltd. (NNPCL), Mr Bayo Ojulari, to prioritise adherence to the rule of law and the Petroleum Industry Act (PIA) 2021, stressing that these principles are crucial for fostering transparency, accountability, and boosting investor confidence in the sector.
Ojulari, who was appointed by President Bola Tinubu on April 2, was congratulated by the experts in separate interviews with newsmen in Lagos on Monday. They also identified key areas that the new leadership must address to strengthen the oil and gas industry.
Professor Emeritus of Petroleum Economics at Louisiana State University, Prof. Wumi Iledare, underscored the critical importance of legal compliance, warning that any deviation from the PIA’s provisions could deter investment in the sector. He stated, “Adhering to the rule of law is essential for accountability. Deviating from this path will deter capital inflows into NNPCL.”
Iledare called on the company to focus on improving cost efficiency, particularly in joint venture (JV) brownfield projects, and ensuring the security of its operational assets. He also cautioned against “gold-plating” projects and urged a stronger emphasis on extracting value from the midstream and downstream sectors.
“NNPCL is now a vertically integrated commercial entity, not a government agency. Long-term value lies in leveraging downstream and midstream infrastructure,” he added.
He further warned against treating NNPCL as a source of government revenue, advising the Federal Government to refrain from imposing subsidies on the company. He also recommended compensation models that align with the distinct financial realities of each operational segment and suggested selling JV interests to local consortia rather than foreign entities.
On the topic of energy transition, Iledare pointed out that while NNPCL should focus on reducing emissions, petroleum would remain a key energy source for the foreseeable future unless a viable, sustainable alternative becomes widely accessible.
Echoing similar sentiments, oil and gas consultant Mr Henry Adigun emphasised the need for Ojulari to focus on maximising shareholder returns, reviewing asset performance, and addressing operational inefficiencies.
“NNPCL must operate strictly as an oil company and avoid conflating its regulatory responsibilities. Its failure to make this distinction has impacted its efficiency,” Adigun said.
He also noted that while NNPCL could facilitate growth within the sector, it would struggle to attract substantial investment without properly utilising its existing assets and joint ventures.
On energy transition, Adigun called for NNPCL to establish robust internal structures to drive the implementation of policy goals. He suggested that leadership reforms at NNPCL could lead to wider improvements across the industry.
“NNPCL’s reform can set a positive tone for the entire oil and gas sector,” he added.