The Nigerian president has appointed former Shell director Bayo Ojulari to lead the state-owned oil company as part of a sorting reform that is plagued by allegations of corruption, pollution and decades of inefficiency.
Mr Ojarali was selected for the “critical” overhaul of the Nigerian National Petroleum Corporation (NNPC), the president said on Wednesday.
It added that the restructuring (which also involves replacing the entire board) is necessary to drive economic growth for Africa’s largest oil exporters.
President Bola Tinubu’s administration has suffered a series of economic shocks, with food and fuel prices rising in the past few years.
NNPC is also under financial pressure – in September last year, it admitted debt of about $6 billion (£4.5 billion).
In a statement announcing the reorganization of the NNPC, the president said that Tinubu hopes to increase Nigeria’s oil production and refining capacity.
Despite the huge oil sector, most of the crude oil produced in Nigeria is still exporting, and it must import fuel from other countries because it does not have enough refineries.
Fuel costs were once subsidized by the government – until President Tinob canceled it when he took office two years ago.
He said the country can no longer pay for it and will soar fuel prices.
The subsidy was supervised by the NNPC and shrouded in mystery, leading to allegations of mass corruption.
However, oil marketers say the price of imported fuel is still higher than the price of pumps, leading many to believe that the government is still reducing fuel costs through NNPCs, which NNPC has denied.
News Agency AFP reported that Nigeria’s oil production fell to less than one million barrels per day in 2023.
Tinubu’s government hopes to hit 2 million barrels of oil a day by 2027 and 3 million barrels a day by 2030.
Mr Ojulari was responsible for the task, replacing former NNPC boss Mele Kyari.
Due to his decades of experience in the oil sector, some oil industry experts expressed confidence in his appointment, but they were concerned about the challenges of his inheritance.
Energy expert Henry Adigun told the BBC, “The commission’s debt is debt.
“Its accounting is damaged by corruption and inefficiency. I think it’s swelling. It’s the more you read, the less you understand.”
Mr. Ojulari joined Shell in Nigeria in 1991 and became Managing Director, where he held a position for six years. He left the company in 2021 to join the investment advisory organization BAT Advisory and Energy Company.
He then moved to the Renaissance African Energy Company last year.
In addition to trying to enhance oil production in Nigeria, Mr. Orujari will undoubtedly seek to improve the public bad image of the NNPC.
For many years, under the leadership of the previous government, most of the company’s profits never reached the Ministry of Finance.
NNPC has not released an account until the last five years.
The new board appointed by President Tinubu includes oil industry experts with decades of experience.
Hopefully the team will get rid of politics and restore transparency to the country’s vague oil sector.
Mr Adigun added: “If he fails, it will be due to government intervention.”
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