MMS PLUS NG – Maritime, Aviation, Business, Oil and Gas News Online Newspaper with coverage in Maritime, Oil and Gas, Aviation, Power and Energy as well as Financial News
A few hours after presidential spokesperson, Femi Adesina announced the appointment of Dr. Emmanuel Ibe Kachikwu as Group Managing Director of the Nigerian Nation Petroleum Corporation (NNPC) social media went on over-drive.
There were tweets aplenty on twitter while posts, notes and tags were the order of the day on facebook. Comments ranged from the simple to the ludicrous, the factual to the downright contrived.
Most of those were positive, with many pointing to the incumbent’s educational qualifications and professional pedigree and agreeing that the president had made a great choice. A few tried to bring in the ethnic angle since Ibe Kachikwu’s appointment is clearly the most high profile appointment of an Igbo man even if a so-called Delta Igbo.
This being Nigeria, the ethnic card always gets pulled out of the pack but beyond that distinction has emerged a clear narrative, one that fosters the perception that Buhari has got it right this time with the appointment of Dr. Ibe Kachikwu as GMD of NNPC.
His appointment is coming at a time of great scrutiny for NNPC which the Senate President, Bukola Saraki has described as “the Engine room of corruption.” That scathing appraisal came just a few weeks after Mallam El Rufai, Governor of Kaduna state gave his own assessment at the well-attended 7th Wole Soyinka Centre Media Lecture Series where he declared – “If you don’t kill the NNPC, it will kill Nigeria,”
Taking these evaluations into account it is clear that Dr. Kachikwu has his job cut out for him. He has to bring to bear his change management experience in order to fully reposition the NNPC for a new era and he is lucky on two counts.
He is working with a president who has a good handle on the petroleum industry having served as petroleum minister before and head of the PTF albeit decades ago. Secondly, Ibe Kachikwu has had a long and rewarding career in oil gas beginning from Texaco and culminating at Exxon Mobil where as Vice Chairman and Legal Counsel, he was clearly one of the most influential African at the global conglomerate.
But is that enough to change the fortunes of the NNPC and make it as efficient and competitive and respected as its peers – Petronas of Malaysia, Petrobras of Brazil, Aramco of Saudi Arabia, and Statoil of Norway? Can this man save NNPC and reposition in this season of change?
I think he can and this is where a full disclosure is necessary. Dr. Ibe Kachikwu was my boss for about nine years. He offered me my first job while I was an undergraduate at the University of Jos and I ended up as editor of Hints magazine at 26, two years out of university.
A first class graduate of the University of Nsukka, Ibe Kachikwu who studied law like his father was the best graduating student from the Nigerian Law School, winning seven of the available nine prizes in 1979.
He proceeded to Harvard where he obtained an LLM with distinction in 1980 with specialisation in Energy, Petroleum Law and Investment. before obtaining an S.J.D. An S.J.D is equal to a Phd but it is important to make that distinction before it becomes a talking point.
Dr. Ibe Kachikwu has a doctorate with specialisation in Petroleum and Investment Law Strategies, ‘the S.J.D, Doctor of Juridical Science is Harvard Law School’s most advanced law degree, designed for aspiring legal academics who wish to pursue sustained independent study, research and writing and he obtained it in record time just as he did his LLM.
Intelligent, suave, well-read and imbued with a prodigious intellect and almost photographic memory, Ibe Kachikwu taught at the Nigerian law school and has published well over 10 books on various aspects of the law including the well regarded tome, Nigerian Foreign Investment Law and Policy. But many do not know that Ibe Kachikwu published his first book, a novel, while still a teenager.
His love for writing would lead him to set up Nigeria’s most popular and once biggest selling soft sell magazine, Hints alongside Chanelle magazine where many well-known Nigerian writers and journalists like Kayode Ajala, Chidinma Awa Agwu, Grace Orji, Chim Newton, Reuben Abati, Olayinka Oyegbile, Sunny Okim, Peter Okwoche of BBC, Helon Habila, Toni Kan, Terh Agbedeh, Ngozi Emedolibe, Stella Dimoko Korkus, Pat Esame Okwoche, Sam Umukoro and many once worked.
So, how does a lawyer and writer intend to change the fortunes of Nigeria’s oil behemoth someone asked on twitter? This question is critical because Ibe Kachikwu, the 17th GMD of NNPC, is the first GMD since 2010 who is not an engineer and who, amongst the last five, has not come from within the system, meaning he is a relative outsider to NNPC.
The position he now occupies has been occupied by 5 different people since 2009, a space of 6 years which many have blamed for the poor policy direction and mismanagement.
The quick answer to that question posed on twitter lies in his antecedents and impressive oil industry pedigree; over 30 years in oil and gas as a top management staff involved in policy setting and decision making as General Counsel/Legal Adviser, Texaco Nigeria and Texaco Overseas Petroleum Co (1984 -1994); General Counsel/Secretary, Mobil Producing Nigeria Unlimited (2001); Executive Director and Vice Chairman, ExxonMobil Group of Companies (2003 till date).
He has been the Executive Vice Chairman/General Counsel, ExxonMobil Companies in Nigeria and Oversight Counsel, ExxonMobil Companies in
Africa since 2009 where he is said to have facilitated in excess of $10 billion investment from ExxonMobil Group into Nigeria and Africa.
With his specialisation in Energy, Petroleum Law and Investment as well as Petroleum and Investment Law Strategies for his LLM and SJD respectively as well as his work experience at some of the world’s top energy companies, Ibe Kachikwu clearly comes with the requisite qualifications for the change NNPC requires urgently and they are legion.
First is the perceived lack of transparency. NEITI is insisting on the implementation of its audit reports published between 1999 and 2012 which allude to the fact that showed that the Nigerian government lost about 160 million barrels of crude oil, valued at $13.7 billion, to crude oil theft from 2009-2012 and received a total of $269 billion from the oil sector, including $92 billion from oil-specific taxes, $5billion from non-oil-specific taxes from oil companies and $172 billion from sale of government equity oil. The report also alleges that Nigeria spent over $7 billion on Joint Venture Cash Calls with international oil companies.
These figures are hard to trace or authenticate because of what has been described as NNPC’s labyrinthine accounting process and lack of transparency as well as a multiplicity of accounts, something the former banker and now GMD should tackle fast.
Industry experts have described NNPC’s footprint on the oil industry as a problem rather than as an enhancer with many calling on the NNPC to divest from JV partnerships in favour of other operating arrangements like Production Sharing Contracts, PSCs. Many have also asked whether the NNPC and its subsidiaries have any business as JV operators when the ventures are groaning under cash call arrears and receivables.
Ibe Kachikwu as a petroleum lawyer and investment strategist should be able to oversee these changes and evolve a new investment policy as well as corporate governance ethos for the corporation.
The new GMD also has to look into the crude oil and other products swaps which have cost the nation $1.1bn, the extant SPA agreements and the very contentions subsidy policy which has been described as unfair to the generality of Nigerians and on which the government has, according to NEITI, spent over $4.8 trillion which could have gone to provide much needed infrastructure. There is also the $11.6billion Nigeria LNG dividends which is yet to be remitted to the Federation Account by the NNPC.
NEITI’s damning indictment of the NNPC may no longer be the starting point for Ibe Kachikwu’s urgent appraisal of what has been described as NNPC’s “legacy of inefficiency and mismanagement.
A new report by the Natural Resource Governance Institute (NRGI) has according to a report by Premium Times, revealed that over $32 billion oil revenue was lost to NNPC’s mismanagement of Domestic Crude Allocation (DCA), opaque revenue retention practices and corruption-ridden oil-for-product swap agreements.”
The report which offers a deep and independent analysis of how NNPC sells its oil, says it discovered that NNPC’s discretionary spending from domestic crude oil sale revenues has skyrocketed, exceeding over $18 billion in three years ($6 billion a year from 2011 to 2013)
The report also indicates that there is no evidence to show that NNPC forwarded to the treasury any revenues from sales of Okono crude with an estimated value of $12.3 billion (over 100 million barrels) between 2004 and 2014,
In other words, the corporation has provided no public accounting of how it used a decade’s worth of revenues from an entire stream of the country’s oil production.
Other damning highlights include estimated losses of over $1.9 billion between 2010 till date from three provisions in a single, offshore processing agreements (OPAs) contract, estimated at $381 million per annum.
As Group Managing Director, Kachikwu will provide supervisory oversight over all subsidiaries of the NNPC and with many hinting at the fact that Buhari wants to keep the petroleum portfolio, Kachikwu will likely function as the petroleum minister by default.
These will put enormous pressure on him and will require that he brings to bear on the job his experience and contacts to help sort out what has been described as NNPC’s “legacy of inefficiency and mismanagement.” His work with the American owned Texaco and Exxon Mobil will provide easy entrée to the global oil and gas circuit but his greatest challenge would be in unravelling the mystery of the maze surrounding NNPC, its subsidiaries and their accounts.
It will not be easy because there will be push-back from the guilty and compromised but for a man like Emmanuel Ibe Kachikwu who has made a career out of making difficult endeavours seem easy, the NNPC will present a tough but not insurmountable challenge.
