Nigeria’s President Bola Tinubu has appointed former Shell executive Bayo Ojulari as the new head of the Nigerian National Petroleum Company (NNPC) along with a new board, raising hopes for a long-overdue reform at the state-owned oil giant. The move is seen as a critical step in tackling corruption, inefficiency, and declining oil production at the company, which plays a vital role in Nigeria’s economy.
NNPC is the backbone of Nigeria’s economy, as oil accounts for 90% of the country’s exports and nearly half of government revenue. Any changes in the company’s management and operations significantly impact the economic outlook of Africa’s most populous nation.
Energy analyst Kelvin Emmanuel noted, “No Nigerian president can succeed in moving the needle of the economy without addressing the long-standing issues that have plagued NNPC for decades.”
Currently, Nigeria produces about 1.75 million barrels of oil per day through NNPC’s partnerships with international oil giants such as Shell, ExxonMobil, TotalEnergies, Chevron, and Eni. The company also oversees fuel imports, managing assets worth approximately $161 billion as of last year.
One of Ojulari’s biggest challenges will be restructuring NNPC to improve efficiency. Experts believe this could involve cutting its workforce of over 5,700 employees and selling off non-core assets such as petrol stations and underperforming refineries to focus on oil production.
However, implementing large-scale changes could be met with resistance from influential political figures who benefit from the company’s operations and contracts. Jeremiah Enoch, an associate at consultancy firm J.S. Held, emphasized that Ojulari must also carefully navigate internal ethnic politics, which have long influenced hiring and decision-making within NNPC.
NNPC has long been accused of lacking transparency. For four decades, it did not publish financial reports, only beginning to do so in 2021. Last September, after repeated denials, the company admitted it was in financial distress and owed $6 billion to fuel suppliers.
Another major concern is the lack of clarity on how much of Nigeria’s future crude oil revenues are committed to repaying loans. While official figures remain undisclosed, local media reports suggest the amount could run into billions of dollars.
Clementine Wallop, director for Sub-Saharan Africa at political risk consultancy Horizon Engage, highlighted the tough road ahead for Ojulari. “He will need all his expertise to manage the financial difficulties at NNPC while ensuring the recent gains in oil production are sustained.”
One of the key long-term goals for NNPC is its planned initial public offering (IPO), which could take place in the next 12 to 15 months. A successful listing would inject fresh capital into the company, potentially transforming it into a more commercially driven entity. However, analysts stress that significant improvements in governance and financial transparency must occur before such a move can succeed.
Ojulari’s leadership will be closely watched as he embarks on the complex task of reforming NNPC. His success or failure will not only shape the future of the company but also have profound implications for Nigeria’s broader economic trajectory.
