April 4, 2025/CSL Update
President Bola Tinubu has initiated a major restructuring of the Nigerian National Petroleum Company (NNPC), appointing Bashir Ojulari as the new Group Chief Executive Officer (GCEO) to replace Mele Kyari and overhauling the company’s board. This move follows persistent calls for reform after years of underperformance.
Industry stakeholders have criticised Kyari’s tenure, citing declining oil production, fuel subsidy mismanagement, and rampant fuel smuggling to neighbouring countries. During Kyari’s leadership, which began in mid-2019, Nigeria’s oil output dropped from approximately 2.0 million barrels per day (mbpd) to a low of 937 kbpd in September 2022, while fuel subsidy costs surged from less than 1% of GDP in 2019 to nearly 3.3% of GDP in 2024.
Bashir Ojulari, currently the CEO of Renaissance Africa Energy and ex-Shell chief executive, is expected to bring fresh leadership and industry expertise as the Tinubu administration seeks to reposition the NNPC for improved efficiency and transparency. Beyond the change in leadership at the helm, Tinubu has also appointed a new 11-member board to oversee the strategic direction and operations of the NNPC. The board includes industry veterans with extensive private sector experience and deep institutional knowledge of the oil and gas sector. Notable appointments include Babs Omotowa, former Managing Director of Nigeria LNG (NLNG), and Austin Avuru, founder and ex-CEO of Seplat Energy, both of whom have a proven track record in managing large-scale energy enterprises. Their expertise is expected to help tackle long-standing inefficiencies within the NNPC and lay the foundation for the company’s eventual listing on the stock exchange.
Nonetheless, we note that the new leadership faces a complex mix of operational, financial, and regulatory challenges. Success will depend on strong governance, improved security, strategic investments, and policy reforms. Persistent issues such as oil theft and pipeline vandalism continue to undermine crude oil output, putting at risk the government’s goal of increasing production to 2.06 mbpd this year and 3.0 mbpd by 2030. Additionally, the long-overdue rehabilitation of dormant refineries and ongoing disputes with Dangote Refinery over crude oil supply agreements remain pressing concerns. Notably, following the suspension of the Naira-for-crude deal and Dangote’s decision to cease selling petroleum products in Naira, fuel prices have surged from N860 to approximately N950 per litre.
In the near term, we anticipate that the new leadership will prioritise enhancing security measures to curb oil theft in the oil-producing region. At the same time, the administration is likely to engage with industry stakeholders to extend the Naira-for-crude oil agreement. Over the medium to long term, attention is likely to shift towards listing the NNPC on the stock exchange, a move that could attract fresh investments. The NNPC has long been plagued by allegations of corruption, inefficiency, and lack of transparency. With growing calls for accountability, the new leadership must implement financial reforms, improve reporting standards, and rebuild investor confidence if the listing is to be successful. Beyond structural reforms, attracting new capital into Nigeria’s oil industry remains crucial to increasing production capacity and ensuring long-term sustainability.
Click here to download full report: CSL Nigeria Daily – 04 April 2025 – Oil & Gas.pdf
