Between cost-cutting and push for profitability at NNPCL

<p>At a time that oil and gas face a bleak future over net-zero concerns, leaving Nigeria’s revenue outlook in disarray, attempts by the NNPCL to cut cost and sustain profit making should be a good step in the right direction but lingering political interference remains a big concern that the President Bola Tinubu administration must avoid. KINGSLEY JEREMIAH writes.</p>, <p>For over 44 years, Nigeria’s national oil company, the Nigerian National Petroleum Company Limited (NNPCL) remained a loss making entity until 2020 when the company declared a N287 billion profit after tax (PAT) and a record N674.1 billion profit announcement for 2021</p>, <p>In its previous ‘last resort’ mentality, profit is necessary but social service for public good was a priority and as such the company operated in line with its then motto: “We touch your lives in many positive ways.”</p>, <p>After decades in limbo, former President Muhammadu Buhari, in 2021, signed the Petroleum Industry Act (PIA) 2021 into law. The development brought the national oil company under the Companies and Allied Matters Act (CAMA).</p>, <p>With the move, the oil firm was compelled to transition into a limited liability entity. This meant that the company, like other international oil companies and national oil companies, must compete and leave behind its corporate culture where rewards, salaries and operations are seen as an entitlement instead of being tied to productivity and efficiency.</p>, <p>With the PIA and CAMA, the national oil company is expected to operate as a private entity, a development which meant that the company would no longer have an excuse but to compete and deliver value at a time that the world is shifting from fossil fuel even as Nigeria neck-dives into persistent borrowing, poverty and dismal access to energy.</p>, <p>While in October 2022, NNPCL announced that it grew its profit after tax and assets from N287 billion and N15. 86tn in 2020, to N674 billion and N16. 3tn in 2021, respectively, The Guardian gathered earlier this week, th