Baru After Three Years on the Saddle
By Ewache Ajefu
Dr. Maikanti Baru, the immediate past Group Managing Director of the national oil company, the Nigerian National Petroleum Corporation (NNPC), recently bowed out of office in a colorful ceremony after three years on the saddle.
When he took the reins of leadership of the energy behemoth, I recalled there were statements made by him on resumption of office.
Some of the issues he personally raised and needed tackling by his administration were, but not limited to, the retooling of the Nigerian Petroleum Development Company(NPDC), growing crude reserves, aggressive gas development, tinkering with the Joint Venture cash calls, revamping of the refineries and of course the heinous issue of security.
About thirty-six months down the line, Baru, a first-Class Engineer has left no one in doubt that under his watch, the Nigeria’s crude oil average daily production recorded an upward swing of about 2.06million barrels in 2018, translating to a 10.75 per cent increment, compared with the 2017 average daily production of 1.86million barrels.
If juxtaposed with the low-level average daily crude oil production of 1.2million barrels in 2016, Nigeria has maintained a line of consistent year-on-year improvement.
No wonder the die-hard engineer could muster courage to say during his valedictory ceremony that “I make bold to say that the crude oil production increment was facilitated through the new business models we emplaced in NNPC’s old and new business entitles. Among the reengineered entities of the corporation that have made the difference are: the Nigerian Petroleum Development Company (NPDC), Nigerian Gas Company (NGC), Petroleum Products Marketing Company (PPMC), Duke Oil, NIDAS and Integrated Data Services Limited (IDSL).
Closely linked to oil production is NPDC, NNPC’s Upstream flagship company. According to Baru, it was a major contributor to the Industry’s success story in 2018, declaring 52 per cent daily crude oil production growth in 2018 compared with the company’s 2017 performance.
It was a feat that NPDC’s average production from the company’s operated assets alone grew from an average of 108,000 barrels of oil per day (bod) in 2017 to 165,000bod in 2018, a record regarded as the strongest production growth within the Oil Industry in recent times.
A look at NPDC’s equity production share which closed at over 207,000bod, representing about 10 per cent of national daily production, was no less impressive. The company’s last average weekly production of 332,000 barrels per day makes the target of 500,000bopd for 2023 achievable.
It is instructive to note that NPDC is now the largest supplier of gas to the domestic market, delivering over 700mmscfd of gas to the Escravos-Lagos Pipeline System. These desired results were outcomes of initiatives emplaced by the Management team under my purview. These initiatives include Asset Management Tea (AMT) structure, Strategic Financing, Units Autonomy and security architecture framework.
Still n oil production, another giant achievement the Industry recorded in recent times under Baru’s watch was the 200,000bop crude oil addition by the Egina Floating Production Storage and Offloading (FPSO) which was completed and sailed away to location in August last 2018. The project achieved First Oil at 11.20pm on 29th December 2018.
The issue of Joint venture cash calls has been a knotty one for several years where the nation through its adoption experienced serious financial hemorrhage.
As Baru held sway, NNPC Management saved $1.7billion dollars from renegotiating Cash Call Areas of $6.8billion to $5.1billion with the corporation’s Joint Venture (JV) partners.
The balance is scheduled for repayment over a five-year tenor plan. Already, the corporation has defrayed $1.5billion of the arrears. NNPC would stick to the Repayment Agreement with the JV Partners as it transitions to self-funding IJV modes with the corporation’s partners, as tiding up the Cash Call issues has led to increased commitment and enthusiasm to invest in Nigerian Oil and Gas Industry and has also boosted NNPC’s credit profile internationally.
Other milestones achieved by NNPC in the Upstream Sector include: reduction in contracting cycle for Upstream Operations to nine months from an average of 24 months, with the corporation targeting a six months cycle; lowering of production cost, from $27/barrel to $22/barrel; and improving on the security situation in the Niger Delta through constructive engagement and dialogue with relevant stakeholders.
In the Midstream, Nigeria achieved an average national daily gas production of 7.90bscf in 2018, translating to 3 per cent above the 2017 average daily gas production of 7.67bscf. Of the 7.90bscf volume of gas produced in 2018, an average of 3.32bscfd (42%) was supplied to the Export market, 2.5bscfd (32%) for Reinjection/Fuel Gas, 1.3bscfd (16%) was supplied to the domestic market and about 783mmscfd (10%) was flared.
Baru’s management saw to it that domestic gas supply capacity was marginally stable at about 1700mmscfd with an average of 1.3bscfd supplied to the domestic market, due to power evacuation challenges caused by frequency Management as a result of reinjection of allocated load by Distribution Companies (DISCOs), as well as transmission line constraints.
Out of the 1.3bscfd supplied to the domestic market, an average of 71mmscfd went to the Power Sector, while 470mmscfd was supplied to the Industries and the balance of 69mmscf delivered to the West African Market through the West African Gas Pipeline (WAGP).
NNPC is expected to bridge the medium-term domestic gas supply deficit by 2020 through the corporation’s Seven Critical Gas Development Projects (&CGDPS), as a reputable Project Management consulting firm is already collaborating with an NNPC team to achieve accelerated implementation of the projects.
The full implementation of the project would boost domestic gas supply from about 1.5bscf/d to 5bscf/d by 2020, with a corresponding 500 per cent increase in power generation and stimulation of gas-based industrialization.
It is heart-warming to note that existing power plants in the country now have a permanent gas supply pipeline infrastructure, even as NNPC is poised to continue to expand and integrate its gas pipeline network system to meet increasing domestic gas demand.
Some key gas pipeline infrastructure projects on which significant progress had been made in their execution include: Escravos-Lagos Pipeline System (ELPS II), Obiafu/Obrikom-Oben (OB3), Odidi-Warri Expansion Pipeline (OWEP), Trans Nigeria Pipeline Project (TNGP) – Ajaokuta-Kaduan-Kano (AKK) Pipeline, Trans Nigeria Pipeline Project (TNGP) and Nigeria-Morocco Gas Pipeline (NGMP) Project.
One of the key promises when he took over the reins of leadership was the revamping of the nation’s refineries. He was committed to the rehabilitation the nation’s three refineries in Port Harcourt, Kaduna and Warri, to boost their capacity utilization.
To this end and specifically in March 2019, the first phase of the rehabilitation of the 210,000 barrels per day capacity Port Harcourt Refinery complex that comprises the 60,000 barrels per day old Refinery built in 1965 and the 150,000 barrels per day, new Refinery, was kick-started.
The project is being executed by Milan-based Maire Tecnimont S.p.A, in collaboration with its Nigerian affiliate, Tecnimont Nigeria.
At the end of the phase 1, the Refinery complex should to reach 60 per cent capacity utilization.
According to Baru, this first phase of the rehabilitation contract which would run for six months would involve detailed integrity check and equipment inspection of the Port Harcourt Refinery complex beginning from end of March, 2019.
The integrity test comes as a forerunner to the second phase of the rehabilitation project which entails a comprehensive revamp of the complex aimed at restoring the refinery to a minimum of 90 per cent capacity utilization.
22. Subject to the successful completion of the integrity checks, Phase 2 of the project would be executed on an Engineering Procurement Construction basis by Tecnimont in collaboration with the original builders of the plant, JGC of Japan. The rehabilitation of the other two refineries in Kaduna and Warri is expected to follow.
In the Downstream Sector, though the early part of 2018 was riddled with some supply shortages, the corporation rose to the occasion with the support of President Muhammadu Buhari and the resilience and hard work of NNPC staff to keep the country wet soon after till date.
So far, many of the corporation’s depots had been resuscitated and put into use through decanting of over 140 Million litres of PMS nationwide, with systems 2B and 2E pipelines supplying petroleum products to South West, South-South and South East Regions having been resuscitated.
Hear Baru in his valedictory remarks: “I wish to inform you that NNPC is on track in respect of the corporation’s Twelve (12) key Business Focus Areas (BUFA), and the vision of President Buhari to improving the status of oil and gas infrastructure through ensuring products availability to support national economic recovery and growth.
According to him, the focus areas include: Developing strategies to ensure security of Industry assets; Evolving new Business Models to bolster performance; Exploring ways to relieve government of the burden of Cash Calls obligation; Growing the nation’s reserves and production; Increasing the Nigerian Petroleum Development Company’s (NPDC) production; Boosting Gas Development, Effecting Refineries upgrade and expansion, Boosting renewable energy; Prioritizing Frontier Exploration, Revitalizing Oil and Gas infrastructures across the Country, Intensifying the drive towards making venture businesses of NNPC profitable and ensure service delivery; as well as ensuring staff welfare.
No wonder Dr Maikanti Baru could boast that the NNPC he was handing over to his successor, Mallam Mele Kolo Kyari was definitely on track.
Engr. Dr. Maikanti Kacalla Baru, FNSE, Acclaimed Oil Industry Performer, Transformer and Actualizer
Maikanti Kacalla Baru is an indigene of Misau, in Misau Local Government Area of Bauchi State. He obtained his West African School Certificate in 1978 with Distinction Aggregate 06 from the Federal Government College, Jos; 3 As in Physics, Chemistry and Mathematics at A Level and later bagged a First Class Honours in Mechanical Engineering from Ahmadu Bello University, Zaria in 1982. He also attended the University of Sussex, United Kingdom where he graduated with a Doctor of Philosophy in Computer Aided Engineering in 1987.
Between 1988 and 1991, he held various positions at the Jos Steel Rolling Company Ltd. including Head, Corporate Planning and Electrical Departments.
He started his NNPC career as the Engineering Manager, National Engineering and Technical Company Limited (NETCO) from May to November 1991. He became the Manager, Operations of Procurement Management Services (PROMAS) from 1991 to 1993 where he saved the Corporation over $70 million in six months of operation.
Thereafter, he served in the National Petroleum Investment Management Services (NAPIMS) as the Manager Gas Department for four years and in 1997, he was appointed General Manager, Gas Development Division. During his stewardship of the Joint Venture Gas Projects, the Division saved over $575 million through project costs optimisation.
In July 1999, he was appointed as the Executive Director, Operations of the Nigerian Gas Company, Warri.
He was appointed as the Managing Director of Hyson (Nigeria) Limited in April 2004. Under his stewardship, Hyson was introduced into the domestic LPG business and grew rapidly raking in profits of N24m in 2004, N164m in 2005 and N400m in 2006.
From 2006 -2007, he was Group General Manager (GGM), Greenfield Refinery Division, NNPC, in September 2007, appointed GGM, National Petroleum Investments management Services (NAPIMS), NNPC. In September 2009, appointed GGM, NNPC Field Services Ltd, later GGM, LNG Investment Management Services (LIMS). In 2015, he was appointed Group Executive director, Exploration & Production of NNPC, 2016, Technical Adviser, (Gas Matters) to Hon. Minister of State for Petroleum Resources and on July 4, President Muhammadu Buhari, GCFR, appointed him as the 18th Group Managing Director (GMD) of NNPC.
Engr. Dr. Baru, a one-time Chairman of the NNPC Anti-Corruption Committee, was speaker at ABU 40th Convocation Lecture, Nov., 2017; Speaker at Abubakar Tafawa Balewa University, Bauchi, 23rd, 24th & 25th combined Convocation Lecture, 2018 and Federal University of Petroleum Resources, Effurun, Convocation Lecture 2019.
As the GMD NNPC, Dr. Baru has won several awards which include the 2016 Honourary Award of the Nigerian Association of Petroleum Explorationists (NAPE) to commemorate his conferment as Honorary Member of NAPE; the 2016 Achievement Award of the Society of Petroleum Engineers (SPE) Nigeria Council.
In 2017, Dr. Baru bagged the prestigious Forbes’ African Oil and Gas Industry Man of the Year Award, the African Free Press Magazine’s Distinguished African Oil and Gas Icon of the Year Award and the PETAN Distinguished Leadership Award.
Dr. Baru, who has received several PETAN awards, is a fellow of several Professional Associations, including: Nigerian Society of Engineers, Nigerian Institution of Mechanical Engineers, Nigerian Society of Chemical Engineers, Nigerian Society of Engineering Technicians and Nigerian Metallurgical Society.
He Baru is the proud recipient of the following Chieftaincy Titles:
• Ozo Igwe Ndu of Ibagwa Nike, Enugu East Local Government Area of Enugu State.
• Akajiaku of Obinwanne, Umuaka Kingdom, Njaba Local Government Area of Imo State and Aka Unene of Obolo Community, Akwa Ibom State.