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HomeHeadlineNPDC Under Ali Zarah: One Year Review

NPDC Under Ali Zarah: One Year Review

Ali Zarah Muhammed

Following the incorporation of NNPC Ltd as a commercial entity, the NPDC, being the flagship Energy Company, is now expected to compete with the likes of Saudi Aramco, Petrobas

By: Abdullahi Sabiu

When President Muhammadu Buhari appointed Ali Zarah a month less than a year ago as the managing director of the Nigerian Petroleum Development Company(NPDC), the appointee had one singular thing in mind: to reposition the company for efficient and optimal service delivery in the era of Petroleum Industry Act(PIA).

The significance of Zarah’s appointment as the helmsman of NPDC is underscored by the new reality imposed on the company by the Petroleum Industry Act(PIA) which was passed into law by the National Assembly and assented to by President Buhari on August 16, 2021, after many years of dillying-dallying over the crucial act. And this explains why 2022 is strategic to the company because it is the first full year in the PIA era.

Interestingly, the NPDC’s growth objectives for the year -2022- stand on a tripod – operational, organizational and financial. And the MD believes “Change is the only constant thing that everybody has to do. We in NPDC have all it takes to ensure that we institutionalize two things: attitudinal change and being commercially focused.”

Following the incorporation of NNPC Ltd as a commercial entity, the NPDC, being the flagship Energy Company, is now expected to compete with the likes of Saudi Aramco, Petrobas and Petronas since all bureaucratic shackles restraining production and revenue growth have been removed.

Established in 1988 by the military administration of General Ibrahim Badamasi Babangida, NPDC, a subsidiary of NNPC, has a dual mandate: petroleum exploration and production activities. The company covers the spectrum of the upstream oil and gas business with operations mainly concentrated in the Niger Delta and spans five states- Imo, Edo, Delta, Bayelsa and Rivers with over 257 host communities.

Beyond ensuring more hydrocarbons are explored for revenue generation for the country, one essential responsibility of the NPDC is to maintain a cordial relationship with its host communities through corporate social responsibilities, constant stakeholder engagement, consultation and shuttle diplomacy, among others. The essence of this is to enable a smooth and conducive working environment for the company and the safety of its staff and facilities.

There’s no doubt that in the past one year under the dynamic leadership of Ali Zarah, NPDC has stepped up its corporate social responsibilities to these communities in terms of provision of critical infrastructures and meeting other sundry responsibilities. One significant byproduct of this increased CSR is the relative peace the company is enjoying in its domain of operation and the appreciation of the company from the beneficiaries.

For example, in December 2021, the company doled out cash to 29 mothers to celebrate what it tagged ‘Spudbabies’ in Eastern Obolo Local Government Area of Akwa Ibom State. Eastern Obolo is one of the LGAs hosting operations of Oil Mining Lease(OML 13), an asset owned 100 per cent by the NPDC but jointly operated with Natural Oil-Field Service Limited.

One of the beneficiaries of the kind gesture, Mrs Bridget Okon, who gave birth to her baby at Ikot Health Centre, described her baby boy as a lucky child because he was born on SPUD Day. She challenged NPDC to carry out wider exploration in the OML13 to discover more crude oil.

Much as NPDC is committed to the safety of its workforce, the company is also committed to the safety of its environment. No wonder the company donated a double agent fire truck to the Edo State Fire Service on February 23, 2022. During the presentation, the MD said: for NPDC operations to continue hitch-free, the environment where it operates from must be safe.”

It must be said, however, that despite the increased CSR, occasional conflicts do arise between the company and the host communities. Yet, these conflicts have never led to any major breakdown because of the prodigious capacity of Ali Zarah for shuttle diplomacy and the deployment of dialogue as a crucial tool for resolving conflicts.

With Ali Zarah fully in charge, taking full control of the company as a competitive entity now operating as a subsidiary of a CAMA NNPC limited, despite challenges posed by the impact of the lingering COVID-19 pandemic, attendant global supply glut, surge in vandalism, paucity of funds, suboptimal partnership arrangements, the NPDC has witnessed some cutting edge capabilities, including a competitive cost structure that duly leverages economies of scale, improved refinery capacity utilization, a significant reduction in contingent liability, significant improvement in brand equity, among others.

NPDC is the second-largest oil producer in Nigeria, but aspiring to be the first because, according to the MD, NPDC “has the assets, has more oil and gas reserves than some of the national oil companies elsewhere, but we are still not getting it right in terms of our daily crude oil and gas production.”

As a mark of its commitment to becoming the largest producer in the country, NPDC has been working hard to meet its target of upping production to 310,000 barrels of oil per day and 1.5 billion standard cubic feet of gas per day. Already, under the watch of Zarah, the ongoing rehabilitation of the NNPC refineries and the completion of the private ones will boost Nigeria’s position as a refining hub. There is a projection that the domestic crude oil market will increase since Nigeria has already witnessed a significant increase in urea and ammonia production capacity in the last decade.

“Refining capacity might be shrinking in some countries but in the global South(Africa and its neighbours), it will be expanding, altering the flow of crude oil as we have always known it,” Zarah said.

To achieve its lofty goal of an increase in oil production, there is the need for the company to protect its assets – human and capital- and shield them from vandals. To this end, Ali Zarah in the last one year has constantly engaged all the critical stakeholders, especially security personnel responsible for facility protection and even the host communities.

During one of his early visits to some of the heads of the security agencies in Edo State, Zarah stated that for the company to be able to explore and produce more hydrocarbons towards increased revenue generation for the country, there needs for continuous collaboration and synergy with the security agencies.

Describing security as a major global challenge for the oil and gas industry, Zarah said the NPDC is committed to building a safer workplace, not just for the NPDC staff and installations, but also for all its stakeholders.

Zarah, a certified project management expert with a solid background in IT, took sover the leadership of the over 30 years old company from Engineer Masur Sambo on August 8, 2021. He was, before the appointment, the General Manager, Materials Management in NAPIMS.

The choice of Zarah to superintend over the company in the PIA change era is particularly striking because he’s a ‘change man’ who has managed overwhelming transitions in his previous places of work ranging from when he was a deputy manager in NNPC where he was the Team Lead to design and implement the eMarket Place System, a Project PACE initiative for automating the Upstream Nigerian oil and gas industry procurement process, managed the IT Team of NAPIMS, to be the captain of the NAPIMS Supply Chain Management ship that sailed on a transformation voyage in the first quarter of 2020, among other illustrious footprints.

Armed with a sound education, Zarah has attended several Strategy and Executive Programs at prestigious academic institutions in the United Kingdom, United States of America, notable among them are Kellogg School of Management and Massachusetts Institute of Technology Business School, e.t.c.



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