AHEAD of the passage of the Petroleum Industry Bill (PIB), which ultimately seeks to reform the oil and gas sector and transform the Nigerian National Petroleum Corporation (NNPC) from just another government department to a business concern with well-defined growth paths, the organisation has embarked on an extensive self-refining exercise.
Already, the road to transformation has yielded over N20 billion savings in the projected yearly recurrent budget as well as one-off savings.

An NNPC statement by its Group General Manager, Public Affairs Division, Dr. Levi Ajuonuma, explained that to achieve this, it introduced a medley of cost-efficient strategies across departments and strategic business units.
In another development, Commerce and Industry Minister, Chief Achike Udenwa, yesterday blamed the destructive activities of militants in the oil-rich Niger Delta for the Federal Government's inability to meet its December 2009, 6,000 megawatts(mw) electricity generation target.

Nevertheless, the minister believed that in no distant future, the target would be met since supply of gas to power turbines would be uninterrupted due to the restoration of peace in the area.
The NNPC spokesman stated that part of the money was saved from the Exploration and Production Directorate through the re-negotiation of contracts with suppliers and the elimination of unnecessary committee meetings that incur huge travel costs.
He disclosed that " In the Directorates of Corporate Services (CS) and Refining and Petrochemicals (R & P), the cost-saving measures introduced include the re-negotiation of contracts with suppliers and the reduction of chemical consumption through a cutback in steam losses and overheads respectively."

At the Pipelines and Products Marketing Company (PPMC), huge amounts were also saved through the cut in demurrage costs and interest on late payments.
Ajuonuma, who said all the cost-saving strategies were achieved within one year of the appointment of Dr. Mohammed Barkindo as Group Managing Director (GMD) of NNPC, stated that the Finance and Accounts Directorate also benefitted from the cost-saving measures through the imposition of a budget cap to limit spending, while the Nigerian Gas Company, a subsidiary of the NNPC, had its revenue boosted through the collection of debts from the Power Holding Company of Nigeria (PHCN) and other commercial debtors.

He said: "Upon his appointment as the GMD of the NNPC by President Umaru Musa Yar'Adua on January 12, 2009, Dr. Barkindo, an erstwhile acting Secretary General of the Organisation of the Petroleum Exporting Countries (OPEC) embarked on a tour and appraisal of the situation on ground. He authorised the hiring of consultants to assist with defining the scope of change required and to bring international benchmark and best practices to his transformation mandate.
"One of the key actions taken after reviewing with the consultants was the setting up of the Transformation Office to coordinate and monitor progress being made in the transformation journey. This has yielded some positive results as can be seen from the over N20 billion savings which is a humble step in the process of transforming the corporation from a cost centre into a profit centre".
Ajuonuma said Barkindo and his team have identified key growth path which the corporation must tread which include growth in oil reserves and managed expansion in production capacity; repositioning gas for rapid domestic, regional and export penetration; revitalising downstream capacity to support domestic energy needs and reforming key institutions to anchor sustained growth in the industry.
He said the consultants have since gone to work with the setting up of the Transformation Office to coordinate and monitor progress in this regard.

He said that besides the transformation drive, Barkindo has helped NNPC in capturing the benefits of carbon credits that would accrue from gas utilisation efforts and that he is playing "a pivotal role in the move to activate the passage of the PIB.
"In the downstream sector, the GMD has been working to provide lasting solution to the perennial challenge of artificial fuel scarcity wrought by plethora of extraneous factors like tanker drivers strike, pipeline vandalism, and refusal of credit facility to marketers by banks among others.

"To resolve this impasse, the NNPC is set for the commencement of a two-day high level meeting of all the key operators in the downstream sector of the oil and gas industry in Nigeria. Already, critical stakeholders in the downstream sector have signalled their intention to participate fully in the forum designed to find a comprehensive and lasting solution to the fuel supply and distribution challenge noticeable within the last few months."
The Forum which is billed for the Southern Sun Hotel, Ikoyi, Lagos is expected to be attended by stakeholders such as the PPMC, the Department of Petroleum Resources (DPR), the Petroleum Products Pricing and Regulatory Agency (PPPRA), Major Oil Marketers Association of Nigeria (MOMAN), the Independent Petroleum Marketers Association of Nigeria, (IPMAN), Depot and Petroleum Products Marketers Association, (DAPMA), Navy, Police, Army and other security agencies as well as the Central Bank of Nigeria (CBN) and other operators in the banking sector. The forum comes to a climax on Thursday with a communiqu� by the NNPC and all stakeholders followed by a press conference to be addressed by the Minister of Petroleum Resources, Dr. Rilwanu Lukman.

Udenwa who spoke with industrialists in Kano yesterday assured that government was not relenting in its effort to redress the problem of basic infrastructure like power supply which had militated against sustenance of industrial activities in the country.
The minister who was in Kano to launch the "Buy made in Nigeria products" campaign disclosed that the decision by government to disburse the sum of N10 billion out of N100 billion textile revival fund through the Nigeria Industrial Development Bank (NIDB) to industrialists were part of on-going efforts to revive the comatose industrial sector of the country.

Affirming that the remaining N90 billion would be made available to the bank, he implored beneficiaries to endeavour to repay the revolving loan so that their counterparts who may be in dire need of such intervention would access it in due course.
The minister who was at the Emir of Kano's palace and the office of the deputy governor to drum up support for the campaign listed the benefits of the initiative, saying it would bolster industrial activities and employment opportunities for Nigeria.
He said it was unfortunate that billions of Naira generated by Nigeria as foreign exchange had been frittered away through the patronage of frivolous items like room appliances and edible products by Nigerians.