Why NNPC is investing in housing, power, other sectors
The story of Nigeria in the last four decades is that of the oil boom and bust has become more of what some analysts believe a ‘curse’ rather than a blessing to the country and millions of its citizens.
The volatility of the oil market over the years and Nigeria’s over-dependence on crude oil exports have not translated to desired gains. But then, the Nigerian National Oil Corporation (NNPC) has been trying its best to change the ugly narrative in recent years, investing in critical sectors and making its operations increasingly transparent in a bid to prove to Nigerians and the global community of its commitment to corporate governance principles.
Only last week, the stateowned oil company for the first time in its annals, published the financial statements which covered the audited financial accounts of its many subsidiaries. For this, the management was commended by civil society groups and the Nigerian Extractive Industry Transparency Initiative (NEITI), amongst others.
Commenting on the corporation’s drives toward increased investments in key sectors of the economy, the Chief Operating Officer, Ventures and Business Development, NNPC, Mr. Roland Ewubare, in an interview, said: “If you take a historical timeline of oil and gas, you will know it’s a boom and bust cyclical wave. So, what most operators do is to create other streams of revenue that might help during downturns.
“Fortunately, I worked for a service company in the US, Schlumberger, the largest service company in the world. Shclumberger is an oil service company but back then we had two other businesses, the one in silver valley, California that made testing equipment for silicon chips. The chips in your phone, Pentium processor etc and they had a water measuring business as well. No linkage to oil and gas, but those businesses provided the cushion during difficult times.
“Halliburton, for the longest time, were the owners of KPR, so in the same vein, in NNPC what we want to do is to create an energy company, not just an oil and gas company. And that’s why we are moving into renewable energy. “
Ewubare talked about initiatives around solar that’s paying off.
“We have biofuel agreements with various state governments.” He hinted. He said the Corporation is trying to activate those programmes more rapidly.
“Within NNPC itself, we have a bunch of non-core businesses. NNPC is one of the biggest landlords in this country. Here in Lagos, just behind Chevron, we have 90,000 hectares of land in a country where there’s a housing deficit, we are happy to collaborate with private developers to develop these assets.” He added.
The Corporation also owns land in Port Harcourt, Kaduna and several other states. It also has hospitals and clinics all across the country. “In a country where many of our citizens fly out on a daily basis to go seek medical attention abroad, if we are able to create centres of medical excellence here, then all that foreign exchange will be saved for the country.” Ewubare posited, adding that, “the ease of care will be better, since you do have your family here.”
The NNPC is having a bunch of non-core directorates. The new management is therefore trying to expand the businesses but primarily in collaboration with the private sector whose core business is around these areas.
Ewubare said: “Because we are oil men, not running hospitals. So, if we have a medical type company that wants to collaborate with us, we will be happy to talk to them. Same for those in the housing estate business, they are welcome.
“We talked about cost, about 30 percent of our cost is on logistics. We are now having a conversation with some of the biggest logistics providing companies in Nigeria to have NNPC partner in their businesses. All kinds of initiatives we have that are currently at incubation level. When they mature fully, the Nigerian nation will see the benefit of it and you and I as shareholders of NNPC will also get the benefits of it.”
Nigerians, no doubt, are looking forward to maximising the potential of the corporation’s investment portfolios in key sectors, including the $2.8 billion AKK gas pipeline project scheduled for completion in 2022, which the Group Managing Director, Mele Kyari, has recently talked about.
As expected, the project and many others are eliciting stakeholders’ interest given the opportunities such projects would provide for manufacturers and other end users in the country.