Nigeria's president, Bola Tinubu, has removed the head of the Nigerian National Petroleum Company, Mele Kyari, in a major shake-up at the state oil company, according to a government statement April 2.

With a presidential directive, Tinubu appointed Bayo Ojulari, the executive vice president of Renaissance Africa Energy Company, to replace Kyari as NNPC group CEO, with the immediate task of growing Nigeria's oil production to 2 million b/d and gas output to 8 Bcf/d by 2027, spokesperson Bayo Onanuga said.

Ojulari was previously the managing director of Shell Nigeria Exploration and Production Company.

Renaissance, a consortium of mostly local companies, last year completed the takeover of Shell's onshore and shallow water business in Nigeria in a watershed deal worth up to $2.4 billion.

Tinubu also removed the board members appointed with Kyari, with a former top official at French oil giant TotalEnergies, Ahmadu Musa Kida, appointed as NNPC's non-executive chairman.

"Ojulari's appointment, and the wider changes to the NNPC board, show Tinubu tapping the best of Nigeria's E&P talent to tackle the many challenges at the firm, and to improve the country's investment appeal," said Clementine Wallop, director for sub-Saharan Africa at consultancy Horizon Engage. "Looking at the names on the board, there's an emphasis on gas and deepwater experience; that's aligned with the way IECs see Nigeria now, and with [Tinubu's] own energy priorities."

Kyari was first appointed to lead the NNPC in 2019, following the retirement of Maikanti Baru, shortly after becoming Nigeria's national representative to OPEC. He was poised to oversee the company's much-anticipated IPO, as stipulated in the country's new Petroleum Industry Act, but last week, a statement setting the stage for an imminent IPO was retracted within hours.

"That there is talk about an NNPC IPO is part of this, but more relevant is having people in place who excelled at IECs, and who will now bring that excellence to engagements with operators in Nigeria," Wallop added.

Kyari also battled to end years of production declines in sub-Saharan Africa's largest producer. In January, crude and condensate production rose to a multiyear high of 1.74 million b/d, according to official figures from the upstream regulator NUPRC, before dipping again in February, with analysts skeptical that production increases can be sustained.

The presidential statement noted the changes were "crucial for enhancing operational efficiency, restoring investor confidence, boosting local content, driving economic growth, and advancing gas commercialization and diversification."

Tinubu's spokesperson added that the government had succeeded in securing $17 billion in new investments into the Nigerian oil sector between 2023 and 2024. The administration aims to increase that figure to $30 billion by 2027 and $60 billion by 2030, Onanuga added.

The immediate action plan of the new board also includes a "strategic portfolio review of NNPC-operated and Joint Venture Assets to ensure alignment with value maximization objectives," the statement said.

Ikemesit Effiong, partner at Lagos-based SBM Intelligence, said the new board was "stacked with experience and political savvy" but warned that the presidential directive could shake investor confidence in the commercial independence of NNPC.

Kyari, he said, had become "the key architect" of the company's transition from a state-owned entity to a commercial enterprise, made under a directive of the PIA.

NNPC is also responsible for the exploration and development of certain oil acreage and managing the Nigerian government's share of joint venture oil partnerships with international companies, including Shell, ExxonMobil, Chevron, Eni and TotalEnergies.

However, a number of oil majors have now divested from many of their onshore and shallow water oil assets owned jointly with the Nigerian government in the restive Niger Delta, long plagued by crude theft and sabotage, turning over their stakes to local players like Renaissance, Seplat Energy and Oando.

Since then, IOCs have largely turned their attention to Nigeria's deepwater offshore oil provinces, which officials say could drive the country's production growth in the medium to long term.

Downstream woes

NNPC also owns four refineries with a total capacity of 445,000 b/d, but has struggled to make them fit-for-purpose after a wave of closures between 2019-2020.

In late 2024, the company restarted its 60,000 b/d Old Port Harcourt refinery and 125,000 b/d Warri refinery, but both plants have since suffered outages and made minimal contributions to local fuel supply balances, according to traders.

The statement from Tinubu addressed sluggish growth in the company's refining output by asking the new NNPC board to grow its refining activity to 200,000 b/d by 2027 and 500,000 b/d by 2030.

The state oil company was also expected to play a major role in supplying Nigeria's new privately owned Dangote refinery, but has consistently underperformed on its commitments to the 650,000 b/d site.

According to S&P Global Commodities at Sea(opens in a new tab) data, NNPC delivered roughly a third of the discounted crude oil it had pledged to the refinery in its first six months of operations.

A later deal to supply the refinery in Nigeria's home currency committed 385,000 b/d to the plant, but actual deliveries amounted to roughly 280,000 b/d according to CAS data.

In July 2024, the national oil company reduced its stake in the Dangote refinery from 20% to 7.2%. It has yet to agree to a new crude-for-naira deal with the company after its previous agreement expired in March.