AN ADDRESS BY NIPCO MANAGING DIRECTOR, MR SURESH KUMAR AT THE COMPANY’S I9th ANNUAL GENERAL MEETING (AGM ) HELD AT… ABUJA ,FEDERAL CAPITAL TERRITORY ON…
Distinguished Shareholders, Ladies and Gentlemen.
It is with great pleasure that I welcome you all to the 19th Annual General Meeting (AGM) of our company as we continue to build on the success made so far in the nation’s Oil and Gas industry. Today’s event like the previous ones provides veritable avenue for you as a shareholder to interface with Board and Management of this great company, in respect of its efforts and challenges in the Financial Year ended December 31st, 2022.
This yearly event also provides an opportunity for you as investors to get acquainted with the future outlook of the company.
YEAR 2022 IN PERSPECTIVE
The Oil and Gas Industry in the year under review faced a lot of challenges, some of which are extraneous to the Country. For instance, in 2022 it was very critical for the industry owing mainly to the Russia – Ukraine war.
The war accentuated the challenges in the global hydrocarbon industry, Nigeria not left behind as crude oil price went up astronomically. The crisis made access to petroleum products very difficult and costlier. This had adverse impact on Nigeria economy. The country’s reliance on products imports leads to skyrocketing prices due to the ban in procurement of petroleum products from Russia.
Other challenges plaguing the industry are: paucity of foreign exchange to import deregulated petroleum products, naira volatility, frequent freight increases etc. The declining margins on petroleum products continued in the year under review following the upward cost of operations.
The inauguration of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as regulatory agencies in the same industry as specified by the Petroleum Industry Act remains one of the bold moves of the Federal Government to streamline operations in the industry. The two organizations have held series of consultative meetings with operators in all areas of the nation’s hydrocarbon industry. We are hopeful that by the time all the consultations are concluded, most of the regulatory challenges being faced by operators would have been amicably resolved in the overall interest of stakeholders.
Government efforts in deepening gas utilization in consonance with global energy transition is commendable but more concerted efforts are nonetheless still needed in the areas of infrastructure to guarantee access to the products. Operators have based their hopes on speedy completion of the Abuja – Kaduna – Kano (AKK) gas pipeline and subsequent connection of more cities to the gas pipeline across the country.
Our company’s daunting efforts in the industry and indeed gas sector is also worthy of note with its wholly owned subsidiary, NIPCO Gas Limited (NGL). The company has continued to deepen domestic gas utilization through access to both CNG for auto use and piped natural gas for industrial usage. It has constructed and laid over 100 kilometers big gas pipeline and currently in Lagos – Ibadan expressway linking Ogun State to its neighboring Oyo State via gas pipeline.
NIPCO Gas Limited (NGL) embarked on the construction of three CNG refill stations in Federal Capital Territory (FCT) and environs in 2022 to facilitate access to gas by motorist and other end users. Two of the stations are ready and functioning with the Abuja airport road station servicing the newly inaugurated mass transit buses for civil servants in the territory among other motorists.
NGL is entrenching its presence across the federation encouraging a switch to natural gas by motorists and industries as preferred energy source through massive investment in infrastructure to improve access. It is also a stakeholder in the Federal Government National Gas Expansion Program with her footprints in 22 States with conscious plans to cover the entire country soonest.
Despite the aforementioned challenges, our dear company has been able to pull through with a modest performance that has contributed to guarantee good return on your investment.
Our company will continue to act in concert with its peers in the industry to achieve energy security for Nigeria.
Our performance in 2022 was mainly on long-term growth strategy that was anchored on prudent management of resources, cost optimization, team work and unflinching support of the Board of Directors.
HUMAN CAPITAL
The human capital element of our company will continue to elicit management positive attention even in the face of economic challenges that are fast affecting standard of living nationwide.
My management team with the kind support of the Board will continually improve the lots of the workforce which in turn ,we are sure will impact favorably on productivity.
Since 2020, upon my assumption of office with my executive management team, I have observed with delight the unwavering commitment of the workforce in sustaining the lofty heights of the company. We shall continue to be proactive in the face of global economic challenges to reduce the effect on the workforce.
The harmonious relationship existing in the company has not only been exemplary but also a reliable platform for team building to take the organization to the next level.
The employee’s ingenuity and stern commitment to exceptional service delivery have made your company one of the key players in the nation’s downstream sector. Our employees continued to see more value in rendering stellar services in line with international best practices.
CORPORATE SOCIAL RESPONSIBILITY
We have continued to maintain a strong relationship with our numerous publics to remain a socially responsible organization. Several initiatives to offer support in several fields of human endeavor are being actualized to assist our stakeholders, especially in our host communities.
With our continuous investment in CSR which remains cardinal in our operations, we shall continue to have some form of leverage in our overall operating environment as a socially responsible organization.
Our ultimate aim is to have a lasting footprint in social investment drive in our operating environment in particular and the nation at large.
OUTLOOK
I am upbeat about the future of your company. My optimism is predicated on the strategic investment plans being marshaled by my management team with the purposeful direction of the Board. The unwavering commitment of the workforce is also a good pointer to more glorious years of operations ahead.
Although we still have some challenges, which of course is not peculiar to us as an operator in the industry, if we are to forge ahead as one of the leading players, we hope to take such challenges with all seriousness it deserves.
As part of consolidating the successes achieved in the last 36 months of the current executive management, we will continue to appraise our operations for more diligent service delivery to our stakeholders.
We will endeavor to improve in all areas of our operations to ensure that concerted efforts are made toward achieving the vision of the promoters of the organization.
Hopefully with the plethora of measures being put in place to improve the human and material resources of your company and the continuous support of our esteemed public, a brighter future would be guaranteed for NIPCO Plc. We will continue our investment in the hydrocarbon industry as a further attestation of the resilience of the Nigerian economy.
As we await the full deregulation of the downstream sector, we are assuring you of our preparedness to utilize the measure to grow your company through the combined efforts of our human and material resources. We have all expertise and structure in place to expand the infrastructure in Natural Gas consumption which we foresee as the future of energy market in Nigeria.
We intend to consolidate our position in the industry and strive for greater market share in the petroleum products marketing stream. Effective harnessing of our human capital will be pursued to give a fillip to your company’s commitment to providing top-notch customer service experience at all times.
APPRECIATION
My third successive year superintending the affairs of NIPCO Plc has further embolden me in the benefits of team spirit in running such a big organization. I thank you all for the support received in the last 36 months in the leadership saddle of the company and look forward to the continuing faith in my team in 2023.
Pertinent to mention that our regulatory agencies including the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigeria National Petroleum Company Ltd have all contributed meaningfully to our growth trajectory in 2022.
The Board of Directors of your company have always been a major pillar of support to the management through worthy policy directives in moving the company forward. As shareholders of this company with thousands of others, your support has been two-fold – investors and customers. We will not let you down in the march to take NIPCO Plc to the next level.
Kind regards.
SURESH KUMAR
MANAGING DIRECTOR /CEO