The Federal Government is to break up the Nigerian National Petroleum Corporation (NNPC) into 30 separate companies as it seeks to reform the corruption-ridden, under-performing giant, Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said Thursday.
Kachikwu made this disclosure at the 25th Oloibiri Lecture Series and Energy Forum in Abuja with the theme: “Technological Advances in Hydrocarbon Exploration and Exploitation: Solutions to Global Oil Price Stability”.
The NNPC has been accused of withholding billions of dollars in government revenue, prompting calls for an overhaul.
“For the first time, we are unbundling the subset of the NNPC to 30 independent companies with their own managing directors,” Ibe Kachikwu, who also heads the Group Managing Director of NNPC, said in a statement.
“Titles like group executive directors are going to disappear and in their place you are going to have chief executive officers and they are going to take responsibilities for their titles,” he said.
“At the end of the day, the CEO of an upstream company must deliver an upstream result.”
Thanks to reforms already under way at the NNPC, the company should start making a profit by the end of the year, he said.
Oil accounts for 90 percent of Nigeria’s foreign exchange earnings and 70 percent of government revenue.
But the plunge in global oil prices since mid-2014 has significantly hurt government revenue and public spending.
Kachikwu informed that as part of measures to stabilize crude oil prices, some members of the Organization of Petroleum Exporting Countries (OPEC) are scheduled to meet with Russia on 20th March, 2016, in Moscow to fine tune collaborative strategies.
He noted that the President Muhammadu Buhari administration is focusing on developing the nation’s gas resources in order to boost revenue as part of the diversification policy of the Federal Government.
Dr. Kachikwu said the petroleum sector, under his watch, would rapidly review the contracting cycle of projects from two years to six months in the upstream, stressing that efforts are in top gear to review the existing Production Sharing Contracts which is long overdue.
