Joseph Bakare
The Federal Government has finally taken the step to unbundle the Nigerian National Petroleum Corporation (NNPC) as part of measure to bring transparency to the industry.
Under the new arrangement the state run oil firm will be split into 30 profit-making companies with each having its managing director.
Minister of state for petroleum resources Ibe Kachikwu, who is also the Group Managing Director of the NNPC said the details of the unbundling would be made known soon. The measure, he said, was part of the ongoing transformation of the national oil company.
The unbundling of the huge company (NNPC) will essentially lead to the creation of four or five main operational zones: the upstream, downstream, midstream, refining and others, Kachikwu said.
Speaking at the 25th anniversary of the Oloibiri Lecture Series and Energy Forum, Kachikwu said: “Titles like the group executive directors which you have been used to in the last 30 years will disappear and in place of that, you are going to have chief executive officers.
So, at the end of the day, a CEO of an upstream company must deliver me upstream results and we are very focused on that and along those chains, we are doing very dramatic things within the sector to bring the change.
“Production Sharing Contracts (PSC) terms haven’t been revised for quite a while, we will be looking at those, JVs, and we will be focusing more on how we can bring in the PSC-type terms into JV structures, so that way, we can begin to get them to work.”
Another target Kachikwu said he has set for himself was for the oil companies to be able source for the kind of funding they may require.
The minister applauded the National Assembly on their efforts on the Petroleum Industry Bill (PIB) which he said would promote efficiency in the governance structure of the oil industry.
He noted that for the Nigerian oil and gas industry to make remarkable progress, there was need for all the stakeholders in the upstream, midstream and downstream sectors to be on the same page on cost control, contracting circle, technology and environmental issues.
He called on stakeholders to adopt integrated approach towards resolving some of the challenges of the industry in Nigeria.
In his welcome remarks, the Chairman of the Society of Petroleum Engineers (SPE), Engr. George Kalu, said the Oloibiri Lecture Series and Energy Forum of this year coincided with 60 years of oil exploration and production in Nigeria.
He said that the low price of crude oil afforded Nigeria the opportunity to reduce cost through industry collaboration.