The Minister of State for Petroleum Resources and Group Managing Director of the NNPC, Dr. Ibe Kachikwu, has disclosed that the Federal Government will next week announce a major overhaul of the Nigerian National Petroleum Corporation as well as the firm’s unbundling into 30 different companies.
According to him, the government has started resolving the governance issues in the oil and gas sector, adding that an overhaul had not happened at the corporation in the past 20 years.
Kachikwu, who disclosed this at the Society of Petroleum Engineers’ Oloibiri Lecture Series in Abuja on Thursday, also stated that the latest financial report of the NNPC for the month of January showed that the corporation’s losses had reduced from the over N160bn of some six months ago to about N3bn.
Explaining the restructuring by the Federal Government in the oil sector, the minister said, “We are starting first with simple governance issues; those that are not contentious, that are very rapid and that deal a lot with the transformation of the national oil company.
“For the national oil company, a lot of work is going on; I am sure some of you have seen the effects; but within the next one week, we are going to be announcing some real major overhaul of the system, one that hasn’t been done in over 20 years.”
Kachikwu added, “The effect of that will be to quite frankly unbundle the huge company into four to five main operational zones – the upstream, downstream, midstream, refining, and of course, every other company that is trending to the venture group.”
“But what is more important is that at the same time, we are also unbundling the subsets of these companies to close to about 30 independent companies with their own managing directors; and so, titles like the group executive directors, which you have been used to in the last 30 years, will disappear; and in place of those, you are going to have chief executive officers.”
This, he said, would make people take responsibility for their titles, as the positions must mean something and not administrative roles.
On the slump in global crude oil prices, Kachikwu said the government had been meeting with other oil exporting countries, and expressed the hope that the price of the commodity would soon rise to around $50 per barrel.
The minister further stated that focusing on gas policies was a key element for him, adding, “The target that I am setting for myself is a 12-month type agenda to try and arrive at some of these conclusions: some working with the (National) Assembly, and some working with policymakers and the industry.”
Kachikwu said he had been involved in so many conversations with oil companies and that the essence was to define stipulated contractual terms in the industry.
He noted that production sharing contract terms had not been revised for quite a while, adding that the government was focusing more on how it could bring PSC-type contracts into joint venture structures.
-bizwatchnigeria