Abuja, Nigeria | – Nigeria’s national oil company, the Nigerian National Petroleum Corporation (NNPC) will undergo a long-overdue shake up next week, Minister of State for Petroleum Resources and NNPC group managing director Ibe Kachikwu said on Friday.
The main component of the reforms will be the unbundling of NNPC into some 30 independent companies across five operational zones, including upstream, downstream, midstream and refining.
“Within the next one week, we are going to be announcing some really major overhaul of the system, one that hasn’t been done in over 20 years,” Kachikwu said at the 25th Annual Oloibiri Lecture Series and Energy Forum of the Society of Petroleum Engineers, held in Abuja on Thursday.
Kachikwu also said he expects NNPC to return to profitability for the first time in 15 years on account of narrowing monthly losses. In January 2016, the company ran a USD 15 million loss.
“For the first time, we are unbundling the subset of the NNPC to 30 independent companies with their own managing directors,” he said. “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. At the end of the day, the CEO of an upstream company must deliver an upstream result,” Kachikwu said.
The petroleum sector under his watch, he added, would rapidly review the contracting cycle of projects from two years to six months in the upstream, stressing that review of the production-sharing contracts was long overdue.
Kachikwu concluded that, for the Nigerian oil and gas industry to make progress, there is a need for all the stakeholders in the upstream, midstream, and downstream to be on the same page on cost control, contracting, technology, and environmental issues.