FG to unbundle NNPC into 30 companies  

Minister of state for petroleum resources and group managing director of the Nigerian National Petroleum Corporation (NNPC), Ibe Kachikwu, on Thursday, said the state-run oil firm would be unbundled into 30 profit-making companies.

When unbundled, they will have separate managing directors in the weeks ahead, as part of the ongoing transformation of the national oil company, Kachikwu said.

Kachikwu made this disclosure at the 25 Oloibiri Lecture Series and Energy Forum in Abuja, with the theme: “Technological Advances in Hydrocarbon Exploration and Exploitation: Solutions to Global Oil Price Stability.”

According to Kachikwu, “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.”

The NNPC has been moved from a loss position of N160 billion to some N3 billion by January 2016, the minister stated, adding that by year-end the Corporation should start making some profit.

“For the first time, we are unbundling the subset of the NNPC to 30 independent companies with their own managing directors, 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 responsibility for their titles,” he said, stating further that at the end of the day, the CEO of an upstream company must deliver an upstream result.

“We are potentially moving in a direction where quite frankly for the first time in about 15 years, this company will be profitable,” he said.

The minister assured that the step was a tip of the iceberg because the unbundling of the 30 companies would make the sector more competitive. By the time these 30 companies are unbundled with their managing directors setting programmes, you are going to meet us in the active workspace.

According to him, “we are going to be competing and we are going to make these things work.”

He also informed that as part of measures to stabilize crude oil prices, some members of the Organization of the Petroleum Exporting Countries (OPEC) are scheduled to meet with Russia on March 20, 2016 in Moscow to fine tune collaborative strategies.

He 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.

In his welcome remarks, George Kalu, chairman of the Society of Petroleum Engineers (SPE), said that the Oloibiri Lecture Series and Energy Forum of this year coincides with 60 years of oil exploration and production in Nigeria, adding that the low price of crude oil affords Nigeria the opportunity to reduce cost through industry collaboration.