SAN FRANCISCO, March 08, (THEWILL) – President Muhammadu Buhari has approved the immediate unbundling of the Nigerian National Petroleum Corporation (NNPC) into seven independent operational units and appointments of heads, with immediate effect, for the units.
This was revealed by Minister of State for Petroleum Resources and Group Managing Director of the NNPC, Dr. Ibe Kachikwu, on Tuesday, who announced the new status of the oil company in Abuja.
According to him, five of the seven operational units will be strictly business-focused in line with global best practices of national oil companies.
The new units which make up the NNPC now include Upstream unit, Downstream unit, Refineries unit, Ventures unit, Gas and Power unit, Corporate Planning and Services unit, and Finance and Accounts unit.
Each unit would be headed by Chief Executive Officers, which are: Bello Rabiu for Upstream; Henry Ikem-Onih for Downstream; Anibor Kragha for Refineries; Saudu Mohammed for Gas and Power; and Babatunde Adeniran for Ventures.
The Group Executive Director in charge of Finance and Services would be Isiaka Abdulrazaq, while the Executive Head, Corporate Services will be Isa Inuwa.
In his press briefing in Abuja on the unbundling, Mr. Kachikwu said the seven new divisions of the NNPC would comprise 20 subsidiaries, adding that the CEOs of the divisions would report to the Group Managing Director (GMD).
Kachikwu also clarified that the subsidy regime on petrol and kerosene had not been terminated by the Federal Government. He, however, noted that what the government had done was to modulate the prices of the commodities based on the fall in crude oil prices internationally.
He said: “The President has approved the final phase of restructuring of the NNPC. Under the phase, we have five business-focused divisions – the upstream, which you used to call E&P (exploration and production); the downstream; the gas and power marketing, which is a pullout from the E&P; the refineries group, which is basically for all the three refineries; and then of course the ventures for every other little company that is here and there, thrown all over the place that doesn’t seem to have a sense of direction.
“So, the ventures will act like the incubation centre where you nurture these companies through management, get them very efficient and then decide whether you want to spin them off to be on their own independently, or whether you want to throw them to the stock exchange. So, when I hear unbundling into 30 companies, that is not correct.
“If you look at the companies that will come underneath these divisions, we have a total of 20 firms on the whole. We had about 15 before, so only about four or five are new introductions. These subsidiaries are already there, we only added a few. Among those earlier divisions that I’ve given you, we also have finance and services, and that brings it to seven divisions. But five are business-focused, while the others provide services.
“Why are we doing this? It is because quite frankly, the NNPC is very over-staffed. So, we have to create work in order to ensure that everybody who is in the system will be busy and earn money. And as we began to do that, we realised suddenly that we had adequate staff and we are not really as over-staffed as we thought initially. So, the principle of our restructuring, which was approved by the President, is that nobody losses their work.”
He declared that the NNPC had so much property that at times it was difficult to account for some of the corporation’s assets.
Mr. Kachikwu said, “We have so much property in Nigeria that sometimes we don’t even know where they are. In some cases, we found out that some property had been encumbered and nobody followed up on them. This was because it wasn’t a business, it was just an allocation to do an office, which didn’t happen and so it was just there.
“Shell, for example, recently passed back to us a huge complex in Warri, which used to be their headquarters.”
THEWILL recalls that the Minister was reported to have announced last week that the NNPC will be unbundled into 30 competitive revenue generating subsidiaries this week.
He had said that the move would reposition the corporation to bring in huge profits which has been impossible to achieve in the past 15 years adding that each of the companies would have its separate managing director as part of the ongoing transformation of the national oil company.
Story by David Oputah
