Nigeria's president to split state oil company NNPC into two entities

Muhammadu Buhari, President of Nigeria

Nigeria‘s President Muhammadu Buhari plans to split the state-owned Nigerian National Petroleum Corporation (NNPC) into two entities, his spokesman said on Saturday.

Buhari, elected in March on promises to combat corruption, has made clear he wants to overhaul the oil sector in Africa’s biggest economy, which provides the government with around 70 percent of its revenue.

“Mr President will soon split the NNPC into two entities. One will be an independent regulator and the other one an investor vehicle,” said spokesman Femi Adesina.

The NNPC currently represents national interests in oil and gas exploration, manages the energy sector and is the industry regulator in Africa’s top crude producer.

An NNPC source, who wished to remain unnamed, said the planned changes were long overdue.

“We can’t continue to be a regulator, a revenue collector and a business, all rolled into one. That gives room for a lot of confusion, obfuscation and misrepresentation,” he said.

Last month Buhari dissolved the NNPC board and more sackings are expected.

The president, who has said he will not appoint a cabinet until September, is widely expected to keep the petroleum portfolio for himself.

Under the constitution, the NNPC is supposed to hand over its oil revenue to the federal government, which then pays back what the firm needs based on a budget approved by parliament.

But the act establishing the state oil company allows it to cover costs before remitting funds to the government.

Source: Reuters.com

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