Nigeria to break state oil firm NNPC into 30 companies

Emmanuel Ibe Kachikwu, Nigeria’s Minister of State for Petroleum Resources and NNPC’s Group MD

Nigeria is to break up its state oil firm into 30 separate companies as it seeks to reform the organization, the country’s Minister of State for Petroleum Resources Ibe Kachikwu said Thursday.

The Nigerian National Petroleum Corporation (NNPC) is notoriously opaque and has been accused of withholding billions of dollars in government revenue, prompting calls for an overhaul.

Nigeria is Africa’s largest oil producer, accounting for a daily output of two million barrels. However, the country imports most of its petrol because of a lack of sufficient domestic refining capacity.

“For the first time, we are unbundling the subset of the NNPC to 30 independent companies with their own managing directors,” Kachikwu, who is also NNPC’s Group Managing Director, said in a statement.

“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,” he said.

“At the end of the day, the CEO of an upstream company must deliver an upstream result.”

Thanks to reforms already under way at the NNPC, the company should start making a profit by the end of the year, he said.

Oil accounts for 90 percent of Nigeria’s foreign exchange earnings and 70 percent of government revenue.

But the plunge in global oil prices since mid-2014 has significantly hurt government revenue and public spending.

Source: Home | AFP.com

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