The Minister of State for Petroleum Resources, Dr.
Ibe Kachikwu, yesterday, stated that he had
received the Presidency’s approval to commence
the final phase of the restructuring of the Nigerian
National Petroleum Corporation (NNPC), which
would see the Corporation unbundled into four
components, while about 1,100 of NNPC
headquarters’ staff would be disengaged.
He also stated that the country no longer has the
resources to fund its oil and gas industry, and it
is therefore, considering and developing new
models of financing for the industry in the days
ahead.
Kachikwu, who spoke at a town-hall meeting in
Abuja, yesterday, disclosed that in January 2016,
the final decision on the fate of the country’s
refineries would likely be made. He also stated
that arrangements have been concluded to adopt
a price modulation mechanism that would see the
corporation setting a price ceiling of between N87
and N97 per litre for Premium Motor Spirit, PMS,
also known as petrol.
Kachikwu, who doubles as the Group Managing
Director of NNPC said, “Financing is going to be a
key component of our goal, because new models
of financing would have to emerge. The country
does not have the sort of resources to continue
to fund the oil industry. As we go upstream, we
are going to begin to see a lot of innovative
financing mechanism to provide funding for the oil
industry.”
“My dream, if I achieve it, is that by the end of
2016, we would completely exit cash calls and be
able to find our funds one way to help support
our business and get a lot more autonomy in
terms of running the industry and report,
basically, profit to the Federal Government.”
On the unbundling process, Kachikwu said the
NNPC would be broken into four key components,
namely: the upstream company, downstream
company, the midstream company, which is gas
and power marketing, and the refining group
holding company.
According to him, one of the major restructuring
efforts would be in making the headquarters
operations cost effective, hence, about more than
half of its 2,200 core headquarters staff would be
whittled down, with a lot of the affected staff a
$$igned to the subsidiaries to help make the
units more efficient and profitable.
Kachikwu said, come January 2016, strategic
decisions would be made in terms of what areas
of the country’s refineries would be closed to
allow for full re-kitting before reopening them for
operations, while it would also be considering the
best operating model for the refineries.
“Ultimately, technical support, technical services,
and technical joint venturing would also be
models we would be looking at and reviewing in
terms of the refineries. The whole idea is find the
funds, find the right skills that you need, support
the skills that you have and try to give out, real-
time, above 90 per cent consistent performance in
refining.”
On the issue of fuel subsidy removal and
subsequent hike in the price of PMS (Petrol),
Kachikwu stated that, “One thing we are very
committed to next year, is to reduce the level of
Federal Government subsidy, if any, to the
industry, so that the industry can grow on its own
strength. We can do that without the mechanism
of saying subsidy is being removed or whatever,
but have a benchmark approach to setting prices.
We are going to see a lot more quarterly type
analysis of what prices would go for the
downstream industry, relative to the price of crude
oil,” he stated.
“The report that fuel is going to sell for 97 was
not a correct. I did not say refined products will
sell for N97. I said that between a band of N87
and N97 per litre, we are going to be looking at
prices. Today, the prices are largely close to N87,
so there might be no need to change prices,” he
added.
The minister also disclosed that the Federal
Government was considering allocating a number
of marginal oil fields to the Nigerian Petroleum
Development Company (NPDC), if it performs
creditably, so as to help it increase its crude oil
reserves base.
He also disclosed that a much more focused
audit would be conducted on the operations and
activities of the NPDC, to ascertain its a$$et base
and also determine whether it is increasing or
depleting its reserves.
Speaking on NNPC’s financials, he said: “Most of
the management accounts up to 2014 are fairly
finished; we are now looking at external audits.
Audits were last done in 2010. We have brought
the management accounts up to current; the
external audits are ongoing; the 2012 to 2014
audits we expect would be done by March next
year, which would bring us likely current.”
According to Kachikwu, the focus of the Federal
Government is to get the NNPC back to
profitability to ensure the sustenance of the
company, while it is also targeting an increase of
Nigeria crude oil production to 2.4 million per day
in 2016.
“For upstream there are some key essentials,
average production for most of last year was 2.19
million barrels per day, while we think we ought
to be able to move forward a little bit to 2.4
million barrels in 2016. To do that there are key
things that needs to be looked at.”
From gistmania . Com
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