The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu yesterday announced that President Muhammadu Buhari has approved the restructuring of the Nigerian National Petroleum Corporation, NNPC, into seven new divisions that would be business-oriented unlike the administrative role the company played in the past.
Disclosing this at a press conference in Abuja, he explained that the state oil company will, under the new structure, have five core new divisions namely: Upstream, Downstream, Refining Group, Gas and Power, as well as the Ventures’ groups. He listed the other two to include: Finance and Services groups.
He gave the names of those to immediately man the divisions as follows: Upstream: Alhaji Bello Rabiu, who used to be the Group General Manager, Corporate Planning & Strategy, will now serve as the Chief Executive Officer, CEO; Downstream: Mr. Henry Ikem-Obih was brought in as Chief Executive Officer; Refining Group: Anibor Kragha, who was formerly GGM Treasury, is now to be in charge; Gas and Power: Alhaji Saidu Mohammed who was the MD of Kaduna Refinery has been appointed to be in charge.
Ventures: Mr. Babtunde Adenira, formerly GED C&I, is now to oversee that unit; Finance and Services: Isiaka Abdulrazak is now the CEO; while Isa Inuwa who was DMD, NLNG is now Executive Head of Corporate Services.
Kachikwu stated that the restructuring was the only opportunity available to the state oil company to become productive again, adding that employees of the corporation would have to work to earn their wages going forward. He clarified that nothing much had changed with the unbundling except for the distribution of subsidiary companies of the corporation that would further be restructured into direct management of the new divisions.
According to him, “The president has approved the final phase of the restructuring of the NNPC, under that phase it is not so much different from what we have now but we have restructured ourselves into four key business components: the upstream, which is what you used to call the Exploration and Production (E&P), the downstream, which is what you called the Commercial and Investment (C&I), the gas power market, which is basically a pullout from the E&P, the refinery group, which is basically the three refineries, and of course the ventures, which is every other small company here and there that did not have a sense of direction.
“Underneath these companies, we have a collective of 20 companies on the whole, where we had about 16 before, so only about four are new introductions. So it is not so much the size and we have not split NNPC into 30 companies, but there are four major divisional groups.
“Four or five are business focused, while others provide services. Beneath these five that are business-geared are the companies that are there. For example, with PPMC, we have taken the pipeline and depots unit and put them into a different company so that somebody focuses on that, while PPMC deals with the marketing of products.”
He listed some of the subsidiaries under the divisions to include Upstream: the Nigerian Petroleum development Company, NPDC, and Integrated Data Services Limited, IDSL; Downstream Retail: Nigerian Product Marketing Company, NPMC, which was formerly PPMC, NPSC; Gas and Power: Nigerian Gas Pipeline and Transportation Company, NGPTC, Nigerian Gas Marketing Company, NGMC, and gas and power investment; and the Refineries: Warri Refining and Petrochemical Company, WRPC, Kaduna Refining and Petrochemical Company, KRPC, and Port Harcourt Refining and Petrochemical Company, PHRC. The ventures’ company includes medicals, property, pensions, shipping, and wheel insurance.
According to him, all the analysis done to date in terms of the number of staff is that we are overstaffed and the only way we can do this is to create work so that everybody who is in the system has something that they are doing and so that they get busy and earn money.
Kachikwu, who pointed out that the restructuring, took months of work with consultants to be actualised, said: “the principle of our restructuring is that nobody loses work because the environment is just too testy for now to throw people out of work.
“So nobody is losing his/her job, but people are going to get busy in the respective business units and it is a chance for anybody who wants to progress in his career and prove himself to rise up and get what he/she wants.
“It is a five business focused unbundling and they all report to the GMD and the whole idea is to focus everybody that it is no longer an administrative but business role. The group is going to become more nimble.”
The NNPC boss further stated that his team planned to stop the importation of refined products in the next 12 to 18 months, disclosing that the strategy towards achieving this objective has been clearly laid out. He noted that included the partnership with Joint Venture partners and other investors who have been invited to co-locate new refineries within the premises of existing ones.
Kachikwu stated that the process of fixing the refineries had started and that the NNPC was looking at entering into a series of partnerships with investors and oil majors on the upgrade of the refineries and in co-location of refineries along with existing refineries.
He however stressed that the country would require about $400 million to fix the four refineries, adding that the Federal Government was considering sourcing the amount from investors.
According to him, the total revamp of the refineries is being hindered by lack of funds and investment, especially as most of the refineries are old and needed massive overhaul and refurbishment.
He said talks were already ongoing with the original builders of the refineries and some oil majors who had shown interest in investing in the upgrade of the refineries, adding that when the refineries were finally fixed, they would contribute in building the country’s strategic fuel reserves.
The Minister went on to explain that addressing the issues of JV cash call arrears and ensuring adequate security of the pipelines and other critical petroleum infrastructure was part of its grand plan to boost Nigeria’s crude oil output to 2.4 million barrels per day before the end of this year.
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