Major reform of NNPC announced

Nigerian National Petroleum Corporation (NNPC) will undergo a long-overdue shake up next week, Minister of State for Petroleum Resources and NNPC group managing director Ibe Kachikwu said on Friday.

The main component of the reforms will be the unbundling of NNPC into some 30 independent companies across five operational zones, including upstream, downstream, midstream and refining.
“Within the next one week, we are going to be announcing some really major overhaul of the system, one that hasn’t been done in over 20 years,” Kachikwu said at the 25th Annual Oloibiri Lecture Series and Energy Forum of the Society of Petroleum Engineers, held in Abuja on Thursday.

Kachikwu also said he expects NNPC to return to profitability for the first time in 15 years on account of narrowing monthly losses. In January 2016, the company ran a USD 15-million loss.

First reactions to the announcement were largely positive, with pundits pointing to efficiency gains. “We have always said the NNPC is too large and that it will be better if it was split down along its functions,” Ecobank head of energy research Dolapo Oni was quoted as saying by the Nigerian news outlet Punch.

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