Nigeria revamps oil industry; Barkindo heads NNPC
Nigeria plans to reorganize its petroleum industry and split Nigerian National Petroleum Corp. (NNPC) into seven separate entities to improve its commerciality.
LONDON, Jan. 21 -- Nigeria plans to reorganize its petroleum industry and split Nigerian National Petroleum Corp. (NNPC) into seven separate entities to improve its commerciality. The company said that, in its present form, it has conflicting roles. Its goal is to become an internationally integrated company like Petronas and StatoilHydro (OGJ Online, Sep. 10, 2007).
Legislation, in the form of the Draft Bill of the Petroleum Industry, is to be presented to Nigeria's National Assembly. It will create 11 industry institutions and six incorporated joint ventures under the major industry revamp.
One key restructuring advantage would be NNPC's securing financing from the capital markets rather than receiving it from the government, the company said. Bureaucracy and mismanagement have delayed development of major projects with other majors such as Royal Dutch Shell PLC and ExxonMobil Corp. in Nigeria and has negatively impacted NNPC's growth.
NNPC also may sell some assets, such as its refineries, to fund the expansion.
New management named
Mohammed Sanusi Barkindo, succeeding Abubakar Lawal Yar'Adua, has been appointed NNPC's group managing director and will head the corporation reforms, which have been outlined in the new petroleum bill.
"We will capitalize our operations and give financial autonomy to our subsidiaries for the development of the oil and gas sector as well as the nation," Barkindo said.
Barkindo, at the handover ceremony on Jan. 20, said: "Every oil and gas company has three responsibilities. It must explore and produce oil. It must also process what it produces and take the products to its consumers. It is an open secret that we are not performing satisfactorily on any of these roles."
Barkindo has a longstanding career in the Nigerian petroleum industry, having worked in NNPC for 23 years. He has led Nigeria LNG, served as acting secretary general of OPEC, represented Nigeria on the OPEC Economic Commission Board, and served as chairman of that commission. Prior to his promotion, he was coordinator of special duties at NNPC, where he presided over major projects.
No job losses expected
Despite the downturn in oil prices amid the global financial crisis, Barkindo said he did not expect to have job losses in Nigeria's oil sector, as the reforms would create new roles. He also wants to see job mobility between the different institutions through harmonizing service conditions so job losses would be avoided.
According to Nigerian press reports, a wave of changes are expected at the senior level, including group executive directors, the group general managers, and managing directors of some of NNPC's subsidiaries.
Lawal served as acting chief executive from August 2007 and retired from his post last week.
Contact Uchenna Izundu at email@example.com.