NNPC SET TO SACK 1,100 STAFFS.
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 assigned 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 to 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 asset 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.
