NIGERIA is to break up its state oil firm into 30 separate companies as it seeks to reform the corruption-ridden, under-performing giant, the junior oil minister said Thursday.
The Nigerian National Petroleum Corporation (NNPC) is notoriously opaque and has been accused of withholding billions of dollars in government revenue, prompting calls for an overhaul. The Africa’s largest oil producer, accounting for a daily output of two million barrels, but most of its inhabitants are poor.
Nigeria imports most of its petrol because of a lack of domestic refining capacity.
Minister of Petroleum, Dr. Ibe Kachikwu said “For the first time, we are unbundling the subset of the NNPC to 30 independent companies with their own managing directors,”.
“Titles like group executive directors are going to disappear and in their place you are going to have chief executive officers and they are going to take responsibilities for their titles,” he said.
“At the end of the day, the CEO of an upstream company must deliver an upstream result.”
Thanks to reforms already under way at the NNPC, the company should start making a profit by the end of the year, he said.
Oil accounts for 90 percent of Nigeria’s foreign exchange earnings and 70 percent of government revenue.
But the plunge in global oil prices since mid-2014 has significantly hurt government revenue and public spending.