Nigeria is splitting its national oil company into 30 separate units in an effort to make it profitable in a sustained low oil price environment.
Africa’s largest crude oil producer is also to push for far shorter contracting cycles in the upstream sector to drive increased efficiency, while developing gas resources is also on the menu.
Speaking at an energy forum in the capital Abuja on Thursday, Oil Minister and managing director of Nigerian National Petroleum Corporation (NNPC) Ibe Kachikwu promised a series of reforms at the ailing state player in the next few weeks.
NNPC is to be “unbundled into 30 profit-making companies with separate managing directors,” he vowed.
“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.
“At the end of the day, the CEO of an upstream company must deliver an upstream result,” he said – although in the current oil price environment, upstream companies or divisions are almost uniformly delivering comparatively weaker profits or losses.
Kachikwu said NNPC has moved from being loss-making to the tune of 160 billion naira ($803 million) to a loss of just 3 billion naira in January, adding that it should make a profit by the end of this year.
The former ExxonMobil executive also said that, under his watch as minister, the contracting cycle of upstream projects will be reduced from two years to six months, with efforts well advanced to review the current production sharing contracts model.
Kachikwu also said the administration of President Muhammadu Buhari is focusing on developing Nigeria’s gas resources, while revealing that some members of Opec – of which Nigeria is a member nation – are set to meet in Russia on 20 March “to fine tune collaborative strategies” as part of measures to stabilise global oil prices.