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Weekly UpdatesNNPC was formed in 1977 from a merger of the state-owned Nigerian National Oil Corp. and a former version of the ministry of petroleum resources. NNPC is to be restructured and turned into a commercially-focused firm no longer dependent on state funding. This is under the Petroleum Industry Bill (PIB) now being debated in the National Assembly, which increases the state's take on existing and future oil and gas production and overhauls the upstream tax and royalty system.
As it is now, NNPC's superstructure consists of a group managing director and six group executive directors. The latter are in charge of six directorates which oversee NNPC's subsidiaries, as follows:
The E&P Directorate. Its units include upstream departments, National Petroleum Investment Management Services (Napims) which oversees the producing JVs, a group which monitors the PSAs, the operating Nigerian Petroleum Development Co. (NPDC), Integrated Data Services which provides seismic and reservoir evaluation services, and Nigerian Gas Co. (NGC) which supplies the local market with gas and handles the national gas pipelines.
The Processing Directorate. Its four subsidiaries are the Kaduna Refining & Petrochemicals Co., the Warri Refining & Petrochemicals Co., the Eleme Petrochemicals Co., and the Port Harcourt Refining Co. The refineries are to be privatized. The sale of refining assets in 2007 was aborted (see down6NigrRefAug10-09).
The Engineering & Technical Directorate. Its subsidiary is Nigerian Engineering & Technical Co., which was set up as a JV with Bechtel. But the US engineering company has withdrawn from this venture.
The Commercial & Investment Directorate. This is in charge of the Petroleum Products Marketing Co. (PPMC), which markets and distributes oil products in Nigeria, and Hyson Nigeria which is a JV with Dutch trader Vitol marketing oil products in West Africa.
The Finance & Accounts Directorate. With the help of the World Bank, this now issues externally audited accounts.
The Corporate Services Directorate.
Slated for privatisation - with target dates put off repeatedly since 2000 - are the processing directorate's units, NPDC and NGC. Shell was once interested in acquiring NGC. A restructuring of NNPC had begun in late 1998 by a special committee. But successive NNPC heads have since adopted different approaches with the help of experts working under the supervision of the Presidential Office in Abuja (see background in Vol. 57, No. 8).
NNPC's board of directors is chaired by the full Minister of Petroleum, Dr Rilwanu Lukman who in late 2008 took up this post from President Umaru Yar'Adua (see OMT). On instruction from the president, the chairman appoints the group's managing director, who with the approval of the chairman, appoints the heads of the six directorates.
Lukman in early 2009 began a big clean-up campaign at NNPC and secured the Jan. 13, appointment of Muhammad Barkindo as the company's group managing director - replacing Abubakar Yar'Adua who was made head of the company in August 2007. Until then Barkindo represented Nigeria at OPEC's secretariat in Vienna. On April 6, Barkindo shook up the NNPC management, sacking the six group executive directors and saying: "The ongoing changes are in response to the enormous challenges of survival and growth of the corporation". Among the changes was the appointment of Philip Chukwu as group executive director for E&P and Aminu Babakusa as group executive director for the commercial and investment unit.
The advent of Barkindo to the top NNPC job was followed by a presidential order to dissolve the Department of Petroleum Resources (DPR), the body which regulated the E&P operations, and to create the National Petroleum Inspectorate (NPI). DPR's head Tony Chukwueke was suspended in 2008 over alleged irregularities in the award of E&P blocks. A parliamentary inquiry has been looking into the sale of blocks in 2005, 2006 and 2007, as some concessions were given to front companies.
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