A Review of the Nigerian Energy Industry

NNPC adopts ‘20 fixes’ to reform operations, improve profitability

21 October 2015, Abuja – The Nigerian National Petroleum Corporation (NNPC) has adopted what it described as “20-fixes” with which it hopes to reform its operations, guarantee profitability and perhaps run a transparent national oil company.

Dr. KachikwuNNPC through the “20-fixes” which are however embedded in five cardinal business objectives that it intends to pursue, plans to amongst other initiatives, attain zero tolerance for corruption, restructure its major subsidiaries as well as enhance probity in its operations across board.

Contained in its monthly financial and operational reports for the month of August, the corporation’s “20-fixes” also include its intentions to restructure Joint Venture funding and reduce cash call demands; improve retail profitability; deploy and attract focused investments; expand crude oil marketing and generate electricity profitably.

Also to be done within the initiative are, reduction and audit of running costs; restructuring of corporate centres and staff; renegotiation of existing contracts including Production Sharing Contracts (PSC); streamlining of subsidy management as well as improve security of the country’s critical petroleum pipelines.

The report, which was obtained in Abuja, also indicated that three of the corporation’s subsidiaries, the Nigerian Gas Company (NGC); Pipeline and Products Marketing Company (PPMC) and the Nigerian Petroleum Development Company (NPDC) would either be unbundled or re-kitted.

The corporation will also restructure its refining business; improve on its use of information technology for its businesses and demand for topnotch service performance from all its staff.

Accordingly, the “20-fixes” make up 20 critical issues that the corporation’s current management headed by its Group Managing Director, Dr. Ibe Kachikwu had identified and would need to be addressed in order to re-position it on the path of profitability.

Kachikwu had on his appointment stated his intentions to undertake sweeping reforms at the corporation.

He explained that the reform measures to be initiated, would be in line with the government’s intentions for the country’s oil and gas sector.

Notwithstanding its pursuit of the “20-fixes”, oil workers under the auspices of the Petroleum and Natural Gas Senior Workers Association of Nigeria (PENGASSAN) have asked the federal government to consider complete opening up of the forest of Arepo in Ogun State and set up a new military barrack there to tackle incessant breaks on petroleum pipelines that pass through the axis.

The National President of PENGASSAN, Francis Johnson made the call at the triennial delegate conference of the PPMC unit of PENGASSAN yesterday in Abuja.
Johnson explained that the challenging topography of Arepo where pipeline vandals have consistently sabotaged petroleum flows could continue to grant overriding advantages to the vandals, thus ensuring that government’s efforts at minimising products cuts would remain inadequate.

“What we are saying is that Arepo is a very thick forest and those guys see us but we cannot see them, once we try to work there, they will level anybody they see there. What we are then saying is that they should look for a way to deforest that place.

“They can ask Julius Berger or anybody to clear there, sand-fill it and then situate a military barrack there with military personnel on rotation and not on permanent basis because when they are permanent, there could be possibilities for them be compromised,” Johnson said.

He further noted: “That place is a very thick forest and from there products are supplied to Mosimi Depot and other parts of the country, hence, it is important that the government should take such step. For us, at PENGASSAN, we want to see a solution because lives are consistently lost there.”

Speaking on the union’s expectations from the government’s incoming minister of petroleum resources, Johnson noted that PENGASSAN would want a fervent push for an immediate passage of the Petroleum Industry Bill (PIB).

On this he said: “We know that the president has said that he is going to hold the portfolio for 18 months and then have a minister of state which is likely going to be the current GMD of NNPC.

“What we also like to be done is that we get a legal framework for the industry. The PIB must be passed fast. The GMD of NNPC stated recently how much we lose as a result of the non-passage of the PIB.

“We must have a legal framework for the industry or else people will lose interest and divest. That is what the government should address now, thank God the government in power have a majority in the National Assembly.”


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