The Nigerian National Petroleum Corporation has finally been unbundled by the Federal Government into seven divisions- which comprises of 20 subsidiaries.

The Minister of State for Petroleum Resources and Group Managing Director of the corporation, Dr. Ibe Kachikwu, made the disclosure while speaking to journalists in Abuja on Tuesday.

Kachikwu also made it known that chief executive officers had been appointed for the 7 business divisions of the corporation while stating that they would all report to him.

Bello Rabiu was appointed head of Upstream division; Henry Ikem-Obih, Downstream; Anobor Kraga, Refineries; Saidu Mohammed, Gas and Power; and Babatunde Adeniran, Ventures.

Isiaka Abdulrazaq was appointed Group Executive Director, Finance and Accounts, while Isa Inuwa was named as the Executive Head, Corporate Services, NNPC.

“The President has approved the final phase of restructuring of the NNPC. Under that phase, we have five business-focused divisions – the upstream, which you used to call E&P (exploration and production); the downstream; the gas power marketing, which is a pull-out from the E&P; the refineries group, which is basically for all the three refineries; and then of course the ventures for every other little company that is here and there, thrown all over the place that doesn’t seem to have a sense of direction.”

“So, the ventures will to act like the incubation centre where you nurture these companies through management, get them very efficient and then decide whether you want to spin them off to be on their own independently, or whether you want to throw them to the stock exchange. So, when I hear unbundling into 30 companies, that is not correct.”

“If you look at the companies that will come underneath these divisions, we have a total of 20 firms on the whole. We had about 15 before, so only about four or five are new introductions. These subsidiaries are already there, we only added a few. Among those earlier divisions that I’ve given you, we also have finance and services, and that brings it to seven divisions. But five are business-focused, while the others provide services.”

“Why are we doing this? It is because quite frankly, the NNPC is very over-staffed. So, we have to create work in order to ensure that everybody who is in the system will be busy and earn money. And as we began to do that, we realised suddenly that we had adequate staff and we are not really as over-staffed as we thought initially. So, the principle of our restructuring, which was approved by the President, is that nobody losses their work.”

“We have so much property in Nigeria that sometimes we don’t even know where they are. In some cases, we found out that some property had been encumbered and nobody followed up on them. This was because it wasn’t a business, it was just an allocation to do an office, which didn’t happen and so it was just there.”

“Shell, for example, recently passed back to us a huge complex in Warri, which used to be their headquarters. And then, you have that and you have an entity, for example, the NPDC saying they want to build a head office.”

Speaking on why there were still pockets of fuel queues around the country, Kachikwu said: “The reasons are really obvious. The NNPC was set up to bring in an average of about 50 per cent of the national consumption (of petrol); but as of today, we are doing literally about 100 per cent coverage.”

“And this is because the major and some independent companies are unable to bring in products; some due to foreign exchange challenges, and some due to cash flow challenges. But we’ve given out the allocations to them to try and import as much as they can.”

“The Port Harcourt refinery resumed operations just a few days ago. We hope that before the end of the month, the three refineries would have got crude and will begin to work. So, hopefully, that will soften the pressure.”

As a result of the configuration of the refineries, the minister noted that even if they all operated at 100 per cent capacity, they would only be able to produce less than 20 million litres of petrol as opposed to the 40 million litres daily consumption in the country.

“On the whole, we must target a time frame of between 12 and 18 months to get out of importation. For it is not good for the country, it leads to loss of income to the government and create a huge amount of emotional backlash.”

Kacikwu also revealed that government had not terminated the subsidy regime on petrol and kerosene, noting that the only measure taken was to modulate the prices of the commodities based on the fall in crude oil prices internationally.

“The simple and honest answer is that we have not removed subsidy. We have not. What we have done is to use the price modulation to ensure that we don’t have a subsidy cost, and I’m being frank here.

“We are doing price modulation and through efficiency, we’ve been able to knock out the subsidy component; and today, we have come to a point we are able to recover money instead of paying subsidy. So, we’ve gone from a subsidy obligation to a subsidy gain.

“Now, we intervene once in every three months; and so, by the first week of April, the next intervention will be due; and at that point, we may be tempted to reduce the price of petrol. And the essence of the modulation is that if the prices of crude increase, we will have what can be used to cushion the effect.”