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, Nigerian Minister of State, Petroleum Resources Emmanuel Ibe Kachikwu, said on Thursday.
The Nigerian National Petroleum Corp (NNPC) is notoriously opaque and has been accused of withholding billions of dollars in government revenue, prompting calls for an overhaul.
Nigeria is Africa’s largest oil producer, accounting for a daily output of 2 million barrels, but most of its inhabitants are poor.
The country imports most of its gasoline because of a lack of domestic refining capacity.
“For the first time, we are unbundling the subset of the NNPC to 30 independent companies with their own managing directors,” Kachikwu, who also heads the NNPC, said in a statement.
“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.
Nigeria, which has been pushing for action by OPEC, said on Thursday that some members of OPEC plan to meet other oil producers in Russia around March 20 for new talks on an oil output freeze.
“We’re beginning to see the price of crude inch up very slowly,” Kachikwu told a conference in Abuja. “But if the meeting that we’re scheduling, it should happen in Russia, between the OPEC and non-OPEC producers, happens about March 20, we should see some dramatic price movement.”
“Both the Saudis and the Russians, everybody is coming back to the table,” Kachikwu said. “I think we’re very humbled today to accept that if we get to a price of US$50, it will be celebrated. That’s a target that we have.”
The Russian Ministry of Energy said it was ready for talks, but the details had yet to be agreed.
“Currently, various options about the venue and date for the meeting, where measures on oil market stabilization due to be discussed, are being worked out,” it said.
Additional reporting by Reuters
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