Nigeria Content Online

The aim of listing
the Nigeria National Petroleum Corporation (NNPC), Nigeria’s oil
behemoth, on the Nigerian Stock Exchange may just be a matter of time.
Timothy Okon, group general manager corporate planning and control at
the NNPC, said a major plank of the ongoing business transformation of
the entity is for Nigerians to be given equity stake in order to make
it a more efficient and accountable business enterprise.

Speaking at the
July Breakfast Meeting of the Nigerian-South African Chamber of
Commerce held yesterday in Lagos, he said the company’s strategy is to
be a major player along the power and gas value chain. He however said
it would require the appropriate legislation to strip it of its current
regulatory function and transform into a truly competitive oil, gas and
power company. “NNPC wants to attract investment capital,” he said. “We
have a 10 year scheme and we think that the second phase will be
consolidating businesses in terms of performance management which we
are currently doing so that by mid 2011, most of the technical process
and structures would have been in place.” He said the Petroleum
Industry Bill (PIB), one of the critical legislation that would be
required would have been passed by then.

National content

He said under the
PIB and National Content policy of government, NNPC’s role would be
that of compliance with the national content provisions. “So we expect
to see those structural changes where the regulatory functions will
reside with the regulators and ours will just be a purely commercial
role.” He however faulted the provision of the PIB which stipulates
that the national oil company will become a limited liability accompany
only of the government chooses, making it optional for government to
fully relinquish control. “This is probably the only place in the world
where government retains that option two years after.” The national
content policy involves the value added to or created in the Nigerian
economy by a systematic development of capacity and capabilities
through the deliberate utilization of Nigerians and Nigerian companies
in order executing contracts in the Nigerian oil and gas industry. Mr.
Okon, who is also the director of transformation, said as part of the
transformation process, it was embarking on stabilizing and improving
the governance system. “We need to improve governance so that
transformation parties can come in. There is need to reinforce
commercial focus and reduce political patronage. You know at the board
level, the board members have fiduciary responsibility under the
Companies and Allied Matters Act (CAMA). Doing this will lead to
improved governance,” he said.

Growing business

According to him,
the company was focusing on upstream and midstream. “We are growing
businesses in gas and power,” he said. “We are growing retail
businesses. We have about 300 affiliate stations being rebranded. NNPC
is also seeking to do a lot of the importation of petroleum products.”
He added that its subsidiary, the National Petroleum Development
Company with responsibility for petroleum exploration and production
now refines 61 barrels per day compared to 40 barrels per day before
the transformation process began.

“Production at Kaduna refinery has stabilized,” he said. “We are
trying to attain some measure of profitability. By end of July we
should have a retail system with an independent structure as we prepare
for unbundling.” He said the company was streamlining its expenses in
line with its new business focus. “We are trying to guide a process to
try and instil commercial discipline. Whereas in the past budget was
about spending money without minding whether it was profitably spent or
not. So we are focused on ensuring NNPC profitability, refineries as
profit centres, and enhancing NNPC retail business, international
supply and trade business, focusing on gas and power and driving
management performance across the corporation.”