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Nigerian oil giant NNPC to become real company
Abuja—The Nigerian National Petroleum Company will
be transformed from an impenetrable bureaucratic giant into a real
privately run company when restructuring is completed next year,
says Nigeria’s President Umaru Yar’Adua. After taking office a year
ago, Yar’Adua decided to break up the 30 year-old NNPC into five
separate new companies, but he has since been heading a committee
whose proposals for a new structure are expected in a couple of
weeks. Nigeria is the world’s eighth largest oil producer with 2.1
million barrels per day capacity, and oil is its chief foreign
currency earner.
But years of political interference, embezzlement, bureaucracy and
incompetence earned the NNPC a reputation as a mere milch cow for a
succession of corrupt Nigerian regimes raiding its resources on a
massive scale. Dominique Strauss-Kahn, managing director of the
International Monetary Fund (IMF), said here in February that
Nigeria had been wasting its oil riches for the past 30 years. The
presidential committee on oil and natural gas industry reforms was
expected to submit a report to the National Assembly recommending
changes to NNPC’s juridical and legal framework, Yar’Adua told AFP.
The reforms had been long been expected and the parliamentary
process would take time in view of the NNPC ‘s vital role in the
nation’s economy, he said. It would perhaps be the end of next year
before the law was changed, new legislation came into force and the
restructured company took off, said the president. “The plan is to
restructure or reposition the NNPC to become a truly national oil
company that will go and compete and operate like other
international oil companies with the capacity to use its assets, get
credit from the market and become an international operator in the
sector independent of government,” said Yar’Adua.
“It will act purely as a private sector company and this will
relieve the national budget of joint venture cash calls,” he added
in a reference to funds that the state has had to inject every year
into joint ventures with multinationals such as Shell, Chevron,
Exxon Mobil and Total. “This year, NNPC requires about 8.3 billion
dollars (5.3 billion euros) for its joint venture cash calls and out
of this, 4.9 billion dollars is coming from the national budget, and
for the first time, we asked the NNPC to go to the capital market to
raise the balance,” he explained.
In an interview with AFP in March, Energy Minister Odein Ajumogobia
acknowledged that there were difficulties in relations with foreign
companies. But he gave an assurance that the Nigerian government
would respect its 2008 financial commitments in joint ventures with
multinationals and would challenge only agreements on
revenue-sharing.—AFP
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