Nigeria to Privatize NNPC

Nigeria to Privatize NNPC

Nigeria’s Minister of State for Petroleum Resources, Ibe Kachikwu, released a draft plan to overhaul state oil company Nigerian National Petroleum Corporation (NNPC) and eventually list it on the stock exchange in a bid to modernize and streamline the country’s oil and gas industry, Reuters reported.  The ministry seeks, in the proposal, to end the OPEC member’s reliance on oil exports and shift to a “gas-based industrial economy,” and said Nigeria needs to reform the oil sector or risk output falling, according to Oil Price.

The plan also acknowledged the fact that additional reserves need to be found and brought into production, something that Nigeria has found difficult to do amid the tumultuous state that many foreign firms find themselves in while operating in country. The plan aims to ramp up Nigeria’s oil production to 2mb/d, up from the latest figure of 1.62mb/d, by way of running NNPC more like a private company rather than an inefficient state-run entity. The reforms also target Nigeria’s refinery sector and more clearly defines responsibility when it comes to oil spills and pollution.

This comes as Nigeria’s oil industry has been the target of militant groups on at least a weekly basis, and accusations have been made as to NNPC officials stealing oil and selling it out of country. While the ministry intends to consult with lawmakers about the path that lies ahead for the oil industry, some parliament members object to the notion of selling oil assets to raise money.

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