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Commercializing NNPC with caution


Despite the global glut and the ravaging storm, Nigeria still remains Africa economic colossus and number one oil and gas producer. Nigeria is still revered by its neighboring countries and internationally for its enormous market which is the biggest market and economy in Africa since 2014 and highly professional work force in the oil and gas industry.


With a oil production capacity of about 2.5m barrels per day, Nigeria is poised to increase daily production to 3.0mbd.  The oil glut which led to low prices contributed to the devaluation of Naira twice, though some pundits such as Alhaji Aliko Dangote , Africa richest man, believe that the global oil glut will not give a devastating knockout to the Nigeria economy because the economy is highly diversified through the service, telecommunication, mineral, agriculture and financial sectors.

Dr. Ibe Emmanuel Kachikwu
Minister of State for Petroleum/ GMD of NNPC

Even with the ongoing situation, Nigeria government continues to strategize on how to make the oil sector in general and the national oil company more profitable and also to ensure that production is increased by 2017, The government is also bent on biffing up security for oil assets and infrastructures.


Listening recently to the speech of the Minister of State for Petroleum, Dr. Ibe Kackikwu at the recent Oloibri Lecture in Abuja, and the industry trend in Nigeria espouses an indication that the minister who also doubles as the Group Managing Director of NNPC has a good blue print for the crystallization of the hope of the nation for a more buoyant oil sector and the healing of an epileptic national oil company.


More pronounced in Dr. Kackikwu’s speech was the ubiquitous resonance of commercializing NNPC or its unbundling as has become the new cliché is like an old song, which when it reverberates its soothing to every soul that wants to see a new plasma of life flow in the epileptic national oil company with the hope that it will regenerate a more prosperous Nigeria.


While one applauds the new move of the Buhari government under the pragmatic leadership of Dr. Ibe Kachikwu, to unbundle or split NNPC and its subsidiaries into 30 sub-units, it is pertinent to establish that this cud should be chewed with immense caution. While it is envisaged that the unbundling or massive splitting of NNPC  could produce the magic wands to make the ailing institution profitable, if not well managed could degenerate to creating weak organizational structures and entities that would lose their core competencies. This might invariable suffocate quality and efficiency in the long run.


The honourable minister quiet understood that in the current weak market situation, where the plunging oil prices due to the global glut has affected the market dynamics that cost cutting is paramount for the Nigerian oil industry to remain afloat. Cost cutting should be generated through lean operations and ensuring quality in all ramifications. There should be immense elimination of waste or “muda” as the Japanese would call it through lean production, lean inventory; capacity building and performance enhancement through relevant industry training.


One major challenge before Dr. Kachikwu and his team is to be able to select proven leaders for the new companies that will be ready on day one to boost the morale of workers, design job enrichment programs and also be able to foster collaboration and ensure high performance cultures.

Alhaji Aliko Dangote
Chairman, Dangote Groups

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