9th March, 2016
Nigeria’s Minister of State for Petroleum Resources, Ibe Kachikwu on Wednesday said state oil firm, Nigerian National Petroleum Corporation, NNPC, has not been unbundled contrary to the fears of workers of the corporation.
Workers of NNPC had on Wednesday expressed their disapproval to reforms and restructuring of the oil company by shutting down offices of the corporation nationwide.
Kachikwu, former executive of Mobil Oil who was appointed the Group Managing Director of NNPC and later, also appointed the Minister of State for Petroleum by President Muhammadu Buhari late last year had embarked on reforms designed to transform the company to a profit making entity.
The Minister told journalists in Abuja on Tuesday that the President had approved a new, profit driven structure for the organisation with the creation of seven units from the oil behemoth.
The Minister said five of the seven operational units would be strictly business-driven in line with global best practices.
He listed the new units to include those for Upstream, Downstream, Gas and Power, Refineries, Ventures, Corporate Planning and Services, and Finance and Accounts.
He said each of the units would be headed by Chief Executive Officers whose appointments, he said President Muhammadu Buhari who is also the Minister of Petroleum has approved.
He listed the new CEOs as Bello Rabiu for Upstream; Henry Ikem-Onih for Downstream; Anibor Kragha (Refineries); Saudu Mohammed (Gas and Power), while Babatunde Adeniran takes charge of Ventures.
He was emphatic that the restructuring will not lead to job losses during the press conference. But workers of NNPC seemed not convinced.
According to him, unlike before, the job of the new CEOs will no longer be merely administrative, but will now be saddled with the task of ensuring that their operations are run profitably.
The two main workers unions in the industry, National Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) had urgently summoned a meeting of their executive councils on Tuesday night in response to the announcement.
At the meeting, the workers’ union agreed to shut down operations of NNPC nationwide as protest against the reforms.
The two unions had said in a statement that after extensively discussing the pronouncement of Kachikwu, they “observed that the GMD/HMSP totally disregarded due process and failed to engage stakeholders.
“Hence, from midnight today (Tuesday, March 8), all NNPC locations will be shut down completely until further notice. Further directives will be communicated accordingly”.
PENGASSAN through its acting General Secretary, Comrade Lumumba Okugbawa in a Statement released on Wednesday said the plan to unbundle the NNPC announced by Kachikwu, amounts to policy somersault on the part of the government.
Apart from driving investors away from the Nigeria oil industry, PENGASSAN said government did not take into consideration the existing law that established the NNPC before planning to unbundle the corporation.
He said: “There is an existing NNPC Act of 1977 that set up the NNPC.
“This Act has many provisions that deal with structure and operations of the corporation. There are many issues such as pensions and transfer of the employees, which are provided for in the NNPC Act of 1977.
“What will happen to all these provisions of the law? For the government to do anything with the current NNPC, the Act must either be repealed or amended to accommodate the planned restructuring.
“If not done, it will amount to lack of respect for the rule of law on the part of the government.
“The Petroleum Industry Bill that is expected to be the legal instrument for the ongoing reforms of the Oil and Gas industry will be meaningless if the Government should introduce plans outside the reforms.
“The PIB is germane to the development of the nation’s Oil and Gas industry.
“Above all, the various stakeholders, especially the unions, should be involved before any major change is carried out in the organisation and before any unilateral statement capable of heating up the industrial climate is made.”
He therefore repeated the association’s call for an all-inclusive Stakeholders’ Forum where all issues confronting the industry can be looked into with solutions proffered to them.
But Kachikwu told journalists at Aso Rock Presidential Villa on Wednesday after the Federal Executive Council (FEC) meeting that NNPC has not been unbundled, but only being reorganized.
He added that some of the new entities he announced on Tuesday have been part of the structure of the company before.
“We have not unbundled NNPC. We had a press conference yesterday where I explained this.
“What we have simply done is reorganisation. We have five business entities focused on business: Upstream, Downstream, Refineries, Gas and Power that are there before.
“There is also Ventures that captures all our little companies that were not having proper stewardship. They are run by individuals who report to the GMD.”
He was emphatic that NNPC has not been unbundled in the sense of breaking it up into distinct institutions.
“The NNPC is still a whole. There is nothing new that has happened.”
Kachikwu who said he has tried to explain the restructuring to NNPC workers added that he will convene another meeting to further explain the situation to them.
“We are going to have a meeting, and they will be made to understand. Perhaps the engagement has not been good enough,” he said.
“I am concerned. I don’t want the industry shut down. I am sure we are going to resolve the issues very soon,” he stated.