Nigeria to break up NNPC into five sections

The colossal state-owned Nigeria National Petroleum Corporation [NNPC] was "unbundled" by the Federal Government, with five commissions taking over its functions and those of its parent ministry. As part of the major reforms in the oil and gas sector approved by the Federal Executive Council, the Ministry of Energy was replaced by a National Petroleum Directorate.
NNPC will be replaced by the National Oil Company, while the Department of Petroleum Resources (DPR) will be replaced by the Petroleum Inspectorate Commission. The National Oil and Gas Assets Holding and Management Services Company is to replace National Petroleum Investment Management Services (NAPIMS), while Petroleum Products Distribution Authority will replace the Pipeline and Products Marketing Company (PPMC).

These decisions were part of a new oil and gas policy which will be implemented by the National Council on Energy headed by President Umaru Musa Yar'Adua, with Vice President Goodluck Jonathan as deputy chairman. Other members of the council are the Ministers of Power, National Planning, Justice and Finance; National Security Adviser; Honorary Presidential Adviser on Energy, Rilwanu Lukman, and four other members to be nominated by the president at a later date.
After the FEC meeting, Minister of State for Energy (Petroleum), Chief Henry Odein Ajumogobia, said the council received a memorandum on the proposed oil and gas policy which was based on harmonized recommendations from the Dr Rilwanu Lukman-led Oil and Gas Reforms Committee set up in 2000, and another committee of the National Council on Privatization (NCP).

He said, "The recommendations arose from the sector reform implementation committee which was inaugurated since 2000 under the chairmanship of Dr Rilwanu Lukman. The committee was charged with the responsibility of restructuring Nigeria's oil and gas sector. The National Council on Privatization received the report of that committee in 2005. It had been five years of work of which experts in the industrycame together to put together this report presented to council."
The minister said, "Almost simultaneously, the NCP had also set up a committee to look at the oil and gas industry. Those two reports came up at about the same time and a committee was set up under the then Minister of Petroleum Resources to harmonise the reports because there was significant overlap. One of the highlights of the new policy is the unbundling of the NNPC. This is going to create five new organizations out of the existing structure. A new Petroleum Directorate is to be set up... the council approved the constitution of the Energy Council which will work within the six months time frame to implement the decision of the council," he said.

Another outcome of the FEC meeting was the stoppage of carrying over expenditure of capital projects till the next fiscal year. Announcing this, the Minister of Information, John Odey said the government stopped the budgetary practice in ministries and departments in order to enforce the strict budgetary discipline to fill up gaps responsible for money wastage and corruption. He said government discovered that 2006 capital projects are still being funded in 2007 without a new provision.
The cabinet also approved a N 725.5 mm contract for upgrading of power supply to the Port Harcourt Airport and lighting contracts of N 920 mm for Port Harcourt Airport and N 166.7 mm for Murtala Mohammmed International Airport.