The Group Managing Director of the National Petroleum Corporation (NNPC), Dr. Maikanti Kacalla Baru, and the former GMDs of the Corporation including the immediate past GMD and the current Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, yesterday raised the alarm over its debt profile.
They advised that as a matter of urgency, NNPC should establish the true state of its current financial status and immediately decide on the most appropriate capitalisation model.
The former corporation’s chiefs had a one-day meeting at the Transcorp Hilton Abuja.
According to a statement by the NNPC statement yesterday, the former GMDs expressed serious concerns about the continued dwindling of NNPC revenue.
The former GMDs are concerned about the increasing negative perception of the Corporation by Nigerians especially in terms of opaqueness and accountability. They therefore called on the Corporation to educate the public on its activities as a commercial entity managing the nation’s assets in trust.
The former GMDs advised that the refineries be rejuvenated using the Original Equipment Manufacturers (OEMs). Also, the refineries must be restructured to operate as an Incorporated Joint venture (IJV) similar to the Nigerian Liquefied Natural Gas (NLNG) model with credible partners having requisite technical and financial capabilities.
The forum advised that the Corporation should pay particular attention to its revenue-generating entities such as the Nigerian Petroleum Development Company (NPDC), Retail and the Refineries to return the Corporation to high performance, growth and profitability.
On funding of Joint Venture Operations, the forum advised that funding should be the first line charge to oil revenue to ensure sustainable production and reserve growth.
The former GMDs endorsed Mr. President’s steer for sustaining exploration activities in the frontier basins particularly the ongoing efforts in Chad Basin and the Benue Trough. They therefore advised the GMD to pay priority attention to the Chad Basin where promising prospects are recorded.
The former GMDs also reviewed the state of NNPC Pensions. They advised that NNPC should explore avenues to close the pension funding gap including the restructuring of the current model.
According to the statement, the current Petroleum Industry Bill (PIB) which proposed the incorporation of NAPIMS and taking it out of the NNPC will inhibit the effective functioning of the NNPC as a National Oil Company (NOC).
It added that this will make NNPC to operate at a different level compared to its peers in other OPEC Member Countries. While the former GMDs have no issues with incorporation, they strongly advise against taking NAPIMS out of NNPC.
The former GMDs noted that for effective functioning of any National Oil company (NOC), the technical components of the country’s Exploration & Production (E & P) must be integrated as part of the country’s NOC. They therefore posited that NAPIMS being the technical component of Nigeria’s E & P, and not just an investment vehicle, must remain with and managed by NNPC. Taking NAPIMS out will make NNPC an ineffective NOC.
