Collapses six subsidiaries, moves to hand refineries to third party
There are indications Nigerian National Petroleum Company Limited (NNPCL) has collapsed some of its subsidiaries in a major shakeup aimed at cutting cost and boosting profitability.
Not less than six subsidiaries were reportedly affected, with stakeholders, yesterday, telling The Guardian that the move is sacrosanct, following changing landscape of the global oil and gas industry and passage of the Petroleum Industry Act (PIA).
The company’s global oil shipping firms, NIDAS Shipping Services and Nikorma Shipping Services, which were reportedly set up in 2008 for LNG shipping and marine logistics, have been merged to become NNPC Shipping Company, reliable sources said.
In another development, Data Services limited, NNPC Oil Field Services, and Frontier exploration Services have also been merged to form NNPC Services Limited (EnSERV).
Under pressure to optimise and reduce overhead costsand ensure better operability and profitability, The Guardian learnt that the former refining and petrochemical directorate was merged with the downstream, to align with an improved cost effective structure.
The three refineries, currently undergoing rehabilitation, would reportedly be handed over to a reputable third party with experience in operating and maintain them.
Energy expert, Henry Adigun, insisted the move would enable the organisation to reduce cost and perform optimally.
“It is a good signal, “Adigun said, adding: “They are going towards profitability and efficiency, and this is what we need.”
While similar development had been tried in the past, he insisted this would yield positive results.
Renowned energy scholar at the University of Cape Coast, Ghana, Prof. Wunmi Iledare, said the move should be applauded, adding: “Anything an organisation does to enhance its economy of scale is laudable. Collapsing units is one of such things an organisation can do to reduce cost without compromising effectiveness.”
