To fix the nation’s ailing refineries, the Nigerian National Petroleum Corporation (NNPC) said it has finalised plans to get external funds of $500 million.
The Group Managing Director of the Corporation, Dr Ibe Kachikwu, said this yesterday in Lagos as a guest speaker at a luncheon organised by The Petroleum Club Lagos. The NNPC chief said the decision to seek repayable fund is in line with the transformation of the NNPC to become an autonomous business venture.
The $500 million, Kachikwu said, will bring the refineries back on course to give the required capacity output, adding that the funds would be repaid over the next seven to nine years.
He reiterated his commitment to making NNPC a profitable company, and to accomplish this target, he has adopted some measures including the unbundling of the corporation, cancellation of offshore processing agreement (OPA), crude swap and other unprofitable business models. He said the two of the refineries would be shut down for eight to nine months for quick repairs, while the remaining, which are better in shape would be used to supplement imports. They would be shut down after the other two are back on stream.
To turn NNPC from its current loss to profit position, Kachikwu said next year will be the most challenging in the transition and transformation programme of NNPC and the oil industry. “From 2016, we (NNPC) will have a budget and work within the budget. There will be no arbitrary deductions from the corporation’s revenues because it belongs to the government. Other important projects and activities not covered by the budget, the corporation will seek external funds like any other company, which it will repay. We have made our books open and transparent. Our accounts will be audited, and financial organizations that lend would be able to know the state of the company and basis for which they will lend,” he said.
The NNPC chief also said the Pipeline and Product Marketing Company (PPMC), an arm of the Corporation, is his worst headache. According to him, 85 per cent of NNPC losses come from PPMC because of vandalism, community issues and connivance of some of the staff with the perpetrators of the crime. To check the development, Kachikwu said he has moved the depot managers in PPMC, and has stopped pumping of products in the night. He said products are now pumped during the day.