Energy Economist Hails Unbundling Of NNPC

NnachiAn energy economist, Mr Onuoha Nnachi, has hailed the decision of the Minister of State for Petroleum, Mr Ibe Kachikwu, to unbundle the Nigeria National Petroleum Corporation (NNPC).

After the unbundling, Mr Nnachi said “we are going to have four or five areas and within those areas, you will have subsidiaries,” adding that “it is not the number of the subsidiaries you have, but the functionality of hose subsidiaries,” he said.

Mr Nnachi said many policies were talked about during the Society of Petroleum Engineering Conference.

He further noted that bringing professionals and experts would bring about “a better understanding from what we are expecting to come out of it”.

Speaking on the Petroleum Industry Bill (PIB), Mr Nnachi said that Mr Kachikwu was only implementing one aspect of the bill.

“Any law that is made in any country has its legal and administrative part. The legal part is still intact but Kachikwu is going ahead to implement the administrative part, which does not in any way contravene the law at any point.

“I believe that the PIB we have is too cumbersome to deal with”, maintaining that “each of these sectors – upstream, midstream and downstream – should be treated independently not holistically,” he said.

He insisted that it would take a long time before the PIB would be passed because it would take seven Senate Committees to sit and deliberate before a conclusion on the Bill is reached.

Mr Kachikwu had during the Society of Society of Petroleum Engineering Conference announced that the NNPC would be unbundled into 30 competitive revenue generating subsidiaries

The conference focused on global oil price and the use of technological advancements in hydrocarbon exploration and exploitation.

Dr Kachikwu told the petroleum industry experts that an overhaul of the foremost government oil firm, NNPC, was imminent to ensure the return of profitability and stability in the sector.

In what the Minister said would be a major overhaul of the system, the positions of Group Executive and Managing Directors, as existed in the NNPC, would be replaced by Chief Executive Officers who would head each of the companies.

He said that the move, which would be concluded within the next seven days, would reposition the corporation to bring in huge profits which had been impossible to achieve in the past 15 years.

However, other experts at the lecture noted that for Nigeria to be able to get over its financially challenging times occasioned by the instability in the oil market, advanced technology in the sector was a must to reduce costs and maximise profit.

The experts said that several sub-sector practices must be ratified and enhanced, including joint venture structures, gas exploration, oil production and refining chain among others.

Evolution Of Shale Gas Has Affected Nigeria’s Economy – Economist

Onuoha NnachiA Nigerian Energy Economist has given some clues as to what might be affecting the country’s dwindling economy.

Approaching the problem of the dwindling economy from the energy sector, Mr Onuoha Nnachi said that there are two key factors affecting the oil price which in turn, affects the Nigerian economy.

Speaking on Channels Television’s Sunrise Daily on Friday, Mr Nnachi said: “The evolution of shale gas oil production and the crisis across the Middle East, have deeply affected the Nigerian economy.

“Before the shale production started, the shale existence has been known to everybody in the industry, but the technology that would allow you do the drilling, was very high in terms of cost – the cost has been driven by the United State technologist, who had invested so much in his research,” he explained.

Giving his opinion about the increase in price of crude oil, the Energy Economist stated that the government should create higher demand of the crude oil.

“One of the key options in creating higher demand is to increase the energy consumption of the globe, the developed country should be pushed to development.

“Africa stands a chance of benefiting from the development in terms of increasing energy demand,” he said.

Answering a question on what the country has done so far to solve the problem of dwindling economy, Mr Nnachi said that “the situation today, is redefining the global alliance and that is a new evolution of the world, we have to accept it.

“Today, global alliance is shifting – oil no longer moves from the Middle East to North America, South and back to Europe.

“Coming down to our own nation, people have said in time past that Nigeria is not an oil nation, but a gas station, what have we done about our gas?,” he asked.

“Experts said we have done 187 trillion cubic feet reserved – this number has been taunted for many years which implies that we are not increasing it.

” The reserve has been a result of accidental gas – gas that was discovered while drilling oil,” he said.

Mr Nnachi further shed some light on challenges faced by people who build refineries.

“Some state governors are being threatened by persons that want to build refineries in their states.

“The refinery module development has three points that is very critical – you have to edge the supply, you must have an off taker’s agreement before funding the project.

“But today, most people who plan to build refineries may not have the edge supply, off taker’s agreement,” he added.