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Nigeria has come up with a plan to reform its oil sector by giving NNPC a much-needed makeover with the ultimate aim of listing it on the stock exchange.
The reforms, which the ministry of petroleum released late on Thursday, come in the wake of accusations that its energy sector is rife with mismanagement and corruption. Nigeria’s oil industry has been the target of militant groups on at least a weekly basis, and accusations have been made as to NNPC officials stealing oil and selling it out of country.
While the corruption charges have been lingering for years, the Minister of State for Petroleum Resources Dr. Ibe Kachikwu has said that corruption in its oil and gas industry “was overblown.”
As a result of a general lack of acknowledgement that a problem with the country’s oil and gas industry indeed exists, the nation’s oil-sector problems—which clearly do exist—have not been properly addressed. This new plan to reform the sector seeks to change that.
The proposed reforms, according to Reuters, aims to end Nigeria’s reliance on oil exports, and instead, looks at shifting toward a “gas-based industrial economy,” adding that the oil sector needs to be reformed.
The plan also acknowledges the fact that additional reserves need to be found and brought into production—something that Nigeria has found difficult to do amid the tumultuous state that many foreign firms find themselves in while operating in country.
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The plan’s hope is to ramp up Nigeria’s oil production to 2 million barrels per day—up from the latest figure of 1.62 million barrels per day—by way of running NNPC more like a private company rather than an inefficient state-run entity.
While the ministry intends to consult with lawmakers about the path that lies ahead for the oil industry, some parliament members object to the notion of selling oil assets to raise money, so there is work yet to be done.
Critics of the plan also pointed out deficiencies in the plan’s specifics—another potential stumbling block for Nigeria tightening up its oil belt.
The reforms also target Nigeria’s refinery sector and more clearly defines responsibility when it comes to oil spills and pollution.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.