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NNPC moves to cut cost, restructure operations and merges some subsidiaries

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The Nigerian National Petroleum Company Limited (NNPC) is undergoing an in-house reorganization in its efforts to adapt to new operational demands as a commercial entity, with the rationalization of several Strategic Business Units (SBUs), according to insider sources familiar with the matter.

The recent restructuring, affecting the data services unit, shipping departments, and refineries management, comes in the wake of the firm’s transformation into a commercially driven entity following the enactment of the Petroleum Industry Act (PIA).

In February this year, NNPC Limited formally took over the assets of the corporation, transitioning into a company regulated by the Companies and Allied Matters Act (CAMA), after 46 years of operation as a corporation. This transformation led the company’s leadership to make decisive moves to reposition the organization.

One notable change was the merger of the former refining and petrochemical directorate with downstream operations, aiming to enhance alignment and cost-effectiveness. Additionally, the three refineries, currently undergoing rehabilitation, are being managed as rehabilitation projects supervised by a refinery coordinator, as part of the effort to curb inefficiencies caused by unwieldy units.

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The company had previously expressed its commitment to shutting down underperforming business units to ensure compliance with set standards, a move aimed at optimizing operations and reducing overhead costs.

Regarding shipping operations, NNPC’s shipping companies, Nikorma Shipping Services Ltd., NIDAS shipping services, and Marine Logistics, have been merged to streamline operations and eliminate inefficiencies.

Furthermore, a significant merger occurred between Integrated Data Services Limited (IDSL), NNPC oil field services, and Frontier Exploration, forming NNPC Services Limited (EnSERV). This newly strengthened unit focuses on exploration, seismic data management, and general oilfield services, showcasing promising achievements in exploration activities in various regions.

Addressing allegations of non-remittance and discrepancies in payments to the federation account, the source revealed that President Bola Tinubu established a committee to reconcile the differences, which is currently active.

NNPC, now positioning itself as a commercial and competitive player, aims to become a formidable competitor to International Oil Companies (IOCs) and other indigenous players in the oil and gas industry. The company’s new status and strategic reorganization demonstrate its commitment to adapting to the changing landscape under the PIA and strengthening its position in the market.

(omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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