The Nigerian Nationwide Petroleum Corporation (NNPC) introduced in October final yr that the much-anticipated Okpai Energy Plant in Delta State, the most important fuel-power initiative in the African continent, is on the verge of turning into operational. The two phases of the mission that would together generate 1,000 MW of electricity on completion is being applied under the Clean Improvement Mechanism Protocol of the UN Framework Convention on Climate Change. The rare achievement, which marks a major milestone within the nation’s infrastructure development, reconfirms NNPC’s place as a principal driving drive behind the Nigerian financial system.

The state-owned NNPC provides gas to industrial services, business enterprises and individuals, with operations that cover the prolonged spectrum of the Nigerian petroleum trade. An intensive brief tasks it with all elements of production, distribution and marketing, besides coaching workers, managing oil leases, encouraging indigenous participation, guaranteeing uniform pricing in native markets and exploring allied industries, amongst other issues. With sales totalling $2.6 billion in 2005, it’s a serious revenue earner for the government that additionally offers employment to over 15,000 folks. The company’s historical past goes again to 1971, when the Nigerian Nationwide Oil Corporation (NNOC) was created after the country signed on to be a member of the OPEC.

Six years into its existence the corporate was renamed to its present avatar, whereas the federal government went on to decentralise it into 9 subsidiaries in 1981. Over the following two decades, the NNPC considerably augmented its holdings in multiple oil ventures amid sustained makes an attempt to make it a financially autonomous and commercially integrated entity. Nevertheless, at the same time as international oil companies clamoured to put money into Nigeria, the NNPC faced extreme challenges on account of political instability, inept governance and large corruption.

The evolution of NNPC into present day can be a narrative of grave mismanagement, extreme operational failures and frequent scandals. Investigations by the 1980 Crude Oil Gross sales Tribunal discovered widespread irregularities that cost the government over $2 billion in revenue losses. The company was the topic of worldwide censure the same year when certainly one of its offshore wells was concerned in an oil spill that resulted within the deaths of 180 folks. Relations with international oil firms soured over disputes that noticed the incarceration of the then Nigerian minister of petroleum assets in 1990. The oil and fuel sector was understandably the main focus of reforms unveiled firstly of the new millennium, by which time the company’s frequently exposed malpractices precipitated it to be viewed with widespread widespread disdain. A sequence of layoffs ensued between 2003 and 2005 when several thousand employees have been let go. Round the same time, the NNPC enthusiastically started out several joint ventures in offshore drilling and gas manufacturing.

Regardless of its chequered past, the corporate has been answerable for significant achievements in Nigeria’s financial growth:

* NNPC oversaw the nation’s first equity stake in oil manufacturing with the Agip Oil Firm within the mid-60s to raised exploit assets for national improvement.
* It spearheaded oil exploration to affirm Nigeria’s place as the top crude exporter in Africa within the 1970s, boosting oil income from N200 million to N10 billion by way of the decade.
* In 2004, the NNPC unveiled plans to launch the formidable West African Gas Pipeline to produce Nigerian natural gasoline to a number of neighbouring international locations.
* Nigeria emerged as an vital exporter of pure gas with the institution of the liquefied natural fuel plant in Bonny in 2005 as a part of efforts to end gasoline flaring by the end of this yr.
* NNPC entered right into a $1 billion joint-venture within the offshore Agbami fields to extend nationwide crude manufacturing capacity by a further 250,000 barrels per day.
* By means of its current Okapi Power Plant, the NNPC will generate the first carbon credit in compliance with the Kyoto Protocol and associated UN resolutions.

Whereas the NNPC looks set to achieve extra important landmarks in the years ahead, its performance faces great pressures from both within and with out. The company’s future hinges on its means to identify and capitalise on new alternatives that are consistent with Nigeria’s plans for accelerated development. Its sphere of affect on virtually each side of growth bestows on it crucial significance within the context of Nigeria’s objectives for universal primary human rights. Though a lot authorities effort in recent times has been dedicated to reversing the country’s conventional dependence on non-renewables, the oil and gas business is predicted to grow exponentially over the subsequent few years. With oil accounting for eighty one% of present government revenue, the NNPC has a serious function to play in reversing a long time of economic stagnation and driving large entrepreneurial progress. Curious as it could appear, it’s oil income that funds Nigerian government initiatives to diversify the economic system and achieve fast enterprise revolution throughout non-oil sectors. With NNPC confident of enhancing recognized crude reserves from 36 billion barrels to 50 billion barrels by 2015, the sector assumes all the more importance.

Revamping the oil and gasoline business into an engine for job creation, poverty alleviation and speedy national progress needs to be one of the fundamental aims of the NNPC in coming years. Optimising its efficiency over the subsequent decade requires detailed evaluation of a number of issues:

* Enhancing entry to capital and technology and selling impartial control of joint-enterprise investments.
* Multiplying gas production and bettering transmission to both home and regional gasoline markets.
* Establishing strategic partnerships with world gasoline firms to secure presence in worldwide markets.
* Achieving manufacturing efficiency and selective progress to improve capacity in joint-venture operations.
* Rationalising the NNPC portfolio to make sure focus on excessive-growth potential belongings.
* Extending refineries and gas-based mostly industries to assist turn Nigeria into a regional hub for petroleum products.
* Decreasing operational constraints and manufacturing suspensions resulting out of vandalism and violence.
* Implementing further reforms in the oil and gasoline sector to improve transparency and boost investor confidence.

One of NNPC’s biggest challenges is offering a level-playing subject for investors in Nigeria, each current and new. In this connection, the proposed Petroleum Trade invoice and amendments to the country’s tax regime are expected to go a great distance in additional opening up the sector to foreign buyers.

Reforming the NNPC right into a commercially aggressive entity would require additional reforms, particularly to enhance inner regulatory authority and deter corruption. Political instability has obviously been one in every of the most important hurdles in the corporate’s performance, and Nigeria must guarantee its independence from partisan or bureaucratic interference. That NNPC has a important function to play in furthering Nigeria’s economic pursuits is with out question. What remains to be seen is how far it is able to deliver on this promise!