Kachikwu: We Have Not Unbundled NNPC

Minister of state for petroleum resources, Dr Ibe Kachikwu, has clarified that, contrary to reports, the federal government has not unbundled the Nigerian National Petroleum Corporation (NNPC).

Speaking to State House correspondents after the Federal Executive Council meeting at the presidential villa, yesterday, Kachikwu said rather what the ministry has carried out is a reorganisation of the NNPC.

He said: “We have not unbundled NNPC. We had a press conference yesterday (Tuesday) where I explained this. What we have simply done is reorganisation. We have five business entities focused on business – Upstream, Downstream, Refineries, Gas and Power – that are there before.

“There is also Ventures that captures all our little companies that were not having proper stewardship. They are run by individuals who report to the group managing director (GMD).

“The NNPC is still a whole. There is nothing new that has happened. I have tried to explain this and I am sure the NNPC workers are members of the family; they will understand. We are going to have a meeting, and they will be made to understand. Perhaps the engagement has not been good enough.

“NNPC has not been unbundled in the sense of breaking up NNPC into distinct institutions. I am concerned; I don’t want the industry shutdown. I am sure we are going to resolve the issues very soon.”

However, LEADERSHIP recalls that Kachikwu, who had last week announced that a major unbundling of the NNPC would be announced this week, said during the briefing Tuesday that the final phase of restructuring of the NNPC had been approved by President Muhammadu Buhari, who is also the minister of petroleum resources.

He had listed the seven new entities to include the Upstream, Downstream, Refineries, Gas and Power, Ventures, Corporate Services and Finance and Accounts Divisions, all of which would have 20 subset companies.

The minister further listed the new chief executive officers (CEOs) of the new divisions to include Bello Rabiu, Upstream; Henry Ikem-Obih, Downstream; Anibor Kragha, Refineries; Saidu Mohammed, Gas and Power; Babatunde Adeniran, Ventures; Isiaka Abdulrazaq, Finance and Accounts, and Isa Inuwa, Corporate Services.

However, this move has generated controversies as the House of Representatives on Tuesday condemned it as not adhering to the constitutional due process.

Oil workers shut operations

Oil workers under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG) yesterday began a nationwide industrial action against the restructuring of the NNPC by the federal government.

The union leaders of the NNPC branch of PENGASSAN and NUPENG blocked the entrance of the corporation’s headquarters in Abuja, preventing workers from resuming at their duty posts and declaring that operations had been shut down nationwide.

The workers stated that they were not carried along in the entire process, hence their decision to down tools.

Sources within the unions told LEADERSHIP that the development is also expected to extend to other critical areas of the country’s petroleum sector, which include downstream and upstream operations.

The effects of the development are expected to further cause disruption in downstream operations and escalate the lingering fuel scarcity when the depots across the country are shut down by the protesting workers.

Already, distribution disruption caused by a strike embarked upon by Petroleum Tanker Drivers (PTD) and shortage of products occasioned by the NNPC being the sole importer of petroleum products at the moment have resulted in weeks of fuel queues in cities across the country.

Briefing journalists last night, branch chairpersons of NUPENG and PENGASSAN in Abuja said they had directed their members to proceed on indefinite strike nationwide starting from midnight of March 8.

The branch chairman of NUPENG, NNPC, Odudu Benjamin Udofia, said the government, in embarking on restructuring, disregarded the need for engagement with stakeholders in the corporation but took a unilateral action which was only made known to them through the minister’s public pronouncement.

“The whole process has been shrouded in secrecy for a long period without involving or carrying any of the stakeholders along. Due to lack of proper consultations, there are flaws in the final structure that could have been avoided.

“There are many labour-related issues that will arise as a result of the unbundling. These, among others, include both direct and indirect job losses; change in conditions of service that will affect existing staff welfare; and the new pension reform Act of 2014 is very clear on the independence of pension management; however, the new structure has it under the NNPC Venture,” Udofia said, adding that the unions demand a review of the restructuring.

Also speaking, the branch chair for PENGASSAN, Saleh Abdullahi, explained that the union was not against a restructuring of the NNPC but that it should be transparently done.

While disclosing that they only had one meeting with Kachikwu before he announced the restructuring exercise, Abdullahi stated that the union cannot stop government from going on with its adopted policy as long as they are carried along in the process.

Similarly, the acting general secretary of PENGASSAN, Lumumba Okugbawa, in a statement yesterday said the move by the government was a policy flip-flop.

Okugbawa explained that the unbundling plan will stave off investors from the nation’s oil and gas industry at this time when the nation needs foreign investment to grow the industry.

He added that the government did not take into consideration the existing law that established the NNPC before planning to unbundle the corporation.

“For the government to do anything with the current NNPC, the Act must either be repealed or amended to accommodate the planned restructuring. If not done, it will be equal to lack of respect for the rule of law on the part of the government,” he said.

NASS kicks against policy

Senate yesterday summoned Ibe Kachikwu over the reported unbundling of Nigerian National Petroleum Corporation (NNPC) as they expressed shock at the decision of the minister.

Besides, the deputy chairman of the House of Representatives Committee on Petroleum Resources, Upstream, Hon. Mark Gbillah, has also condemned in strong terms the decision of the minister.

Senate summons petroleum minister

Speaking on the development, Senate Leader Ali Ndume said that Senate had invited the management of the NNPC to come and brief the Senate on the development, though he did not give actual date.

However, the GMD of NNPC is expected to appear before the Joint Committee of Senate on Upstream, Downstream and Gas today.

A letter signed by Senate Committee chairman on Petroleum, Downstream, Senator Tayo Alasoadura, said members of the committee were shocked by the announcement and in disbelief and wanted the minister to come and explain himself today.

“Three committees overseeing the industry wish to invite minister to appear before them to brief them of this critical decision in a meeting schedule Thursday 10, March,” he said.

Hon. Gbillah lamented that the country may be on a regressive path with the Presidency’s disregard for the role of the parliament.

“This decision to unbundle NNPC without recourse to law, is unfortunate, and I hope that we are not being retrogressive in this our change agenda? The question is, did the president liaise with the Attorney General of the Federation (AGF) and the National Assembly to see to the legality of the unbundling?

“My opinion is that the minister should stop disregarding other stakeholders in the oil and gas industry. He the minister appears arrogant and conceited and he has to desist from that.

“We are against this decision to unbundle without recourse to the people who are represented by the National Assembly.

“It is important to note that before you unbundle an entity established by law, you need to automatically refer to the National Assembly, because those unbundled units will be funded by the National Assembly. So no matter how laudable an idea is, it must follow due process,” he said.