Nigeria's new oil chief announces restructuring, audit - CNBC Africa

Nigeria's new oil chief announces restructuring, audit

Western Africa

by Reuters 0

Nigeria's new oil chief announces restructuring, audit. PHOTO: RISK.NET

The new head of the Nigerian National Petroleum Corp said on Thursday that he had started a three-pronged restructuring of the state-owned company that should lead to "a new NNPC".

President Muhammadu Buhari appointed Emmanuel Kachikwu last week with a brief to root out corruption and mismanagement at the NNPC, which has been accused of failing to account for tens of billions of dollars in recent years.

(READ MORE: Buhari advised to overhaul Nigerian oil sector, increase debt)

The former Exxon Mobil executive has already dismissed all of the company's executive directors and other top layers of management.

"There's a people aspect which we are dealing with now," he said after a meeting with Buhari. "After the people at the right places, we are going to get a forensic audit done ... that will cover us all the way to 2014, 2015."

In the final stage, the NNPC will review all existing contracts, including production sharing contracts with independent oil companies, and analyse the plunge in crude oil prices to improve revenue for the government.

"Over the next five-six months, you will begin (to) see emerging a new NNPC," Kachikwu said.

The NNPC has not been publishing annual reports and its bookkeeping has been criticised as opaque, which appears to have allowed billions of dollars to disappear.

It is supposed to remit all revenues to the country's treasury but is allowed to keep what it needs to cover costs with little oversight. The result is a legal grey area that has been open for abuse for decades.

(READ MORENigerian lawyer sent in to clean up state oil giant)

The president on Sunday ordered ministries including the NNPC to use only approved government bank accounts to make payments, as part of efforts to improve transparency and clamp down on corruption.

"The reality is that to run an oil company, you've got to have funds to do it. If you don't, you close down the corporation and the production system will close down," he told reporters in the capital Abuja.

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