NNPC to review production-sharing contracts, joint ventures

The new head of the Nigerian National Petroleum Corp (NNPC) said on Sunday he will review all production-sharing contracts and joint venture agreements with its partners "to reflect current day realities in the global oil and gas industry".

Emmanuel Kachikwu, who was appointed two weeks ago to head the state oil company, which has been accused of corruption and mismanagement, said he would remit all crude oil proceeds due to the Nigerian government and plug all revenue leaks throughout the oil sector.

The NNPC works alongside local and international oil majors such as Shell, Exxon, Chevron as well as global oil traders, including Trafigura, Vitol and Glencore.

President Muhammadu Buhari appointed Kachikwu, a former Exxon Mobil executive, with a brief to restructure the NNPC, which has been accused of failing to account for tens of billions of dollars in recent years.

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.

The Nigerian arm of global corruption watchdog EITI welcomed Kachikwu's restructuring of the NNPC. It recommended reforms should also focus on ensuring accurate measurement of crude and a review of pricing for expired legal agreements with oil companies.

Other areas for reform are the huge costs of fuel subsidies, crude oil swap and product-exchange agreements, repair of refineries, oil theft, review of the existing fiscal regime and acquisition and assignments of oil blocks by discretion, NEITI said in a statement.

Kachikwu said he had started a three-pronged restructuring of the NNPC that should lead to "a new NNPC", which he expects to emerge over the next five to six months.

He has already dismissed all of the company's executive directors, other top layers of management and cut the divisions by half, to four.