21 March 2018

Nigeria: NNPC to Right-Size, Not Fire Workforce When PIGB Becomes Law - Baru

Abuja — The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, has disclosed that the NNPC has started to prepare for the implementation of the Petroleum Industry Governance Bill (PIGB) when it is finally signed into a law and its operations reformed, adding that the transformation process will lead to the right-sizing of its personnel but not job losses.

Baru made the disclosure Tuesday at the symposium on the PIGB organised by the Nigeria Extractive Industries Transparency Initiative (NEITI) in Abuja.

Baru, who was represented at the symposium by the Group General Manager, Corporate Planning of the corporation, Mr. Bala Wunti, explained that the NNPC has initiated a new policy that involves reforming its people, processes, procedures, productivity and profit drive to fit into the demands of the post-PIGB era when it will be expected to transform into a commercial entity with key performance indicators given to it by its shareholders.

According to the GMD, NNPC would right-size its workforce to fit into the various businesses it would be involved in across the entire value chain of the industry, instead of downsizing and firing them.

He said the corporation has recognised that it would need to survive in the post-PIGB era without government subventions, hence the need to ensure that all its staff are productively engaged in the various aspects of its operations.

Also speaking at the event, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, indicated that the award of new oil acreages in Nigeria's oil and gas industry would be done by the federal government under new laws and terms expected in the country soon.

Although he did not state specifically if this would apply to the proposed bid rounds for marginal oil fields, which the government has planned for years but is yet to conduct, he explained that the new laws and terms would also apply to offshore fields, which he said were expected to account for a high proportion of Nigeria's oil reserves and revenue.

Represented by one of his Senior Technical Advisers, Mr. Johnson Awoyemi, at the NEITI forum, Kachikwu explained that the existing laws governing operations in Nigeria's oil and gas industry were archaic and needed to be overhauled.

He lauded the National Assembly for taking its time to legislate on the PIGB, an offshoot of the omnibus PIB, saying it will provide the standards for the governance framework for the industry.

The minister noted that while the government was delighted with the possibilities of the PIGB becoming a law soon, having been passed by the Senate and House of Representatives and was now being harmonised in the legislature for presidential assent, it wants other aspects of the PIB, especially the fiscal terms, to be considered by the National Assembly quickly to restore viability to the country's oil sector.

"It's a national priority to have certainty and clarity over the operations of the petroleum industry as it will foster more licensing rounds, enhance revenues and increased economic activities.

"New acreages will be awarded for exploration and production under new laws and terms, especially offshore, which is likely to account for much of the growth in the nation's reserves," Kachikwu said.

Continuing, he stated: "For too long we have waited for this moment with bated breath and sheer excitement, knowing that the bill will disentangle us from the manacles of inefficiency, low investment drive and opacity.

"There were some complaints of shrinkage of some agencies in the bill and there is need to consider the concept of the ability to stand alone versus efficiency of service delivery.

"We must relish the urgency of this moment as all hands must be on deck to making sure that the bill achieves what it is meant to achieve. Getting to the yes on the PIGB is a great milestone, I am so glad we have begun heeding the clarion call."

On the urgency he said was needed to get the three aspects of the PIB on governance, the host community fund and the fiscal regime passed, the minister explained: "The aggregation of industry laws which have governed the oil and gas sector over the years has become archaic and no longer competitive and need to be reviewed and harmonised into a comprehensive law.

"However, it is still not yet Uhuru as the fiscal aspect of the bill which will address the revenue inflow to both the state and investors is still in the offing."

In his opening remarks, the Executive Secretary of NEITI, Mr. Waziri Adio, explained that Nigerians have reached a consensus that the country's oil sector is poorly governed and needs to be reformed for optimum benefit.

He added that the process of getting the industry reformed through new laws has taken too long and that the PIGB is the closest the country has come to passing a new reform law for the sector.

Adio called on stakeholders to stay focused on getting the PIGB and other bills passed into law in the country, as well as making them work for the country.

"Now that we are hopefully close to the end of this circuitous journey, it is important for us to focus on the next task in a way that will proactively and strategically ensure the intention of the proposed laws are fully realised, to ensure that we have not undertaken the long journey in vain. That is why the NEITI as a stakeholder has convened this meeting," Adio stated.

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