Typically the Nigerian National Petroleum Corporation NNPC

Typically the Nigerian National Petroleum Corporation (NNPC) announced in October last year that this much-anticipated Okpai Power Plant in Delta State, the largest gas-power initiative within the African continent, is on the edge of becoming operational. The two phases from the project that would together generate just one, 000 MW of electricity on completion is being implemented under the Clean Development Mechanism Protocol of the ESTE Framework Convention on Climate Adjust. The rare achievement, which signifies a significant milestone in the country's infrastructure development, reconfirms NNPC's position for a principal driving force behind the Nigerian economy.

The state-owned NNPC offers fuel to industrial facilities, commercial companies and individuals, with operations that concentrate in making the extended spectrum of the Nigerian petroleum industry. An extensive brief duties it with all aspects of production, service and marketing, besides training individuals, managing oil leases, encouraging indigenous participation, ensuring uniform pricing in local markets and exploring sibling industries, among other things. With sales totalling $2. 6 billion in 2006, it is a major revenue earner for the government that additionally provides work to over 15, 000 people. You can actually history goes back to 1971, when the Nigerian National Oil Corporation (NNOC) was created after the country signed to be a member of the OPEC.

Six years into its existence the company has been renamed to its present character, while the government went on to decentralise it into nine subsidiaries in 1981. Over the next two decades, the particular NNPC significantly augmented its coopration in multiple oil ventures amid sustained attempts to make it a fiscally autonomous and commercially integrated entity. However, even as foreign oil corporations clamoured to invest in Nigeria, the NNPC faced severe challenges due to personal instability, inept governance and massive file corruption error.

The evolution of NNPC in present day is also a story of serious mismanagement, severe operational failures plus frequent scandals. Investigations by the 1980 Crude Oil Sales Tribunal found common irregularities that cost the government more than $2 billion in revenue failures. The company was the subject of international censure the same year when the offshore wells was involved in an necessary oil spill that resulted in the deaths of 180 people. Relations using international oil companies soured over disputes that saw the incarceration of the then Nigerian minister involving petroleum resources in 1990. The oil and gas sector was understandably the focus of reforms unveiled at the beginning of the newest millennium, by which time the company's regularly exposed malpractices caused it to be viewed using widespread popular disdain. A series of layoffs ensued between 2003 and june 2006 when several thousand employees were let go. Around the same time, the NNPC enthusiastically started out several joint ventures within offshore drilling and gas development.

Despite its chequered past, the corporation has been responsible for significant achievements throughout Nigeria's economic development:


 * NNPC oversaw the country's first equity stake in oil production considering the Agip Oil Company in the mid-60s to better exploit resources for national enhancement.


 * It spearheaded oil search to confirm Nigeria's position as the best crude exporter in Africa in the early 1970s, boosting oil revenue from N200 million to N10 billion from the decade.


 * In 2004, the NNPC unveiled plans to launch the particular ambitious West African Gas Pipe to supply Nigerian natural gas to several adjoining countries.


 * Nigeria emerged as an important exporter of natural gas along with the establishment of the liquefied natural gas place in Bonny in 2005 included in efforts to end gas flaring by the end of this year.


 * NNPC entered into a $1 billion joint-venture in the offshore Agbami fields to increase national crude production capacity by a further two hundred and fifty, 000 barrels per day.


 * By way of its recent Okapi Power Plant, the particular NNPC will generate the first co2 credit in compliance with the Kyoto Protocol and related UN promises.

While the NNPC looks set to accomplish more significant landmarks in the years ahead, its performance faces tremendous pressures from both within and without. The company's future hinges on its ability to determine and capitalise on new possibilities that are in line with Nigeria's plans for accelerated development. Its sphere involving influence on almost every aspect of progress bestows on it critical significance within the context of Nigeria's goals for universal basic human rights. Even though much government effort in recent years may be devoted to reversing the country's conventional dependence on non-renewables, the oil and gas business is predicted to grow exponentially over the next few years. With oil accounting regarding 81% of present government income, the NNPC has a major role to learn in reversing decades of financial stagnation and driving massive gumptiouspioneering, up-and-coming growth. Curious as it may seem, it really is oil revenue that funds Nigerian government initiatives to diversify the economy and achieve rapid enterprise innovation across non-oil sectors. With NNPC confident of improving known raw reserves from 36 billion barrels to 50 billion barrels simply by 2015, the sector assumes all the more importance.

Revamping the oil and gas business into an engine for job development, poverty alleviation and rapid nationwide growth has to be one of the fundamental objectives of the NNPC in coming decades. Optimising its performance over the up coming decade calls for detailed review of a few considerations:


 * Enhancing access to money and technology and promoting independent control of joint-venture investments.


 * Growing gas production and improving tranny to both domestic and regional gas markets.


 * Establishing ideal partnerships with global gas organizations to secure presence in international markets.


 * Achieving production efficiency in addition to selective growth to improve capacity within joint-venture operations.


 * Rationalising the NNPC portfolio to ensure focus on high-growth potential assets.


 * Extending refineries and gas-based industries to help go Nigeria into a regional hub designed for petroleum products.


 * Reducing functional constraints and production suspensions IT support companies generating out of vandalism and violence.

5. Implementing further reforms in the oil and gas sector to improve transparency and improve investor confidence.

One of NNPC's biggest challenges is providing a level-playing industry for investors in Nigeria, both equally existing and new. In this network, the proposed Petroleum Industry bill and amendments to the country's duty regime are expected to go a long way within further opening up the sector to be able to foreign investors.

Reforming the NNPC into a commercially aggressive entity will require further reforms, especially to improve inside regulatory authority and deter file corruption error. Political instability has obviously been one of the major hurdles in the company's performance, and Nigeria must ensure its independence from partisan or bureaucratic interference. That NNPC has a critical position to play in furthering Nigeria's economic interests is without question. What is unclear is how far it is able to deliver within this promise!