Petroleum Exploration And Growth In Nigeria
The goal of this chapter is to review the work of past students relevant to the realm of examine. However for the purpose of dairy, the literature can be reviewed alongside the following:
– Historical past of Nigerian National Petroleum Corporation (NNPC)
– Birth of NNPC
– Petroleum exploration and growth in Nigeria
latest crude oil price mcx – The event of Nigeria’s oil trade
– The NNPC oil sector: Politics and technocracy
– historical past and nature of pipeline and product marketing company (PPMC)
– Oputa Panel inquiring of 1975
– Goal of the pipeline interlink project
– Impression of the interlink on the merchandise distribution and marketing business in Nigeria
– Authorities policy of 1994
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Historical past OF NIGERIAN National PETROLEUM Corporation (NNPC)
The Nigerian government established the Nigerian National Oil Company (NNPC). The NNPC was conferred with the powers to amass any asset and liability in the present oil corporations in Nigeria, and to take part in all the phases of the petroleum business.
The NNPC operated facet by facet with the ministry of petroleum assets until April 1977 when the 2 companies grew to become merged to type the Nigerian Nationwide Petroleum Company (NNPC). The Decree No 18 of 1981 established the NNPC repealed the NNOC Decree and dissolved the ministry of petroleum sources. Thus the NNPC as a result of the national oil entity charged with the only real responsibility for upstream and downstream development as well as regulating and supervising the petroleum business.
In 1985, the NNPC was restructured giving rise to five semi-autonomous sectors. These sectors consists of oil and fuel refineries, petrolchemicals, pipelines and merchandise marketing and petroleum inspectorate. The commercialization of NNPC in 1988 resulted within the creation of twelve subsidiaries. A thirteenth subsidiary, the Nationwide Petroleum investment administration service (NAPIMS) has been added. The NAPIMS is the subsidiary that oversees the governments funding in joint enterprise arrangements. Additionally, it’s concerned in direct exposition activities.
The other 12 subsidiaries of NNPC are:
– Nigerian Petroleum Improvement Company Restricted (NNPC)
It is wholly owned by NNPC and is involved in exploration and production of crude oil and gasoline.
– Integrated Information Services Company Restricted (IDSCL): It is wholly owned by NNPC and is engaged in seismic data acquisition, processing interpretation, petroleum reservoir engineering information analysis, computer and other ancillary companies, in Nigeria and Africa eg Ghana.
– Worri Refinery and Petrochemicals Firm Restricted (WARPC): It is wholly owned by NNPC and is engaged within the processing of crude oil into finished petroleum and petrochemical merchandise for home consumption and export. Its amenities are situated at Warri and Ekpan Warri refinery’s installed capacity is 125,000 barrels per day.
– Kaduna Refinery and Petro-chemical Company Limited (KRPC): It processes crude oil into refinery merchandise and manufactures linear Alkyi Benzene (LAB) and tins and drums for home consumption and export. Its amenities are at Kaduna. It is wholly owned by NNPC and its refinery’s put in capacity is one hundred fifty,000 barrels a day.
– Nigeria LNG Company Limited (NLNG): It’s a joint enterprise between NNPC and three other main oil and gasoline producing companies in Nigeria, Shell, ELF and AGIP, and the international finance corporation. It is engaged within the implementation of a liquefied natural fuel venture. Firm commitments have been obtained from patrons in W. Europe and USA for Nigeria’s LNG; first shipment of liquefied pure gasoline took place in Cate 1999.
– Hyson Nigeria Limited in Affiliation with Calson (Bermuda ) Restricted (Hyson-calson): It’s a joint venture between NNPC and chevron. It is engaged in petroleum products advertising and marketing in West Africa and beyond. It’s one other supply for Nigeria crude oil sale.
– Port-Harcourt Refinery Company Restricted (PHRC): It’s engaged in petroleum refinery, especially of specialised petroleum product its amenities are at port-Harcourt and it has an put in capacity of 60000 barrels per day.
– Pipelines and Products Advertising and marketing Company Limited (PPMC): It transports crud oil to the refineries and moved white petroleum merchandise to the markets by way of a network of pipelines and depots.
– Nigeria Gasoline Company Restricted (NGC): The corporate engages within the gathering, treatment, transmission and advertising of Nigeria natural gas and its by products to main industrial and utility gasoline distribution companies in Nigeria and neighbouring countries, by pipeline and other distribution methods. Eg NEPA and NBL.
– ELEME Petro-chemicals Firm Restricted (EPCL): It is a joint enterprise between NNPC and some private companies. It manufactures petro-chemical products and markets them here in Nigeria and overseas. Its amenities are at Eleme, and it has an installed capability of 150000 barrels per day.
– Nationwide Engineering and Technical Firm (NETCO): It’s a joint enterprise between NNPC and Beclitel, the US engineering and building agency. The corporate producers engineering companies for NNPC’S operations.
– NNPC intends to be main participant in the worldwide petroleum enterprise, especially in down-stream activities abroad, thus it intends to set up a global buying and selling and advertising firm.
Start OF NNPC
With time, the role of government in the oil business steadily progressed from regulatory to direct involvement in oil exploration and exploitation. Government’s preliminary curiosity was primarily in the gathering of royalties and different dues from the oil corporations, and in the making of statutory laws that regulated the activities of the oil business. This place was on account of the numerous contribution of oil to the economy earlier than the later sixties and the absence of domestically educated personnel and expertise.
By 1971, a 12 months after the Nigeria civil battle, oil had become very important to the economic system. To strengthen and established government management in the business. The Nigerian Nationwide Oil Corporation (NNOC) was established by decree in 1971, as an integrated oil firm. It was also in that 12 months that Nigeria joined the organization of petroleum exporting nations (OPEC) as the 11th member nation. The NNOC had accountability for each upstream and down stream actions in the business.
It was believed that if authorities had more say within the operating of the oil business, it could obtain its aim of speedy industrial and business growth of the nation. And today, government participation stands at 55 p.c in shell and 60 p.c in chevron, Mobil, Agip, Texaco and Pan Ocean.
Nevertheless, on April 6, 1977, a merger between the NNOC and the ministry of petroleum sources created the Nigerian National Petroleum Company (NNPC). NNPC mixed the business capabilities of the previous NNOC with the regulatory capabilities of the previous ministry of petroleum assets.
PETROLEUM EXPLORATION AND Development IN NIGERIA
Petroleum manufacturing and export performs a dominant role within the nations economy for about ninety p.c of the gross export earnings. This dominant position has pushed agriculture, the normal ministry of the economic system from the early fifties and sixties to the background.
Growth OF NIGERIA OIL Trade
The advent of the oil trade will be traced again to 1908, when a German company the Nigerian Bitumen Company commenced exploration activities efforts in the Araroni Area, West of Nigeria. These pioneering efforts ended abruptly with the outbreak of the first world war in 1914.
Oil prospecting efforts resumed in 1973, when shell D’Arcy (the forerunner of shell petroleum Development Comprising of Nigeria ) was awarded the only concessionary rights masking the entire territory of Nigeria. Their activities had been also interrupted by the Second World Warfare, however resumed in 1947. concerted efforts after a number of years and on funding of over N30 million, led to the first business discovering in 1956 at Oloibiri in the Niger Delta.
This discovery, opened up the oil business in 1961, bringing in mobil, Agip, safrap (Now Eif ), Tenneco and Amoseas (now Texaco/chevron) to hitch the exploration efforts each in the onshore and offshore areas of Nigeria. This development was enhanced by the extension of the concessionary rights beforehand a nonopoly of shell, to the newcomers. The target of the government in doing this was to accelerate the pace of exploration and manufacturing of petroleum.
Actual oil manufacturing and export from the daibiri discipline commenced in 1958 with an preliminary manufacturing charge of 5,one hundred barrels of crude oil per day. Subsequently, the amount doubled the following 12 months and progressively rose to 2.0 million barrels per day in 1972 and a peak of two.Four million barrels per day in 1979. Nigeria thereafter, attained the status of a serious oil producers, raking seventh on the planet in 1972, and has since grown to turn into the sixth largest oil producing nation on this planet.
2.5 STRUCTURAL Growth OF THE NNPC
To successfully function as a world class corporation, NNPC was decentralized in 1985, into five semi-autonomous sectors every headed by a sector co-ordinator. The five sectors have been oil and fuel, refineries, petroleum, pipelines and merchandise advertising and petroleum inspectorate. The petroleum inspectorate which had been an integral arm of the NNPC has been transferred to the ministry of petroleum resources but nonetheless performs its regulatory capabilities.
As we speak, the NNPC contains of six directorates, and eleven subsidiary corporations charged with the execution of the corporation enterprise. The new NNPC group is headed by a bunch managing director and has six group government instantly accountable for corporate companies, exploration and manufacturing, refining and petro-chemical, engineering and technical, business and investments and finance and accounts.
THE NNPC OIL SECTOR: POLITICS AND TECHNOCRACY
Nigeria it is well-known depends upon oil for survival. And the Nigerian National Petroleum Company (NNPC) is the general public company chargeable for both co-ordinating the activities of he oil trade and managing the oil business on behalf of the Nigeria nation the performance of this company in crucial, not just for the oil industry, but also for the nation as a whole. Therefore, one acid take a look at of effective government coverage is the rightness or otherwise of its policy in direction of the NNPC.
If a authorities has coverage which by and large stimulates NNPC into efficient performance by way of creating the enabling environment, then the nation will take pleasure in the benefits of a virile oil economy. Alternatively, a authorities can deliberately or not create an environment that discourages efficient performance.
Development since the late 1980’s especially the persistent shortages of petroleum merchandise suggest that the company has not been at its greatest. And if I am proper I the view that the government of the day creates the context enabling setting for optimum performance of the company in the context of its relation with succeeding governments.
Decree No 33 of 1979 which set up the company reserved for the federal government through minister and ministry a supervising and regulative features over the NNPC. The actual administration of the company in daily operation is given to the NNPC board and administration.
And the good cause for that is to challenge the corporation from each the less performance – oriented enterprise-cratic tradition of the civil service and over-all political influence. The presumption is that an surroundings of relative autonomy from pink tape and politicization will enable benefit, efficiency and economic rationality to information the day to-day operations of the company. That decrees was clear in stating that the managing director is the chief executive of the company.
This lovely organizational world created by the decree was, I might say, respected for some time and whereas that respect lasted, the corporation by and huge, carried out creditably. Then, abruptly all issues started altering.
Two developments all traceable to the changing context of political power, paved the best way for altering the rule-governed relationship between authorities and the company. One of those developments happened within the Buhari Wiagbon era when the federal government allowed the minister to turn into the Chief government of the corporation. This was, experts have identified, contrary to the legislation that arrange the NNPC, but it surely was allowed with out bothering to amend the decree accordingly. And naturally subsequent ministers have tended to take advantage of exploiting it by indulging themselves within the NNPC.
All forms of political influence in undated the company since the ministers now and are inclined to themselves as both the political boss and the chief executive of the corporation. The line between supervision and everyday administration was initiated as a few of the ministers freely governed the company with their preferences, biases, pursuits and politics.
Since the decree was not amended the regulation still in favour of the companies management workers and technocrats. One logical thing to anticipate was for there technocrats and highly gifted experts and professionals in the company to resist occasional ministerial high handedness. But these did pay clearly for it. And this is where the second development became relevant.
This second improvement is the erosion of the old public service culture and the safety it afforded public officers. Beneath that culture, the public service fee ensured that any public officer was given a fair hearing before discipline him or her. The Muhammed Obasanjo regime weakened the oil public service safety programs by making a system which permitted public servants to be summarily dismissed without even a hearing. Beneath this new dispensation. Public servants who asked uncomfortable query or had the moral courage to resist ministerial or political indiscretions had been summarily handled.
In different phrases when you made the minister the chief govt and removed the safety system which enabled some public servants to examine the indiscretions of succeeding political executives, you exposed the company to unbridled political take over.
The primary group of technocrats, who fell to the axe of the political men are the founding fathers of the company, latest crude oil price mcx who had the moral courage to talk out. You remember the Festus Marihnos, the Sam Akpes, the Cufegis and the Aolomaris. And then in fact the Artwork Adams to mention the most conspicuous ones.
The companies good record of efficiency in response to set standards, the excellent procedures for recruitment and promotion, and even the company solidarity amongst the technocrats in warring off political interference gave strategy to the ministers interest and sensibilities. Employees may now be moved up or down not on the premise of their efficiency however due to the preferences of the minister or some political heavy weight on the presidency.
One minister, for instances, launched quots recruitment which made state of origin somewhat than advantage and performance basis for recruitment.
One other minister allegedly moved one of many his favoured boys up from deputy manager of admission of a subsidiary to the group executive directorship place. latest crude oil price mcx This means that in solely four years the favoured gentleman jumped from deputy manager to manager, to basic manger and the group executive director all as a result of he was the good books of a specific minister.
This form of state of affairs tended to demoralize the work force, scale back diligence and commitment and introduce. Sycophancy as a survival technique.
You often cannot have quality efficiency when politics take over. Undue politicization of NNPC resulted in displacement of merit, decline in productiveness and down grading of discipline. The tradition and ethos of the firms tended to turn out to be one of many apathy and sycophancy.
All of this resulted in a sure privatization of NNPC/ do not imply here the typical/privatization. Moderately I imply the process by which non-company official tried to make use of the company to presented their self interested personal Egenela. In view of this, I would agree that the way out of this impasse is to go forward with the proposed commercialization of the actions key parastatal as a way to free it from the constructing influence of political interventional.
HISTROY AND NATURE OF PIPELINE AND PRODUCT Advertising and marketing Company (PPMC)
—This article is just not complete———-This text shouldn’t be complete————
This article was extracted from a Challenge Research Work/Material Subject
“FUEL DISTRIBUTION IN NIGERIA: Problems AND Options
(A CASE Study OF NNPC ENUGU DEPOT).”
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