The NNPC is an acronym for the Nigerian National Petroleum Corporation. This is the corporation in charge of the Nation’s oil industry and through which the federal government governs the activities of the country’s petroleum industry. The corporation is in charge of exploration activities and is also given powers to operate in the refining industry, petrochemicals, and transportation of products and marketing. The Corporation also manages all joint businesses between the Nigerian federal government and other foreign multinational corporations, which include Royal Dutch Shell, Agip, ExxonMobil, Total S.A, Chevron, and Texaco (now merged with Chevron). These collaborations enable the government to conduct petroleum exploration and production. The Nigerian National Petroleum Corporation was established as a merger of the Nigerian National Oil Corporation and the Federal Ministry of Mines and Steel on the 1st of April, 1977. Between the years 1978 and 1989, the corporation had constructed refineries in Warri, Port Harcourt, and Kaduna. NNPC also took over the 35,000-barrel Shell Refinery established in Port Harcourt in 1965.
Functions of NNPC
NNPC was created for the purpose of adding value to the nation’s hydrocarbon resources for the benefit of the nation’s economy and other stakeholders.
The functions of the NNPC include:
- To oversee the development of the oil sector in the production process
- To determine and fix the price of products
- To ensure a regular supply of products
- To govern all activities in the oil production industry
- To supervise all operations of the Gas production industry
- Management of all joint activities between the Nigerian Federal government and foreign corporations
- Undertake research in the oil sector
- In charge of renewable energy
- The NNPC handles business information such as investment opportunities and profits
- Serves as a consultancy firm to the Nigerian government and other related industries in issues concerning oil and gas
- In charge of the refining sector
- In charge of engineering and technology divisions
- Engaging in activities to support the development of the local economies in all areas in which the operator operates.
- NNPC has sole responsibility for upstream and downstream developments
- NNPC is charged with regulating and supervising the oil industry on behalf of the Nigerian Government
Divisions and Units of the NNPC
In 1988, the NNPC was distributed into strategic Business Units and Corporate Services Units which covered the entire operations of the oil industry and were situated in diverse locations across the country. These include Gas development, petrochemicals, exploration and production, refining, distribution, engineering, gas development, and commercial investments.
These Business Units are
- Nigerian Petroleum Development Company (NPDC)
- Nigerian Gas Company (NGC)
- Pipelines and Products Marketing Company (PPMC)
- Integrated Data Services Limited (IDSL)
- National Engineering and Technical Company Limited (NETCO)
- Hydrocarbon Services Nigeria Limited (HYSON)
- Warri Refining and Petrochemical Company Limited (WRPC)
- Kaduna Refining and Petrochemical Company Limited (KRPC)
- Port Harcourt Refining Company Limited (PHRC)
- NNPC Retail Limited
- Duke Oil
In 2016,changes were made to promote the corporation as a global energy company, therefore the Pipelines and Products Marketing Company (PPMC) and the Nigerian Gas Company (NGC) were restructured to create the following new units:
- Nigerian Gas and Marketing Company (NGMC)
- Nigerian Gas Processing and Transmission Company (NGPTC)
- Gas and Power Investment Company (GPIC)
- Nigerian Products and Marketing Company (NPMC)
- Nigerian Pipelines and Storage Company (NPSC)
This division also fostered employment and made the NNPC initiate a recruitment process on a yearly basis.
Organization/ Structure of the NNPC
The NNPC Group comprises the NNPC Board, the Group managing director’s office and seven operational units which are listed below. Each of these units has their heads as the chief operating officer (COO), the Divisions are headed by Group General Managers (GGM) while the subsidiary companies are headed by Managing Directors.
NNPC has several subsidiaries which include the Nigerian Petroleum Development Company (NPDC), two partly owned subsidiaries and 16 associated companies.
Autonomous Business Units:
- Upstream Company
- Downstream Company
- Refining Company
- Ventures Company
- Gas & Power Company
Corporate Services Units:
- Finance and Accounts
- Corporate Services
Controversies and Corporate Social Responsibility Associated with the NNPC
The Nigerian National Petroleum operation has many times over the years been accused of corruption, mismanagement of funds and heavy fraud.
In 2011, KPMG, a Nigerian Audit firm detailed the NNPC’s sharp practices, illegal deduction of funds and failure to account for several billion that ought to have been remitted to the federal government. Several foreign companies such as Wilbros Group Inc and ABB Vetco Gray have admitted to paying bribes in millions of dollars to NNPC officials so as to earn good recommendations. This is asides the accusation of unremitted funds of over $49.8 billion levied against the corporation by the Central Bank of Nigeria in 2013. It is reported that no one has been punished for these allegations and the sums are still unaccounted for.
NNPC, however, prides itself on being a socially responsible organization. It, therefore, makes sure to deliver its Corporate Social Responsibilities guided by social, environmental and safety standards. The aim of this Corporate Social Responsibility is to improve the well being of communities in Nigeria via the provision of sustainable projects such as Health, Education, Corporate philanthropy, water sanitization, and hygiene, infrastructure development, Sports/Arts, Charitable/Professional donations, Economic empowerment, and capacity building, etc.
In order to ensure that stakeholders and host communities where operations of the NNPC are carried out derive maximum benefits from the Corporate Social Responsibility Projects and programs, the NNPC employs a number of strategies, such as :
Stakeholder’s Engagement: This involves a participatory partnership between all stakeholders in the communities for the identification and development of Sustainable Community Development (SCD) projects.
Global Memorandum of Understanding: This serves as a means of regulating and holding oil companies and stakeholders accountable.
Monitoring and evaluation of projects: To ensure they are executed in line with agreed project scope and budget and with quality and value of money spent.
Impact Assessment Survey: This has to do with making sure completed projects and programs are functional and beneficiaries derive the intended benefits from them.
The NNPC has its headquarters in Abuja. This complex is located on Herbert Macaulay Way, Central Business District Abuja with four zonal offices in Lagos, Kaduna, Port Harcourt and Warri and an international office in London, United Kingdom.