The Nigerian National Petroleum Company will be transformed from an impenetrable bureaucratic giant into a real privately run company when restructuring is completed next year, says Nigeria's President Umaru Yar'Adua, the AFP reported.
After taking office a year ago, Yar'Adua decided to break up the 30 year-old NNPC into five separate new companies, but he has since been heading a committee whose proposals for a new structure are expected in a couple of weeks.
Nigeria is the world's eighth largest oil producer with 2.1 million barrels per day capacity, and oil is its chief foreign currency earner.
But years of political interference, embezzlement, bureaucracy and incompetence earned the NNPC a reputation as a mere milch cow for a succession of corrupt Nigerian regimes raiding its resources on a massive scale.
Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF), said here in February that Nigeria had been wasting its oil riches for the past 30 years.
The presidential committee on oil and natural gas industry reforms was expected to submit a report to the National Assembly recommending changes to NNPC's juridical and legal framework, Yar'Adua told AFP.
The reforms had been long been expected and the parliamentary process would take time in view of the NNPC 's vital role in the nation's economy, he said.
It would perhaps be the end of next year before the law was changed, new legislation came into force and the restructured company took off, said the president.
"The plan is to restructure or reposition the NNPC to become a truly national oil company that will go and compete and operate like other international oil companies with the capacity to use its assets, get credit from the market and become an international operator in the sector independent of government," said Yar'Adua.
"It will act purely as a private sector company and this will relieve the national budget of joint venture cash calls," he added in a reference to funds that the state has had to inject every year into joint ventures with multinationals such as Shell, Chevron, Exxon Mobil and Total.
"This year, NNPC requires about 8.3 billion dollars (5.3 billion euros) for its joint venture cash calls and out of this, 4.9 billion dollars is coming from the national budget, and for the first time, we asked the NNPC to go to the capital market to raise the balance," he explained.
In an interview with AFP in March, Energy Minister Odein Ajumogobia acknowledged that there were difficulties in relations with foreign companies. But he gave an assurance that the Nigerian government would respect its 2008 financial commitments in joint ventures with multinationals and would challenge only agreements on revenue-sharing.
Ajumogobia also noted that up to now the mechanism for financing prospecting and production operations had depended on the figure allocated in the state budget, often too late.
This year for the first time the NNPC was authorised to seek finance to meet its commitments, he said.
Shell recently concluded financing and loan agreements and Total is negotiating similar accords.
Yar'Adua chalked up a landslide victory in last year's presidential poll and promised to fight corruption, a major issue in the country.