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Performance Evaluation Of Nnpc (1999-2015) Using Regression Analysis Techniques
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CHAPTER ONE
INTRODUCTION
Background of the study
The Nigerian
national petroleum corporation (NNPC) was established on April 1, 1977
as a merger of the Nigerian National Oil Corporation and the Federal
Ministry of Mines and Steel. NNPC by law manages the joint venture
between the Nigerian federal government and a number of foreign
multinational corporations, which include Royal Dutch Shell, Agip,
ExxonMobil, Chevron, and Texaco (now merged with Chevron). Through
collaboration with these companies, the Nigerian government conducts
petroleum exploration and production. The NNPC Towers in Abuja is the
headquarters of NNPC Consisting of four identical towers. NNPC also has
zonal offices in Lagos, Kaduna, Port Harcourt and Warri. It has an
international office located in London, United Kingdom.
In addition
to its exploration activities, the Corporation was given powers and
operational interests in refining, petrochemicals and products
transportation as well as marketing. Between 1978 and 1989, NNPC
constructed refineries in Warri, Kaduna and Port Harcourt and took over
the 35,000-barrel Shell Refinery established in Port Harcourt in 1965.
In
1988, the NNPC was commercialized into 12 strategic business units,
covering the entire spectrum of oil industry operations: exploration and
production, gas development, refining, distribution, petrochemicals,
engineering, and commercial investments. Currently, the subsidiary
companies include:
National Petroleum Investment Management Services (NAPIMS)
Nigerian Petroleum Development Company (NPDC)
The Nigerian Gas Company (NGC)
The Products and Pipelines Marketing Company (PPMC)
Integrated Data Services Limited (IDSL)
Nigerian LNG limited (NLNG)
National Engineering and Technical Company Limited (NETCO)
Hydrocarbon Services Nigeria Limited(HYSON)
Warri Refinery and Petrochemical Co. Limited (WRPC)
Kaduna Refinery and Petrochemical Co. Limited(KRPC)
Port Harcourt Refining Co. Limited (PHRC)
In
addition to these subsidiaries, the industry is also regulated by the
Department of Petroleum Resources (DPR), a department within the
Ministry of Petroleum Resources. The DPR ensures compliance with
industry regulations; processes applications for licenses, leases and
permits, establishes and enforces environmental regulations. The DPR,
and NAPIMS, play a very crucial role in the day to day activities
throughout the industry.
According to Onoh J.K (1995), when Nigeria
gained independence in 1960, oil production had been established in the
country and it was exporting over 170,000 barrels per day. It was Gluf
oil company that struck off shore oil on the Okan structure of the then
Bendel state (now, Edo state) in 1964. The licenses that were granted
these companies were both offshore and onshore. With these commercial
discoveries in petroleum products, the socio-economic and political
development of Nigeria began to crystallize as well as its internal
dynamics ethnicity.
All crude oil produce before the mid-sixties was
exported because of no-availability of local refineries, while domestic
demand of petroleum products was met by imports. However the need to
conserve foreign exchange creates job opportunities to some extent and
other benefits derivable from setting up refineries locally prompted the
government of Nigeria to establish and commission a refinery in
Port-Harcourt in 1965. The refinery has processing capacity 35,000
barrels per day to meet the increasing domestic demand while excess fuel
oil was exported.
Michael Tanzer (1980) states that the demand for
oil products continued to outstrip supply which made the government to
officially open the Warri refinery in 1978 with a total capacity of
100,000 barrel per day, thereby giving the country its present day
potential capacity of 260,000 barrels per day. These were designed to
refine 50 percent Nigerian light crude and 50 percent medium crude.
Expansion work is currently going on at both the Kaduna and Warri
refineries, with a fourth refinery being constructed near port-Harcourt
at a cost of about N750 million. It is hoped that when the fourth
refinery is completed, it will increase domestic refinery capacity by
150,000 barrels per day, and render unnecessary our offshore processing
arrangement by which Nigerian crude is taken abroad for refining and the
products are imported to meet the short fall in domestic requirements.
As the output from all the refineries will then exceed demand, there
will be a surplus available for export.
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ABSRACT - [ Total Page(s): 1 ]The oil industry which is the leading sector of the economy should have some spill over into the other sectors of the economy.The Nigerian economy has become dependent oil revenues over the past decades. During the 1986-92 periods, oil export revenues increased at an average of 13 percent per annum which GDP measure in current US Dollars, decrease by an average while oil export revenues alongside the continuing decline of the non-oil economy implies higher dependency.Over the years, the contribu ... Continue reading---
