Nigeria to revamp ailing state-owned oil company

Nigeria has announced plans to transform its near-bankrupt state-owned oil company into a global player.

The aim is to break a legacy of corruption and mismanagement and thrust the business into the ranks of increasingly influential national energy companies.

Analysts say the Nigerian National Petroleum Corporation (NNPC), a majority partner in the country's joint ventures with established multinationals, has long served as a reservoir of cash feeding Nigeria's venal political system.

But this week, the government of Umaru Yar'Adua, Nigeria's new president, said it would break the company into several units as part of plans to define responsibilities, increase public scrutiny and seek private finance sources. The idea is to turn NNPC's amorphous structure of regulatory and business arms into a company that could tap international markets, acquire assets and assert more control over the nation's vast oil reserves.

Officials have made comparisons between the future Nigerian entity and companies such as Russia's Gazprom and Brazil's Petrobrás, which are at the forefront of the trend of national concerns challenging the dominance of the leading international oil companies.

"We see ourselves competing with the other national oil companies which have left us so far behind," said Levi Ajuonuma, an NNPC spokesman.

"We haven't grown as we should have, but it's better late than never."

The future National Petroleum Company of Nigeria (Napcon) will sit alongside new industry bodies, including independent regulators, a downstream organisation and an assets holding company. Napcon's finances will be separated from the state's, and the company will manage its own funding - a change analysts say will encourage greater transparency.

Jackson Gaius-Obaseki, a former head of NNPC, said the restructuring amounted to a salvaging exercise for a company on the point of collapse. "The capability [ of NNPC] to hold together no longer exists," he said.

The company, which has a 1.4 million barrels a day share of Nigeria's overall production, has been drained by government subsidies on imported petrol and years of abuse by political rulers, say analysts.

In July, Mr Yar'Adua said he wanted to foster greater NNPC accountability. His predecessor, Olusegun Obasanjo, promised change but delivered little.