The Roles Of NNPC And OPEC In The Exploration, Production, Refining, Marketing And Distribution Of Petroleum Product

Economics

Topic: The Roles Of NNPC And OPEC In The Exploration, Production, Refining, Marketing And Distribution Of Petroleum Product

Table Of Content

The Role Of Nigerian National Petroleum Corporation (NNPC)

The Role Of OPEC

The Role Of Nigerian National Petroleum Corporation (NNPC)

In the oil sub-sector, this was established by decree 33 of April 28 1977. This was as a result of the re-organisation of Nigeria National Oil Corporation (NNOC) which had been set up in 1971 that merged with the ministry of petroleum resources. The corporation functions as a fully integrated oil company operating both in the system and downstream i.e Giving powers and operational interest in oil exploration and production as well as refining & petrochemicals in addition to products transportation and marketing with the aim of satisfying the domestic consumption of petroleum product. It was commercialized in 1988.

In order to reduce the subsidy on petroleum products, the NNPC executes increases in pump prices in 1988-2012 respectively. This has led to sharp increase in transport cost and other factor inputs in the industrial sector, thus compounding inflationary pressures in the economy. The activities of the NNPC are conducted through it’s deep division of labour and specialization. In this end, financially autonomous subsidiaries of NNPC have been established, each specializing in a particular activity:

1. Nigeria Petroleum Development Company Limited (NPDCL)

This is an exploration and production subsidiary (Upstream) aimed at fully participating in exploration of gas and crude oil within & outside Nigeria.

2. Nigeria Gas Company Limited (NGC)

It promotes the use of gas through gathering natural gas, treating and supplying different users e.g PHCN (NEPA), Ecowas countries etc.

3. Pipelines And Product Marketing Companies Limited (PPMC)

This is the main marketing outlet of petroleum products. It transports oil to the refineries and supplies finished products: Petrol, kerosene, diesel through a network of pipelines and debits and petrochemical products to every part of the country.

4. Portharcourt Refinery & Petrochemical Company Limited (PHRPC)

This is for processing and refining of crude oil.

5. Warri Refinery And Petrochemical Company Limited (WRPC)

It refines crude oil, petroleum into finished products and petrochemical products.

6. Eleme Petrochemical Company Limited (EPCC)

This make use of by-products of refineries and natural gas to produce a wide range of petrochemical products.

The Role Of OPEC

1. It influences the stabilization of prices of oil in the world market by fixing the minimum permissible prices- bench market price.

2. It ensures that there is a regular and steady supply of oil to the world market.

3. OPEC co-ordinates and harmonizes all policies of it’s member countries and adopt a uniform policy towards importing countries.

4. It promotes the participation of it’s members countries in oil exploration.

5. It has a common fund to assist needy member countries.

6. It provides a forum for member countries to solve their problems jointly.

7. OPEC as a force protects the interest of member countries in international scene.

8. Oil power is used to achieve the political needs of members of the countries.