ABUJA, Nigeria, March 4 (UPI) -- The state oil company of Nigeria, burdened by corruption and revenue losses, will be split up into dozens of distinct companies, the petroleum minister said.
"For the first time, we are unbundling the subset of the Nigerian National Petroleum Corp. to 30 independent companies with their own managing directors," Nigerian Petroleum Minister and Managing Director of the Nigerian National Petroleum Corp. Emmanuel Kachikwu said in a statement.
Nigeria's oil-dependent economy has struggled under the strains that have emerged since crude oil prices first dropped below the $100 per barrel mark in 2014. With crude oil prices hovering in the mid-$30 range, economies that depend on oil are feeling the pressure.
The International Monetary Fund warned last week the impact of lower oil prices were adding to pressure from an economy in need of deep structural reforms. From the pressure of oil prices alone, the government's deficit doubled to about 3 percent of the gross domestic product last year.
Gene Leon, the IMF director for Nigeria, said exports dropped last year by about 30 percent and the economy slowed from 6.3 percent in 2014 to 2.8 percent last year.
"With oil prices expected to remain low for a long time, continuing risk aversion by international investors, and downside risks in the global economy, the outlook remains challenging," he said in a statement.
Though crude oil prices have recovered from 2016 lows below the $30 per barrel market, markets remain skewed heavily toward the supply side. Kachikwu, who serves also as the rotating president for the Organization of Petroleum Exporting Countries, said in December oil demand will grow by 1.3 million barrels per day in 2016, down from the expected full-year demand growth for 2015 of 1.5 million bpd.
For Nigeria, the minister said recovery was emerging as profits have started to emerge for the state oil company. On the prospects for some form of coordinated action from OPEC and non-member states, Kachikwu said Russian would host a meeting March 20 to "fine tune collaborative strategies."