The Nigerian National Petroleum Corporation (NNPC) finally transitioned to a private company. The state-owned corporation is no longer simply referred to as NNPC, but as NNPC Ltd (the Nigerian National Petroleum Company Limited).
The transitioning commenced proper on Friday, July 1, 2022, with the signing of the assets transfer documents by overseers of two ministries: the Ministers of Petroleum and Finance respectively, for the transfer of verified assets from the Corporation to the NNPC Ltd. The operation as a limited liability company is under the Companies and Allied Matters Act (CAMA).
The former state-owned company, known for its relatively poor leadership and lack of profits for some 45 years, will now be independent of government and operate without state funding, with the new goal of delivering value to its shareholders. NNPC’s shares and assets, including oil blocs and refineries, are now held by the ministries of petroleum and finance.
The development is in line with the provisions of the Petroleum Industry Act (PIA). The enactment of the PIA, omnibus legislation overhauling the Nigerian Oil & Gas Industry, heralded the birth of a new Corporate entity, the NNPC Ltd. incorporated as a Limited Liability Company. Under the PIA, the Company is free to operate in different sectors of the global energy industry and pursue other commercially viable ventures that will guarantee value to all its stakeholders.
The Nigerian government is confident that the new entity, which operates joint production ventures with oil majors, including Shell, Total, ExxonMobil, Chevron, and Eni, will attract more foreign investment and operate as a profitable entity that will declare dividends. President Muhammadu Buhari at the unveiling of NNPC Ltd on July 19 at the State House Conference Centre in Abuja described the transformation as a development that would give the NNPC Ltd a footing to operate in a competitive manner in line with its peers globally. Buhari said the change was expected to signal a new era of transparency, accountability, and energy security for the country.
”The provisions of the PIA will make the NNPC conduct its business with transparency and commercial viability. On July 1, I authorized the transfer of assets from the Nigerian National Petroleum Corporation to the NNPC Ltd, leading to the unveiling of Africa’s largest oil company today.
“NNPC Ltd will operate as a commercial, independent and viable national oil company at par with its peers globally with its 200 million shareholders while adhering to the principle of integrity and transparency.
“It is mandated by law to ensure energy security as it delivers energy to the world.”
Group Managing Director (GMD)/Chief Executive Officer (CEO) of NNPC Ltd, Malam Mele Kyari, said in a recent engagement session with business leaders across the company’s value chain in Abuja stated that with the level of assets available combined with the new fiscal regime, NNPC Ltd. was set to become the number one energy company in Africa, noting that global brands interested in doing business with the new NNPC Ltd. needed to be sure of the company’s asset base.
Kyari said to resolve the poor performance of oil production in Nigeria, the new NNPC Ltd will “act quickly, borrow money quickly and return people’s money quickly and can also make decisions quickly.” He, however, warned that the success or otherwise of the company depends heavily on how the change is managed.
It must not be mistaken that the government has privatized NNPC: it has merely commercialized it. Kyari also made it known that the limited company is hoping to launch an initial public offering (IPO) by the middle of next year. An IPO will enable the diversification of the shareholder base to include institutional and retail investors rather than just the federal government.
This hint came from Kyari who further assured that the privatization of NNPC will foster energy security in Nigeria as an expansion plan to grow its fuel retail presence from 547 to over 1500 outlets within the next six months has been made.
On its website, NNPC Limited describes itself as a dynamic global energy company with businesses and operations across the entire spectrum of the energy value chain. Its mandate, it said, is to create an energy business that is resilient.
The company claims it is “focused on energy transition while ensuring domestic energy security.” Its Vision is: To be the dynamic global energy company of choice. Its Mission is: Reliably deliver energy while continuously creating value for all stakeholders.
NNPC Ltd promises to maintain Integrity, Excellence, and Sustainability as its core values. It said its strategy is focused on growing our global energy delivery capacity by enhancing our upstream production, and expanding our gas processing and transportation services for domestic consumption, and exports.
Apparently, NNPC Ltd is coming on-stream with super confidence. It asserts that it is poised to revamp and expand Nigeria’s refining assets portfolio through greenfield projects with chemicals production integration and leverage equity partnerships to ensure it maintains the sufficient capacity to meet local and international demand for premium energy products and services.
The company assures that it is also set to promote environmental sustainability through the long-term decarbonization program, and quality investments in new energy sources such as solar and biofuels.
Nigeria’s oil history began with the discovery of oil in commercial quantity at Oloibiri, Bayelsa state in 1956. This discovery eventually led to the formation of the Nigerian National Oil Corporation (NNOC) as the National Oil Company of Nigeria in 1971.
In the same year, Nigeria joined the Organization of the Petroleum Exporting Countries (OPEC) as its tenth member. A merger of NNOC, with its operational functions, and the Federal Ministry of Mines & Power with its regulatory responsibilities gave birth to the Nigerian National Petroleum Corporation in 1977.
This entity endured until the signing of the Petroleum Industry Act (PIA). NNPC Ltd boasts it has the best hands on deck steering the company, driving efficiency, sustainability, and prosperity.
Members of the NNPC Ltd Board of Directors include:
Sen. Margery C. Okadigbo
Chairman, Board of Directors
Mr. Ahmed Aliyu
Director/Permanent Secretary Federal Ministry of Finance
Mr. Mele Kolo Kyari
Director/Chief Executive Officer, NNPC Ltd.
Mr. Umar Ajiya
Director/Chief Financial Officer, NNPC Ltd.
Chief Pius O. Akinyelure
Director
Engr. Henry Ikem-Obih
Director
Dr. Tajuddeen Umar
Director
Mallam Mohammed Lawal
Director
Mrs. Lami Onayi Ahmed
Director
Barr. Constance Onukwugha
Director
NNPC Ltd’s major concern is enhancing Nigeria’s liquid hydrocarbon production while creating new energy businesses and supporting its environmental sustainability effort. It maintains that it will put more effort into expanding and upscaling Nigeria’s gas processing and transportation infrastructure to meet domestic gas needs and exports, including LNG.
On sustainable energy, the company pledges to improve on the creation of sustainable, low-carbon energy options supported by the investment in the production and supply of renewable energy, as well as ensuring energy supply stability for Nigeria’s domestic market through sustainable operations.
Some oil and financial experts, however, seem not convinced by the optimism that the commercialization would bring in the expected gains. Whether they are right or wrong remains to be seen.
