By Adewole Kehinde
On Tuesday, July 19th, 2022, the crème of Nigeria’s political and socio-economic environment, especially the oil and gas industry, witnessed the unveiling of the new Nigerian National Petroleum Company Limited (NNPC Limited) at the State House Conference Centre by President Muhammadu Buhari.
There is no doubt that the milestone event has officially changed the NNPC from a wholly state-run entity to a commercial oil company, limited by shares.
Many critics have termed the unveiling as another cosmetic decoration of the same old corruption-infested and inefficient NNPC with just a logo change, with few commending it.
What caught my attention was a particular publication titled “Old Wine In A New Bottle: New NNPC Limited, A Repackaged Inefficiency?”
I must at this point commend the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC Limited) for his continued commitment to conducting the business and operations of the company transparently, to place it on the path to profitability.
Since he assumed office, he has taken calculated steps to ensure more openness in the activities of the company, and the Transparency, Accountability and Performance Excellence (TAPE) agenda has brought about greater transparency and accountability in NNPC’s management of Nigerian oil and gas revenues to date.
Kyari has not relented in his commitment to transparency. I remember listening to him sometime in 2020 at an award ceremony when he said passionately, “I want to assure you that NNPC under my leadership will continue to be transparent in its operations, render complete and timely financial statements to all stakeholders, and be repositioned for profitability for the benefit of over 200 million Nigerians.”
For those referring to the New NNPC Limited as a repackaged inefficiency, here are things they need to know:
The NNPC Limited is now being structured to be run as a commercial venture. If run profitably, as it is expected to, it would declare dividends and profits to its shareholders and hold Annual General Meetings.
As an energy expert, I can say that all fears being entertained by critics will be overcome because the road to full privatization of the NNPC Limited is a gradual process.
The unveiling of the company is the beginning of a process of moving to get NNPC Limited more commercially independent.
The company could bargain with sovereign businesses and source for deals, and there will be more disclosures on how its operations are run.
NNPC Limited will be independently run and open its books more to the public now, like its peers, Brazil’s Petrobras, Saudi-Aramco, and other publicly quoted national oil firms do.
At the unveiling, the Chief Executive Officer of the NNPC Limited, Mele Kyari, hinted that the company would launch an initial public offer (IPO) by the middle of next year.
An IPO will allow a proper valuation of the NNPC Limited and diversification of the shareholder base to include institutional and retail investors rather than just the Federal government.
“We are convinced that by the middle of next year, this company will be IPO-ready, which means that you will have the systems, processes, and a company that is accountable to its stakeholders and shareholders,” Kyari said.
As a commercial entity, NNPC Ltd. will no longer have access to state funds. Its shares and assets, including oil blocs and refineries, are now held by the ministries of petroleum and finance.
I am sure in the next few weeks, the template and the mode of transit to a commercial entity will be communicated after meetings between the Ministry of Finance Incorporated and the Ministry of Petroleum Resources.
So I will encourage the negative critics to be patient as a process has just begun. There is a need to follow it with patience because the NNPC Limited will function as an independent entity while adding value to Nigerians.
Adewole Kehinde is the publisher of Swift Reporters. He can be reached via 08166240846, 08123608662
