Joy Agwunobi
The Nigerian National Petroleum Company Limited (NNPC) is on the cusp of a major transformation, with a plan to list itself on the Nigerian Exchange, paving the way for a new era of transparency and accountability, as the company becomes subject to the public scrutiny that comes with being a publicly listed entity.
Mele Kyari, the group chief executive officer of the NNPC, recently disclosed that the company’s shares will soon be listed on the stock market, in accordance with the provisions of the Petroleum Industry Act (PIA).
Kyari, while addressing an audience of international oil and gas industry players at the just concluded 2024 CERAWEEK Conference in Houston, U.S, stated that the move is crucial to achieving the objectives of the PIA and ensuring transparency, efficiency, and profitability in the Nigerian oil and gas sector.
With the passage of the PIA, the Nigerian government has enacted a comprehensive legal framework that will overhaul and modernise the country’s petroleum industry. The new law, which was signed into effect in 2021, addresses a wide range of issues, including the licensing and fiscal regime for the upstream sector, the governance and regulation of the industry, and institutional reforms. These changes are designed to encourage greater investment in the oil and gas sector and promote transparency and efficiency.
The NNPC’s transition from a government-owned corporation to a commercially focused entity is a significant change, and one that Kyari says is a reflection of the company’s commitment to implementing the PIA. As part of this transformation, Kyari explained that NNPC has undergone significant reforms, including a complete restructuring of its subsidiaries and business units, the establishment of a profit-driven business model, and a renewed focus on accountability to its shareholders.
According to Kyari, NNPC’s transition to a public limited liability company will unlock significant opportunities for the company to grow and expand its operations. It will allow the company to raise capital from a variety of sources, including international investors and lenders, and will give it the flexibility to pursue new business opportunities and partnerships. This, in turn, will help NNPC become more competitive on the global stage and help the company contribute to the economic development of Nigeria.
Kyari further explained that NNPC’s shareholders are now the general public, as a result of the company’s transition to a limited liability company. However, he noted that the company is moving toward a structure where a wider range of shareholders will be able to invest in NNPC. Adding that the transition has required NNPC to pay taxes and royalties, and has also made the company responsible for paying dividends to shareholders.
According to Kyari, NNPC is well on its way to meeting the timeline for its public listing as outlined in the PIA. The PIA stipulates that NNPC must be incorporated within six months of the act’s passage, and that it must be listed on the stock exchange within three years of its incorporation.
