NNPC Transitions To Commercial Entity With No More Recourse To Public Funding
By Gift Eguavoen
In a landmark event in Abuja on Tuesday, President Muhammad Buhari formally unveiled the transformed Nigerian National Petroleum Company (NNPC) Limited.
The event follows the signing into law of the Petroleum Industry Act (PIA) 2021, which provides for the formerly state controlled NNPC to transition into a commercially viable firm under the extant laws of the Companies and Allied Matters Act (CAMA).
Unveiling the new company, which comes under a new logo and motto – Energy for Today, Energy for Tomorrow – President Buhari stated that the transformation would strengthen the capacity and market relevance of Nigeria’s oil industry.
He added that the PIA gives enhanced regulation to create a commercial driven and independent national oil company that will operate without government funding and free from institutional needs such as treasury single account and fiscal responsibility Act.
“Our country places a high premium on creating the right atmosphere that supports investment and growth to boost our economy and continues to play an important role in sustaining global energy requirements. We are transforming our petroleum industry to strengthen its capacity and market relevance for the present and future global energy priorities,” the President said.
He added that the PIA 2021 has given the Nigerian oil sector a new impetus with the improved fiscal framework, transparent governance, enhanced regulation and the creation of a commercially-driven and independent national oil company.
“It will, of course, conduct itself under the best international business practices in transparency, governance and commercial viability,” the President said, adding that NNPC Limited would now operate as a commercial oil company with over 200 million Nigerians as shareholders.
Extractive360 reports that President Buhari had on the 1st of July 2022, authorized the transfer of assets from NNPC to NNPC Ltd, steering the implementation towards leading the launch of the oil company.
According to him, NNPC Ltd is mandated by law to ensure Nigeria’s energy security is guaranteed and support sustainable growth across other sectors of the economy.
Minister of State for Petroleum Resources, Timipre Sylva, in his remarks said Nigeria lost about $50 billion worth of investments waiting for the PIA, as the country got only 4% of oil and gas investments between 2015 and 2019.
While noting that the country is setting those woes behind, he said the PIA not only assures companies of protection of investments, it also avails Nigeria of golden opportunities to strengthen institutions and attract much needed investments.
Also speaking, the Group Chief Executive Officer of NNPC Ltd, Mele Kyari, said the transition marks a new beginning for Nigeria’s energy industry adding that the company is charged to meet the high expectations of Nigerians.
“We are taking a strategic initiative by rolling out a plan to grow retail presence from 547 to over 1000 outlets in six months, hinged on a new commitment to partnership that delivers sustainable value, a new culture to design a quest to be a global company of choice,” Kyari said.
In his remarks, the Secretary General of African Petroleum Producers Organisation (APPO), Dr. Omar Farouk Ibrahim, said, although Nigeria had over the last 20 years taken two steps forward and three steps backward in the journey to passing the PIA, the President Buhari-led administration, the National Assembly and the NNPC leadership deserves commendation for finally taking the bold step to bring to an end the existence of the NNPC as a Corporation.
“It is important that this success came now when the world is moving away from fossil fuel to new energies, Nigeria is now poised to make that transition,” Ibrahim said, while urging other APPO members to make such transitions.