It was a moment of joy for stakeholders in the oil and gas industry as President Muhammadu Buhari unveiled the new Nigerian National Petroleum Company Limited (NNPC Ltd.) on July 19.
Following the unveiling, the NNPC became fully commercialised and transited into a limited liability company.
There are some facts to know about the new NNPC limited.
It is important to note that as an offshoot of the Petroleum Industry Act (PIA) 2021 which was enacted to provide for the legal, governance, the regulatory and fiscal framework for the Nigerian Petroleum Industry, NNPC limited is expected to operate within the provisions of the Act.
The Chief Executive Officer (CEO) is no longer referred to as Group Managing Director (GMD), but now referred to as Group Chief Executive Officer or Group CEO.
The vision of the company is: to be the dynamic global energy company of choice and its mission is reliably delivering energy while continuously creating values for all stakeholders.
In line with Section 53(1) of the PIA 2021, with the transition, the government will no longer have control over the staffing of the NNPC limited.
Also Section 53 (5) of the Act stipulates that shares of the company held by the government are not transferable or mortgaged unless approved by the government and the National Economic Council.
With the NNPC Limited coming on board, the new company will no longer be concerned with issues of petrol price determination, and subsidy.
The new NNPC limited will no longer remit funds into the Federation Accounts Allocation Committee (FAAC).
Sector 54(9) provides that the initial capitalisation of the NNPC Limited will not be less than its financial requirements to effectively discharge its commercial duties and deal with its obligations and liabilities transferred to it.
The Federal Government will put an end to funding its projects as was obtainable since its inception.
According to the law, the company will run on a commercial basis in a profitable and efficient manner without recourse to government funds and shall declare dividends to shareholders and retain 20 per cent of profits as retained earnings, to grow its business.
Apart from profit-seeking, NNPC Limited is expected to operate above board by mandatorily making disclosures for every financial year.
Most importantly, the NNPC Limited will be ready for an Initial Public Offer (IPO) in the next 18 months.
Meanwhile, President Buhari said the New NNPC would guarantee energy security, free from institutional regulation.
Buhari said this at the unveiling of the Company which held at the State House, Abuja.
Sharing his vision for the petroleum industry reforms and the new corporate entity, the president said that his administration was keen on creating the right atmosphere to attract investment and grow the country’s economy.
Buhari also said that the NNPC Ltd. would play an important role in the global energy market.
“NNPC is mandated by the law to ensure Nigeria’s national energy security is guaranteed to support sustainable growth across other sectors of the economy as it delivers energy to the world.”
Describing NNPC as Africa’s largest national oil company by capitalization, he said that the company now had the impetus to become a self-governing entity free of government’s control.
“The provisions of the PIA 2021 have given the Nigerian petroleum industry a new impetus.
“An independent National Oil Company that will operate without relying on government funding and free from institutional regulations such as Treasury Single Account, Public Procurement and Fiscal Responsibility Acts.”
He, however, declared that NNPC Ltd. would henceforth conduct itself under the best international business practice in transparency, governance and commercial viability.
Speaking in a similar vein, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said that the Buhari administration had been very clear from the onset about its desire to create a more conducive environment for the growth of the oil and gas industry.
Describing the unveiling of the new NNPC as a “remarkable milestone”, Sylva expressed optimism that the company would live up to its mandate.
“This is one of the magnanimous provisions of the PIA, which is being unveiled at this important occasion.
“The unveiling of NNPC Limited today is a new dawn in the quest for growth and development of the Nigerian oil and gas industry, opening new vintages for partnerships,” Sylva said.
In the meantime, NNPC Ltd. announced plans to aggressively grow its petroleum products retail outlets across the country by 174 per cent; that indicates an increase from the current 547 to 1,500 in the next six months.
This development was to keep to its new focus on commercial viability and profitability in the pursuit of its mandate to provide energy security for Nigeria.
Group Chief Executive Officer (GCEO) of NNPC Ltd., Malam Mele Kyari, made the announcement at the presidential unveiling of the new NNPC as provided by the PIA 2021.
“We have taken a strategic initiative to achieve our mandate of ensuring energy security for our country by rolling out a comprehensive expansion plan to grow our oil retail outlets from 547 to over 1,500 within the next six months,” Kyari said.
On the prospects of the new NNPC, he said that the Company was primed to succeed considering the array of talents, skills and professionals in its employ, adding:
“NNPC Limited is positioned to lead Africa’s gradual transition to new energy by deepening natural gas production to create low carbon activities and positively change the story of energy poverty at home and around the world.”
With the new commercial focus and corporate identity, NNPC would now be regulated in line with the provisions of the Companies and Allied Matters Act (CAMA).
Kyari gave the charge at the 2nd Meeting of Chief Executive Officers of the National Oil Companies of APPO Member Countries hosted by NNPC Ltd in Abuja.
According to him, the grinding energy poverty across the African continent does not call for long talks and Power-Point presentations anymore but concrete actions and collaborative efforts on the part of the national oil companies to make energy available for economic development.
“We must develop local capacity. They are all under enormous stress not to do business with us.
“We can’t continue to talk, we must act. Time is running out, I must confess. We must realise that we don’t have time for talking; we need to act, and act very quickly so that we can help our people out of poverty by creating prosperity.
He listed some areas that required urgent action and collaboration to include access to capital, demand for energy justice, and establishment of regional infrastructure.
Kyari stressed that a number of cross-country gas infrastructure were already springing up across the continent.
He explained that to put up regional infrastructure, as it was already happening in the Central Africa Pipeline Network, the NNPC Ltd. started the promotion of the Nigeria-Morocco Pipeline that would run through nine African countries.
Speaking earlier in his welcome address, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said the Meeting of Chief Executive Officers of the National Oil Companies of APPO Member Countries was revived by the Ministerial Council of APPO.
Sylva said the revival was in recognition of the critical role the national oil companies needed to play in ensuring the survival of the oil and gas industry in Africa, in the face of the changing global energy landscape.
He said that the challenges posed by the global energy transition required a practical approach on the part of operators and policy makers to fashion out a unified action plan for the African continent.
“We require a completely new approach; an approach that is both inclusive and pragmatic.
“The policy makers as well as the operators have crucial roles to play in achieving this.
“We need you to tell us the practical challenges you face today and are likely to face in the years to come.
“These practical realities should constitute major inputs into the policy-making process of the political leadership.”
On his part, the Secretary-General of APPO, Dr Omar Farouk Ibrahim, also spoke on the steps being taken by the organisation to develop requisite local technology across member countries.
The Managing Director of NGMC, Mr Justin Ezeala made the commitment at the headquarters of the company in Abuja during an oversight visit to the company by the House of Representatives Committee on Gas Resources.
Ezeala assured that NGMC would work assiduously towards addressing some of the issues raised by the committee regarding host community development.
“We have taken note of all your concerns and we will address them.
“We want to assure you that you don’t need to invite us to report to you, it is our duty to report to you as part of our commitment to accountability.”
Speaking earlier on the objective of the oversight visit, Chairman of the Committee, Rep. Nicolas Mutu, said the visit was to ascertain the progress made in facilitating gas penetration across the country to boost economic development.
Mutu said the committee was prepared to use every legislative means to encourage gas penetration in Nigeria and would like to use the visit to learn about NGML’s plan for LPG distribution.
He expressed delight and commended the management and staff of NGMC for the warm reception accorded members of the committee.
