President Muhammadu Buhari, last week, unveiled the new Nigerian National Petroleum Company Limited (NNPCL) in Abuja. The event marked the official transition of the hitherto state-run Nigerian National Petroleum Corporation (NNPC) to a commercial and profit-oriented national oil company, with about 200 million shareholders. The new NNPC was incorporated last year in line with the provisions of the Companies and Allied Matters Act (CAMA) and the Petroleum Industry Act (PIA). Under the new arrangement, the erstwhile Group Managing Director, NNPC, Mr. Mele Kyari, becomes the new Group Chief Executive Officer.
The new NNPC is mandated by the enabling law to, among other things, focus on profitability and continuous value creation for the shareholders. During the unveiling, President Buhari urged the new management of the company to ensure that Nigeria’s national energy supply is guaranteed and support sustainable growth across other sectors of the economy as it delivers energy to the world. The company, according to the president, will not rely on government funding and will be free from institutional regulations such as the Treasury Single Account (TSA), the Fiscal Responsibility Act (FRA) and the Public Procurement Act. Although the tasks before the new NNPC management team are enormous, they are not insurmountable. If managed as a transparent commercial entity, the new national oil company will achieve the set objectives. Good enough, the PIA has provided the necessary fiscal framework that will, through the new national oil company, transform the oil and gas sector.
Interestingly, the new helmsman, Kyari, is adequately prepared to tackle the tasks ahead. He has promised to run a profitable, efficient, transparent and accountable enterprise that will deliver dividends to its shareholders, as well as support sustainable growth. There is indication that the company’s Initial Public Offer (IPO) is expected by the middle of next year.
Meanwhile, Kyari’s vision of the NNPC Ltd is that of a “smart, more responsive and more accountable company that must act” in meeting the standards for best practices in the industry in terms of performance, and governance. He should keep to his words. The shareholders will expect no less from the new team. We laud the transformation of the NNPC and hope that the problems that afflicted the former will not haunt the latter. We want an NNPC that will really ensure energy for today and energy for tomorrow as the company’s theme song suggests. There is need for the enthronement of a culture of values integrity and excellent performances in the new NNPC.
Let the NNPC ensure efficient dividend and energy delivery. We enjoin the management of NNPC to emulate the Saudi Arabia’s Aramco, a global reference point on how to run a successful, profitable commercial oil venture. Aramco has a market valuation of almost $3 trillion, with a Profit After Tax (PAT) of $110 billion for 2021 financial year. This represents 124 per cent increase over the previous financial year which was $49billion. This is why Aramco has maintained an ‘A’ credit rating by renowned global rating agencies like Standard & Poor’s, Fitch and Moody’s.
Therefore, the new NNPC must be run transparently as a profit-oriented commercial entity. The corruption and opaqueness that characterised the former one must not recur in the new one. The hiring of the best talents, with proven competencies, as Kyari has assured, is one of the best ways the company can meet its vision. The unveiling of the new NNPC is a great milestone in the history of the oil industry, especially coming 45 years after the establishment of NNPC as a state-owned oil company in 1977.
We recognise President Buhari’s efforts in this regard. Now that the new NNPC has been officially unveiled, it must live up to the expectations of its over 200 million shareholders. Let the Board and Management of the company ensure that the new dream is not vitiated.