The new Nigerian National Petroleum Company (NNPC) Limited was unveiled in Abuja on Tuesday, July 19, 2022 by President Muhammadu Buhari. In a colourful ceremony attended by prominent Nigerians and other stakeholders, the former Nigerian National Petroleum Corporation was officially transformed to a limited liability company with the aim of making profit and ensuring high return on investment. Like any other company in the oil and gas sector, it is going to be managed as a profit-making entity or enterprise in line with the provisions of the Companies and Allied Matters Act (CAMA) and the Petroleum Industry Act (PIA).
The NNPC transition from a federal government corporation to a private business concern is coming 45 years after its creation in 1977, a period some critics described as that of perpetual loss-making. With the rebirth of the hitherto oil behemoth, it is generally expected that the company will now be making profits like other businesses and that Nigerians and other stakeholders in the new commercial outfit will now enjoy the expected dividends. It is hoped that the years of locust, years of running the organization like a cartel with its notorious opaqueness is gone forever. In other words, the over 200 million Nigerians, who are presumably the owners of the born again NNPC, will at the end of every business year smile to the banks with humongous dividends and other benefits. The promoters of the new NNPC have regaled Nigerians that the new NNPC Limited will be run like the Saudi Arabia’s Aramco and Brazil’s Petrobras. Good news and indeed more good news coming from Nigeria in recent times.
Despite the optimism of a new national oil company that will be fundamentally different from the old one, some Nigerians are raising concerns that the transition of the NNPC to a business entity may end up as a mere change of name like every other thing Nigerian. They are also saying that the change of nomenclature will amount to nothing if at the end of the day the organization is still run and managed with the same old ways and fashion of the former oil cartel. But the new management of the organization has allayed such fears and said, the organization will be run with the best global practices. In one of their advertorials in a national daily announcing the rebirth, they claim: “We will be the dynamic global energy company of choice.” It is expected that they do so. Nigerians would like the new NNPC to be one of the best managed oil companies in the world.
Now that NNPC Limited is a private business concern, President Buhari said it would no longer qualify for government funding, it would compete favourably like its peers globally and it will be free from the bureaucracy associated with government owned organizations. The new NNPC is therefore freed from the regulations of the Treasury Single Account (TSA) and the Public Procurement and Fiscal Responsibility Acts.
According to the President, “NNPC Limited will operate as a commercial, independent and viable National Oil Company (NOC) at par with its peers around the world, to sustainably deliver value to its over 200 million shareholders and the global energy community, while adhering to its fundamental cooperate values of integrity, excellence and sustainability.” He continued: “NNPC Limited is mandated by the law to ensure Nigeria’s national oil energy security is guaranteed to support sustainable growth across other sectors of the economy as it delivers energy to the world.” What the President said is cheering. It raises the hope that at last something good is coming out of the nation’s oil sector. However, the problem, in fact, our problem in this part of the world is not about saying good things. We don’t lack good ideas and fancy propositions at a time like this, what we lack is the political will to implement the good ideas.
I hope the NNPC will also be operated in line with the good submission from the President. It is satisfying that the new Group Chief Executive Officer of the NNPCL, Mele Kyari, has promised that the company will end energy poverty and losses. According to him, “NNPC Limited is positioned to lead Africa’s gradual transition to new energy by developing national gas production to create low carbon activities and positively change the story of energy poverty at home and around the world.” And to ensure energy security, Kyari was quoted as saying that “the company had adopted a strategic initiative to achieve the mandate of energy security for the country by rolling out a comprehensive expansion plan to grow its fuel retail presence from 547 to over 1,500 outlets within the next six months.”
The plan to make NNPCL a viable business entity is one of the best achievements of the Buhari’s administration. Repositioning the NNPC to be like Aramco which in 2020 made $230 billion or the Chinese Sinopec which made $323 billion in the same year under reference, is indeed the best way to go. But like other stakeholders in the national oil company, I hope the born again enterprise will not be affected by the Nigerian factor, the disease of inefficiency and the plaque of corruption, nepotism, sectarianism and other ills associated with this post-colonial entity called the giant of Africa by the sheer size of its population and economy. These are some of the issues the Kyari-led new business outfit should worry about. I say this bearing in mind that if the company is not run as a true business concern in line with global best practices, the talk of returning huge profits to Nigerians and other stakeholders will be a ruse, an aborted dream. With the new NNPC, let us demonstrate and show the world that Nigerians can truly run a profitable national oil company in a modern era. I hope that the federal government will really give the NNPC the needed freedom and ample space to operate effectively as President Buhari has promised. However, the rising prices of diesel, aviation fuel and petrol is really something the NNPC should worry about in the midst of this energy transition. It is not yet clear how the subsidy issue will be tackled by the government, now that the NNPC has been officially commercialized. All the same, the NNPC should beware of the problems that attended the privatization and commercialization of NEPA and PHCN and try as much as possible to avoid them as it moves to ensure that Nigerians benefit from their naturally endowed oil and gas resources.
Those in charge of the new NNPC need to study what and what makes Aramco, Sinopec and Petrobras to be successful and incorporate some of them in the running of the national oil company, Mele Kyari and his energetic and world-class team must do all within their powers to ensure that all Nigerians and other investors, truly own and benefit from the brand new NNPC. With its expected Initial Public Offer (IPO) coming up by the middle of next year, the new management of the NNPC must ensure that the shares are allotted to all Nigerians and not to a few moneybags or privileged individuals. Nigerians also expect more transparency and accountability in the management of the new oil enterprise. Since the new NNPC is a new creature, old things are passed away and it is no longer going to be business as usual. Therefore, the opaqueness that surrounded the affairs of the former NNPC ought to really make allowance for the enthronement of truth, honesty and clarity in the running of the new company.