The Nigerian National Petroleum Company (NNPC) Limited, now a Companies and Allied Matters Act (CAMA)-regulated enterprise, was floated with an initial capital of N200 billion to provide better returns to shareholders, enhance oil industry operations and improve Nigeria’s revenue base. As a private sector enterprise, NNPC Limited is expected to create improved and more transparent operational framework for Nigeria’s oil and gas industry while sustaining confidence of local and foreign investors, writes Assistant Business Editor COLLINS NWEZE

The conversion of the Nigerian National Petroleum Company (NNPC) Limited from public to private sector enterprise was considered impossible several decades ago. That explains why not too many people saw the reforms and unbundling of the NNPC into commercially-oriented and profit-driven smaller units coming.

Then on September 2021, the Corporate Affairs Commission (CAC) completed the incorporation of the NNPC Limited in accordance with the new Petroleum Industry Act (PIA), a law that had taken almost 20 years to bring to fruition. With the hurdles off the way and official documentation completed as specified in section 53(1) of the law, the operationalisation of the Act to transform the troubled petroleum industry in the country commenced.

The PIA was signed into law by President Muhammadu Buhari on 16th August, 2021, following its passage by the National Assembly in July of the same year. Specifically, Section 53 (1) of the Petroleum Industry Act 2021 requires the Minister of Petroleum Resources to cause for the incorporation of the NNPC Limited within six months of the enactment of the PIA in consultation with the Minister of Finance on the nominal shares of the company.

With the registration by the CAC, the NNPC Ltd was floated with an initial capital of N200 billion. The Group Managing Director of the NNPC, Mallam Mele Kyari, said NNPC Ltd is expected to become a commercially-oriented and profit-driven national petroleum company that would be the envy of all players in the sector. He disclosed that the NNPC would be managed like a private sector enterprise that is more efficient in its operations, effectively maximise returns on investment for the 200 million Nigerians, ensure returns for shareholders and pay taxes to the government.

Kyari said that President Buhari will officially unveil the new NNPC Ltd on July 19 and invited all players in the sector to be part of the epoch-making event. At the same time, Section 65 of the Act encourages NNPC Limited and its joint venture partners to explore the use of incorporated joint venture companies. Consequently, he said the firm may be required to declare dividends to its shareholders as well as withhold 20 per cent of profit as retained earnings to grow its business like any other incorporated entity incorporated under the CAMA.

“Consequently, our company, the NNPC Limited will be unveiled on 18th of July 2022 by our President, and I invite you to join us in Abuja Nigeria for the historic event as we create the largest corporate entity in Africa,” he told a gathering of oil and gas professionals recently.