National oil company of Nigeria to go public

Image: Information Nigeria 

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru has announced that the corporation will be listing over 40 percent of its shares on the Nigerian Stock Exchange (NSE).

Making the announcement in his keynote speech at a conference held in Lagos, Nigeria on Friday, Dr. Baru said that the shares would be floated once the Petroleum Industry Governance Bill (PIGB) gets presidential assent.

Following a 17-year delay, the Petroleum Industry Governance Bill was passed in January 2018. The Bill aims to introduce reform into the sector, restore transparency and facilitate a thriving petroleum industry that will be beneficial to the economy of Nigeria. In doing this, Dr. Baru said the sector has to be more commercially driven.

Under the current law, the NNPC functions as both operator and regulator of the oil sector, under the governance of the Ministry of Petroleum Resources. This, among other issues, is believed to be a reason for decline in the performance of the sector. Although it is Africa’s largest oil producer and a member of the Organization of Petroleum Exporting Countries (OPEC), Nigeria has seen a significant decline in oil production and exports in recent years, with the oil price drop exposing further issues in the management and operations of the country’s oil industry, particularly in the NNPC itself.

This year, Nigerian oil production and exports have continued to face structural and operational challenges, having experienced outages at its key pipelines which saw production dropping by more than 82,000 bpd in March of this year and later millions of barrels of crude oil going unsold.

Despite this, the future of the industry still looks promising, with Total committing to increasing oil production by 200,000 bpd by the end of this year, Niger set to refine its crude exports in Nigeria and Shell anticipated to reach FID on the Bonga Southwest oilfield by 2019. This is expected to contribute a further 180,000 bpd to the sector.

In working towards making the national oil company more profitable, the NNPC will be split into two entities: the Nigerian Petroleum Assets Management Company and the Nigerian Petroleum Company, which will be an integrated oil company taking all assets of the NNPC with the exception of production sharing contracts.

“The initial shares shall be held by the Ministry of Petroleum Incorporated (40 percent), the Ministry of Finance Incorporated (40 percent) and the Bureau of Public Enterprises (20 percent). However, 10 percent and an additional 30 percent of the shares of the company shall be floated on the Nigerian Stock Exchange between five years and 10 years from incorporation respectively,” explained Dr. Baru.

Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Maikanti Baru will speak at the Africa Oil & Power conference in Cape Town on September 5-7.