The Group Managing Director, Nigerian National Petroleum Corporation, NNPC, Mele Kyari has said Nigerians and foreign investors interested in owning shares in the corporation set for full commercialisation in the next six months may have to wait till 2024.
Kyari, who revealed this when he appeared on Global Financial News on Bloomberg Television, noted that the national oil company, which would operate under the Companies and Allied Matters Act (CAMA), would only be able to issue its Initial Public Offering (IPO) to investors in the next three years.
By the provisions of the new Petroleum Industry Act (PIA), NNPC, as currently constituted, is expected to transition into a fully commercialised business concern in which the public could own shares and take part in its major decisions.
Kyari explained that the books of the NNPC would need to be properly cleaned up, with the proposed NNPC Limited recapitalised, before embarking on such a huge business decision.
Kyari stated, “We will be in a position to consider any IPO in three years’ time. That is the provision of the law. But when you want to get ready for IPO, you need to do things differently, you need to get your books correct, you need to recapitalise; you need to shape your portfolio and many more things that you have to do until you get the IPO ready.
“Surely, it is not what we will do in 2022 or 2023. Probably the earliest consideration will be in three years’ time.”
The NNPC GMD maintained that the corporation was currently in a good stead with the declaration of its first profit in 44 years. He added that the IPO would put NNPC in an even better position in the oil and gas space.
Kyari said the corporation was concerned about the global transition towards renewable sources of energy, pointing out that the NNPC is in the process of adjusting its portfolio to meet future challenges.
“So, this is not something that we are going to do tomorrow, obviously not. Our new law has made the provision that we can sell shares of this company, but in today’s context, I can really say this company is doing great and getting an IPO means that it is going to be better than what it is today.”
Kyari reiterated that the corporation’s involvement in the Dangote refinery, for which it is paying about $2.7 billion, was to ensure energy security as well as tie down markets for Nigeria’s crude oil.
Meanwhile, the Minister of State for Petroleum Resources yesterday called for the establishment of an African energy bank to help boost business activities in the continent’s oil and gas sector.
The Organisation of Petroleum Exporting Countries (OPEC) had recently projected that the global oil industry would require about $12.6 trillion investments in the Downstream, midstream as well as upstream to sustain its innovative and production efficiency in the next 25 years. OPEC warned that Nigeria’s economy and those of other resource-dependent countries might be badly affected, especially if the current push against fossil fuels continued to gain ground.