With the NNPC Limited coming on board, the new company will no longer be concerned with issues of petrol price determination, and subsidy
It was a moment of joy for stakeholders in the oil and gas industry as President Muhammadu Buhari unveiled the new Nigerian National Petroleum Company Limited (NNPC Ltd.) on July 19.
Following the unveiling, the NNPC became fully commercialised and transited into a limited liability company.
There are some facts to know about the new NNPC limited.
It is important to note that as an offshoot of the Petroleum Industry Act (PIA) 2021 which was enacted to provide for the legal, governance, the regulatory and fiscal framework for the Nigerian Petroleum Industry, NNPC limited is expected to operate within the provisions of the Act.
The Chief Executive Officer (CEO) is no longer referred to as Group Managing Director (GMD), but now referred to as Group Chief Executive Officer or Group CEO.
The vision of the company is: to be the dynamic global energy company of choice and its mission is reliably delivering energy while continuously creating values for all stakeholders.
In line with Section 53(1) of the PIA 2021, with the transition, the government will no longer have control over the staffing of the NNPC limited.
Also Section 53 (5) of the Act stipulates that shares of the company held by the government are not transferable or mortgaged unless approved by the government and the National Economic Council.
With the NNPC Limited coming on board, the new company will no longer be concerned with issues of petrol price determination, and subsidy.
The new NNPC limited will no longer remit funds into the Federation Accounts Allocation Committee (FAAC).
Sector 54(9) provides that the initial capitalisation of the NNPC Limited will not be less than its financial requirements to effectively discharge its commercial duties and deal with its obligations and liabilities transferred to it.
The Federal Government will put an end to funding its projects as was obtainable since its inception.
According to the law, the company will run on a commercial basis in a profitable and efficient manner without recourse to government funds and shall declare dividends to shareholders and retain 20 per cent of profits as retained earnings, to grow its business.
Apart from profit-seeking, NNPC Limited is expected to operate above board by mandatorily making disclosures for every financial year.
Most importantly, the NNPC Limited will be ready for an Initial Public Offer (IPO) in the next 18 months.
Meanwhile, President Buhari said the New NNPC would guarantee energy security, free from institutional regulation.
Buhari said this at the unveiling of the Company which held at the State House, Abuja.
Sharing his vision for the petroleum industry reforms and the new corporate entity, the president said that his administration was keen on creating the right atmosphere to attract investment and grow the country’s economy.
Buhari also said that the NNPC Ltd. would play an important role in the global energy market.
“NNPC is mandated by the law to ensure Nigeria’s national energy security is guaranteed to support sustainable growth across other sectors of the economy as it delivers energy to the world.”
Describing NNPC as Africa’s largest national oil company by capitalization, he said that the company now had the impetus to become a self-governing entity free of government’s control.
“The provisions of the PIA 2021 have given the Nigerian petroleum industry a new impetus.
“An independent National Oil Company that will operate without relying on government funding and free from institutional regulations such as Treasury Single Account, Public Procurement and Fiscal Responsibility Acts.”
He, however, declared that NNPC Ltd. would henceforth conduct itself under the best international business practice in transparency, governance and commercial viability.
Speaking in a similar vein, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said that the Buhari administration had been very clear from the onset about its desire to create a more conducive environment for the growth of the oil and gas industry.
Describing the unveiling of the new NNPC as a “remarkable milestone”, Sylva expressed optimism that the company would live up to its mandate.
“This is one of the magnanimous provisions of the PIA, which is being unveiled at this important occasion.
“The unveiling of NNPC Limited today is a new dawn in the quest for growth and development of the Nigerian oil and gas industry, opening new vintages for partnerships,” Sylva said.