New NNPC Ltd Won’t Need My Approval For Any Transaction—Sylva

Nigeria’s Minister for State Petroleum, Timipre Sylva, has said that the Nigerian National Petroleum Company Ltd will set up a world class structure that will be a game changer and help it take decision quickly.

President Muhammadu Buhari had on Tuesday unveiled a new independent national company which has a fresh slogan, ‘Energy for Today: Energy for Tomorrow’.

The new company is expected to declare profit to the Nigerian government as opposed to the previous regime where it was mandated to fund the Federation Account monthly.

“We have given them independence; I am now part of government. NNPC Ltd had to come up with a corporate structure that will work for them. Of course, government will step down and we as shareholders will expect NNPC to perform properly and declare dividend to us,” Sylva said on Arise Prime Time.

He explained that the NNPC Ltd will keep the country’s moribund refineries in Port Harcourt, Warri and Kaduna.

According to him, it would be easier for the company to revive the refineries which has a $1.5bn funding plan for its turnaround maintenance.

“NNPC is going to be an integrated company not just an upstream company. It is an Upstream company, midstream and downstream. Of course, we will keep the refineries.

“Let’s take an example of a refinery. Let’s say there are seals that are bad in Port Harcourt refinery, they have to report to Abuja that the seals are bad. Abuja assess and realises that the scope of work is bigger than the management it will go to the Federal Executive Council.

“Now a FEC memo has to be prepared for the NNPC to go to FEC because it is beyond the approval limit of the GMD of the NNPC. By the time the FEC get to approve it and comes back of course before the contract is awarded, maybe five to six months have elapsed. More seals are bad, more things are bad, you come back again and follow the same cycle.”

He said the bureaucracy was not optimal, adding that with NNPC operating “commercially, they don’t have all these problems. They can now report within them. They don’t have to go to FEC, they don’t have to come to me as a minister. It is a company decision on how they are going to fix it.”

Sylva noted that there are options to list the NNPC on the capital market or float an Initial Public Offer.

But he said this may not happen under the current administration due to ‘time’ constraints.

He said, “Going from here, we can decide to list it, decide to float an IPO or decide to go public. That is a decision to take. Now it is a commercial entity, going from there it is a decision to be taken whether you want to privatize it or whether you want to sell it outright or you want to say, let’s privatize the whole of it and sell it as NNPC. That is also an option.

“I don’t think we (Buhari’s administration) have the time as a government to get to the point to take that kind of decision, but at least we have been able to free it from the shackles of being part of government.”

The minister further revealed that the NNPC Ltd was not modeled after Saudi Aramco.

He said the government considered the best cases around the world and came out with the best structure for the Nigerian economy.

“I don’t think they tailored it to any company or modeling it after any other company,” he added.