NNPC May Sell Shares To Nigerians, Foreign Investors In 2024- Mele Kyari

The Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, has said that the Corporation will issue its Initial Public Offer to investors in the next three years.

The NNPC boss said this on Monday during a monitored interview on Bloomberg TV Global Financial News.

The development is one of the biggest outcomes of the newly approved Petroleum Industry Act on the state-owned corporation in the global market.

The legislation which will overhaul the multi-billion dollars oil industry was signed by President Muhammadu Buhari in August this year.

Speaking on the impact of the PIA on the NNPC, Kyari said the Corporation will now be run in line with the Companies and Allied Act.

However, he stated that the NNPC may not be able to offer its shares to the public by 2022 or 2023 due to some bottlenecks that have lingered over the years.

Kyari explained, “We will be in the 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 different, you need to get your books correct, you need to recapitalize, you need to shape your portfolio and many more things that you have to do until you get 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 corporation declared a profit of N287bn in 2020, which is the first time the oil giant has declared in 44 years.

Kyari had last week stated the profit was far below the NNPC’s potential.

The GMD said, “Obviously this company is changing very fast and on the fast lane, we just declared profit for the fiscal year 2020, this really means we are not just what you said.

“We are not getting ready for the IPO tomorrow, that is not exactly, that is not the situation. IPO really means this company is going to be profitable, it has a long trajectory, it has a short-term view of how things can be done better to align with the best practice in the industry.

“We are trying to see how we can relax the existing framework for energy transition that is ongoing all over the world.

“Every country is adjusting its portfolio by doing things differently in a better way and obviously in the long run, this is going to be a very great company and great companies always go for IPO.

“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 really say this company is doing great and getting an IPO means that it is going to be better than what it is today.”

Speaking on why the NNPC is taking stake in the 650,000 barrels per day of crude oil Dangote Refinery owned by Africa’s richest business man, he said one of the considerations is energy security.

He said, “We know the company is great, we have seen the numbers and we think that if we invest in the company, we are going to get back our money in the maximum of five years and of course with the potential of having a dividend within five years.

“There is nothing better than this. When it comes to buying a good refinery today on your own, you’re going to have five years before you can get to this level.

“We just saw an opportunity, every company is reshaping its portfolio, trying to see how to do things differently so that you can spread your risks and cash in on any business that is on the way to progress. We know that this refinery will do well.”

According to him, energy security has become a big deal as Nigeria is still a net importer of petroleum.

“This is the quickest way to have immediate access” to the oil produced in the refinery, the NNPC boss revealed.

He added, “We have three objectives, one of it is to have access to the petrol product that this refinery will bring out and secondly because when you do that, you know you are doing it with some kind of security in your country to make sure that you have access and control over those company and thirdly and more importantly, net market for your crude oil.

“Part of our deal is for the refinery to necessarily buy at least 300,000 barrels of oil from the national oil company. We think this is a good deal for us.”

Nigeria’s production plunged to a five-year low but Kyari said in the interview that the corporation will meet its quota by October.

Kyari said, “I think by October maximum, we will meet our quota. The reason why we have not been able to do this is very simply, managing reservoir is a very complex thing, once you shut down getting back up is not that easy, and they are not going to come back from the same sources that you expected.

“We are working with our partners to make sure that we take out some of the impediments to that, and we have seen very gradual recovery in August, the numbers are very different.

“So, we are hopeful that by October we can get back to our quota level and do much better.”

Saudi oil giant, Aramco had notified customers in a statement on Sunday that it would cut October prices for all crude grades sold to Asia by at least $1 a barrel.

In reaction, the GMD said Nigeria may not reduce prices, adding that even if it considers such, it may not be on the same scale as Aramco.

He stated, “We have a different market from them, in the sense that the demand for our petroleum is very different.

“Yes, sometimes we do react to price cuts from the Saudis, but essentially many of our customers do need our crude for many reasons, quality issues and many other considerations, and even if we do react, it might not be on the same scale as the Saudis are doing, we have never done that.”