#NNPC: All You Need To Know About The ‘New NNPC’ (Now Private Company) Unveiled By President Buhari
On Tuesday, Nigerian president, Major General Muhammadu Buhari (retd.) announced that the Nigerian National Petroleum Company NNPC Limited is now a private company.
Hee made this known to Nigerians at the Presidential Villa, Abuja.
According to him, the oil firm was henceforth free from institutional regulations and who would from now on conduct itself under best international business practice.
President Buhari also unveiled the new identity and logo for NNPC which is now a limited liability company.
The new identity has transformed the NNPC Ltd into a commercially driven and independent entity, with the responsibility to declare dividends to its shareholders.
While making this declaration, President Buhari expressed delight he had consistently had the opportunity to shape the course of the petroleum industry in Nigeria.
He went on to thank the National Assembly for facilitating the passage of the Petroleum Industry Act (PIA), which had been in the works over different administrations but only came to reality during the current administration.
It was also revealed that “NNPC: Energy for today, Energy for tomorrow.” is the new motto of the oil company.
ALL YOU NEED TO KNOW ABOUT THE “NEW NNPC”
Meanwhile, the Nigerian National Petroleum Company Limited has announced following its latest transition from a public corporation to a limited liability company, it no longer remit any money to the Federation Accounts Allocation Committee for sharing to the three tiers of government monthly.
According to the company, it currently owed no money to FAAC, as all monetary arrears to the committee were owed by the old corporation and not the new oil company.
This was revealed by the Chief Executive Officer, NNPC Limited, Mele Kyari, to journalists on the sidelines of the unveiling of the new oil company.
Responding to a question on what would happen to NNPC’s monthly FAAC contributions, kyari replied, “We are now a private company; would MTN go to FAAC?”
On if there would be no more FAAC remittances from the company going forward, he said;
“We will pay our taxes, royalties and deliver dividends to our shareholders.”
Asked about the arrears to FAAC that were not delivered by the firm over the years, the CEO said, “Which arrears? That’s Nigerian National Petroleum Corporation.”
On what NNPC transition implies, Kyari said;
“You now have a smarter, more responsive and much more accountable company that must act within the premises of all regulations that are in Nigeria for private companies.
“It must also meet the standards of best practice in every industry in terms of governance, complying with regulations and beyond these, eyes are on the ball that your shareholders are expecting you to deliver value to them.
“That value must translate in two forms. One is that they must see dividends and the second part is that you must deliver energy in this country. This company is now in a position to do both of them because it is now a nimble company, can act, borrow and return peoples money quickly.”
Kyari added;
“I am sure Nigerians will see a very different company in the coming days and months. And we are convinced that by the mid of next year this company will be IPO ready,”
IPO ready means that you have systems and processes lined on the side of profitability and is a company that is accountable to its shareholders and stakeholders.
“Simply that is what IPO processes look for; to see that you have the assets. Today government has transferred those assets to NNPC and we have very ample assets that nobody has in this country and, of course, not even in Africa.”
On how the oil firm would handle subsidy on petrol being a commercial entity, Kyari said;
“Subsidy is not NNPC’s burden. Subsidy is the decision of the state and in every jurisdiction anywhere in the world, countries see them differently. In some countries, they put petroleum tax on top of the market price of these products.
“So when decisions are to be made in some jurisdictions they will reduce the level of taxation. That also is another form of subsidy. In some countries, you have zero taxation but you will pay the market price for the commodity. That also in a way, in fiscal system, looks at it from a subsidy point of view.
“In very many countries, a leader can decide that I don’t even want my countrymen to buy it at the market price. I’m ready to reduce that price for them so that they can buy.”
“In either case, whichever way the decision and the policy of the state decides, you know NNPC is there in the space to provide the product to the state at commercial value and, of course, it is also our duty to deliver to the customer at the price that the state wants.
“So it is no longer an NNPC issue. NNPC will have no issue with this. NNPC will be happy to supply because we will now see the state as our customer.”
Speaking further, he revealed that NNPC had no need for a sovereign guarantee.
According to him, lenders would only ask for such when the company seeking the loan lacked access to its assets.
He said;
“Today the assets are in our books and have been transferred to us. That is what banks are looking for, and that is the reason why they ask for a sovereign guarantee,”
While denying claims that the company’s workforce was bloated, the NNPC boss stressed that “today our total population is just 7,000 and I believe that with the expansion we have in the plan we are going to get more people to work for us.
“The law has also provided that no one is going to leave this company. Everybody’s work is preserved, their benefits are preserved. So there is no matter of concern for the employees of this company.”
