The Nigerian National Petroleum Corporation (NNPC) will sell its shares for the first time to the public in three years, a path to raising the fund needed to sustain it as a going concern after managing to break a loss-making spell that has run it aground for roughly four decades and a half.
Mele Kyari, the corporation’s head, told Bloomberg in a video chat on Tuesday the Initial Public Offering (IPO) will help Nigeria keep pace with the global energy transition in a bid to unlock its benefits.
“IPO already means this company is going to be profitable,” Mr Kyari said.
“It has a long projectory, it has short term view of how things can be done better to align with best practices in the industry, trying to see how we can latch on the existing framework for energy transition that is ongoing all the world.”
State-owned NNPC last week announced profit in the sum of N287 billion for 2020, its first-ever since it was set up in the 1970s.
At 206.5 trillion cubic feet, Nigeria’s natural gas reserves are Africa’s biggest just like its crude deposit.
But that has not transformed into prosperity for its over 200 million citizens in a country with one of the steepest unemployment and poverty levels, which have made it a poster child for the resource curse.
The country is pursuing key reforms in oil and gas through its recently-endorsed Petroleum Industry Bill.
A contentious part of the law, a clause which, by interpretation, could bestow the sole right to import refined products on Dangote Refinery, where NNPC is eyeing 20 per cent ownership, has become a sore point that is rankling with oil marketers.
Part of the deal between the two is to ensure the corporation supplies at least 300,000 barrels out of the refinery’s 650,000 barrels per day oil needs.
“In the long run, this is going to be a great company and great companies always go for IPO.”
But there are concerns that Nigeria’s deep-seated dependence on hydrocarbons and NNPC’s large-scale reforms to drive oil exploration and refining could set the country at the back of the transition curve towards gas around the world.
Oil production in Nigeria, which currently battles a raft of insecurity upheavals from insurgency, banditry and kidnapping for ransom, hit a new low last month, touching 1.43 million barrels per day.