Kyari, who revealed this when he appeared on Global
Financial News on Bloomberg Television, noted that the national oil company,
which would operate under the Companies and Allied Matters Act (CAMA), would
only be able to issue its Initial Public Offering (IPO) to investors in the
next three years.
However, against the backdrop of declining global investment
in the oil and gas sector, Minister of State for Petroleum Resources, Chief
Timipre Sylva, yesterday called for the establishment of an African Energy Bank
to help boost business activities in Africa’s oil and gas sector.
By the provisions of the new Petroleum Industry Act (PIA),
NNPC, as currently constituted, is expected to transition into a fully
commercialised business concern in which the public could own shares and take
part in its major decisions.
The NNPC helmsman explained that the books of the NNPC would
need to be to be properly cleaned up, with the proposed NNPC Limited
recapitalised, before embarking on such a huge business decision.
Kyari stated, “We will be in a 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 differently, you need to get your
books correct, you need to recapitalise; you need to shape your portfolio and
many more things that you have to do until you get the 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 NNPC GMD maintained that the corporation was currently
in a good stead with the declaration of its first profit in 44 years. He added
that the IPO would put NNPC in an even better position in the oil and gas
space.
Kyari said the corporation was concerned about the global
transition towards renewable sources of energy, pointing out that the NNPC is
in the process of adjusting its portfolio to meet future challenges.
He said, “Obviously, this company is changing very fast and
on the fast lane. We just declared profit for the fiscal year 2020. We are not
getting ready for the IPO tomorrow, that is not exactly 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 practices in the industry.
“We are trying to see how we can rework the existing
framework for energy transition that is on-going 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 can really say this company is doing
great and getting an IPO means that it is going to be better than what it is
today.”
Kyari reiterated that the corporation’s involvement in the
Dangote refinery, for which it is paying about $2.7 billion, was to ensure
energy security as well as tie down markets for Nigeria’s crude oil.
“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
their 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.”
The GMD listed the three goals for the government’s
involvement in Dangote refinery to include access to petroleum products, some
level of control over the company, and, most importantly, net market for
Nigeria’s 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,” he stated.
On Nigeria’s inability to meet its production allocation by
the Organisation of Petroleum Exporting Countries (OPEC), Kyari said the
country would fill the shortfall by October.
He stated, “I think by October maximum, we will meet our
quota. The reason why we have not been able to do this is very simple, 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.”
He explained that Nigeria was not considering cutting prices
for its oil, as being planned by Saudi Aramco, saying the demand for Nigeria’s
petroleum is still very competitive.
Kyari noted, “Essentially, many of our customers need our
crude for many reasons, quality issues and many other considerations. Even if
we do react, it might not be on the same scale as the Saudis are doing. We have
never done that.”
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