When the Nigerian National Petroleum Corporation (NNPC) is fully commercialised in the next few months, the corporation will no longer render free service to the federal government, the national oil company’s Group Managing Director, Mallam Mele Kyari, said yesterday. Kyari, who spoke on a national television programme, noted that from then, all services rendered to the government by the NNPC limited or its subsidiaries will come at a cost to government, including the remittance of federation crude account funds to the planned upstream commission.
He stated that the NNPC was on course towards its final incorporation, explaining that it will no longer have access to government funding, but would survive based on its internal resilience and efficiency.
President Muhammadu Buhari recently signed the Petroleum Industry Act (PIA), to pave way for the full incorporation of the national oil company as a publicly quoted company, going forward.
“First of all, the PIA is very clear that within six months, we must incorporate the NNPC as a company that is bound by the Company and Allied Matters Act (CAMA). The meaning of this is that you must be fully commercial, you must be profitable.
“It means that you will have no access to any other results, other than from your own production and your own productivity. So, that means that NNPC will be the different company that it has to be.
“Even when you render service to anyone, including the institutions of government, it must be at a fee and the PIA is very clear that even when we render service to the state, it would be at a fee. So, it’s going to be a different game,” he stated.
He stressed that although today NNPC is in a good stead, having recently declared N287 billion profit, with the assets available to it, the company can be turned into a multi-trillion naira business organisation.
Kyari said that when NNPC becomes a limited liability company, it will operate in a competitive environment, with the sole aim of making profits.
The GMD pointed out that the NNPC decided to be more transparent in its operations because of the perception of Nigerians that the company operates in a very opaque environment, explaining that even for its lenders, the condition of accountability remains sacrosanct.
“We know for sure, that historically many people have doubts about what NNPC does. Our shareholders think that we’re an opaque company, that we’re not representing them well, and that we don’t know what we’re doing and I’m sure many times you see us in the media, in the public space, in very many forums, everybody thinks that nobody knows what NNPC is doing.
“We know that trust is very essential for our business. We also know that our partners, you know, financial institutions, even commercial partners would like to see and know what we are doing, so that they can invest in our company.
“So we know that making transparency and accountability, a primary focus of our activities will serve the best interests and will also enable our partners to see what we are doing, so borrowing became easier for us,” he added.
On Nigeria’s gas expansion programme, he stated that the country hadn’t done enough investing in it, adding that COVID-19 had actually proven that gas can be more resilient than oil.
With the assent to the PIA, he explained that gas monetisation, both domestically and for export and massive investment in gas infrastructure will take the front burner to create prosperity and jobs for Nigerians.
Kyari stressed that the plan is to develop what he described as the “white structure” for gas delivery in the country, to ensures that all parts of the country under 200 km max from the trunk line, is fully hooked to the gas system.