The proposed successor company of the Nigerian National Petroleum Corporation (NNPC), which would be known as NNPC Limited, may not be ready for an Initial Public Offer (IPO) till 2024.
Group managing director of the NNPC, Mallam Mele Kyari, stated this during an interview with Bloomberg Television yesterday.
According to him, a lot of arrangements still needed to be put in place before any such move could materialise.
By the provision of the new Petroleum Industry Act (PIA), the 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.
“Surely, it is not what we will do in 2022 or 2023, probably the earliest consideration will be in three years’ time,” the GMD stated.
He reiterated that the corporation’s involvement in the Dangote refinery was to ensure energy security as well as tying down markets for Nigeria’s crude oil.
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.”