How Kyari’s NNPC Is Unfolding Into A Commercial Entity

In a bold determination towards launching its making its mark as a commercial entity, the Nigerian National Petroleum Company, NNPC recently obtained a $5 billion facility from the African Export Import Bank (AFREXIM Bank) to fund major investments in the country’s upstream sector.

This fund raise is in response to President Muhammadu Buhari’s assent of the Petroleum Industry Bill in August 2021, under which the NNPC was re-incorporated as a commercially oriented limited liability company. The $5 billion they raised will now allow them to acquire and operate producing oil and gas assets in Nigeria.

According to the NNPC “The bank agreed to play a finance advisory and fundraising role in order to raise $5 billion for the “acquisition, investment, and operation of energy” producing assets in Nigeria as part of NNPC’s growth strategy following its incorporation as a limited liability company.”

“Afreximbank will also underwrite $1 billion as part of the landmark transaction as part of the forward sales base trade finance transaction.”

“The NNPC and Afreximbank also explored the innovative idea of establishing a pan-African Energy Transition Bank and agreed to collaborate toward achieving the goal.

This and other laudable achievements by the Kyari led NNPC no doubt would guarantee affordable and reliable energy for rapid industrialisation and improvement in the economic well-being of the people.

This manifested recently as skeptics were put to shame in the face of panic buying of petrol over rumours of impending removal of subsidy.

A statement by the NNPC spokesperson, Garba Deen Muhammad on the issue said the company has sufficient petrol stock to meet the need of Nigerians.

He said, “The NNPC wishes to assure the public that the company has sufficient PMS stock to meet the needs of Nigerians.”

“The public is therefore advised not to engage in panic buying of petrol; and to ignore all rumours that may suggest otherwise,” the statement said.

He said “in line with the existing laws of the land, NNPC Ltd. is deeply committed to ensuring energy security for the country.”

In the face of all the achievements, stakeholders say more prospects await the NNPC as a commercial entity.

According to an oil and gas expert, Charles Okoh, ‘‘The passage of PIA was undoubtedly the most profound event in the Nigerian and gas space in the last 20 years. As a national oil company, the NNPC was at the forefront and provided the stimulus for the executive and the legislature to successfully midwife the passage of the Petroleum Industry Bill (PIB) into law (Petroleum Industry Act 2021). Theis passage of this law is envisaged to foster investment in the industry and delineate responsibilities to the various institutions,’’ said Okoh.

He lauded NNPC on the incorporation of NNPC limited under CAMA and Entrenchment of Transparency, Accountability and Performance Excellence (TAPE).

 ‘‘This strategy is designed to make NNPC more operationally transparent and accountable, benchmark NNPC against established global best practices and established the right cost optimization structure among other derivatives.’’

Commendations also came as NNPC and its partners in the Brass Fertilizer and Petrochemical Company Limited (BFPCL) namely DSV Engineering Limited and Nigerian Content Development and Monitoring Board (NCDMB) took the Final Investment Decision (FID) for the construction of first ever methanol plant in Nigeria at the cost of $3.6 billion in 2021.

 Adedapo Ojo, an oil and gas expert said, ‘‘2021 ,witnessed the execution of a US$260m Funding Agreement for ANOH Gas Processing Company Limited (AGPC) among the NNPC, Seplat and a consortium of seven banks.’’

He added: ‘‘The long quest for the rehabilitation of the nation’s refinery kicked off with the award of the Engineering, Procurement, and Construction (EPC) contract for the Port Harcourt Refinery, after a competitive and transparent bidding process, to Tecnimont spA of Italy.’’

Similarly, Chairman of Finix Oil Limited, Habib Umar, said, ‘‘ In 2021, NNPC signed a gas development deal with Sterling Oil Exploration and Production Company (SEEPCO) to unlock 1.2Trillion Cubic Feet (TCF) of gas in September 2020. The gas commercialization strategy for OML 143 is in line with the Federal Government’s National Gas Expansion Programme (NGEP). NNPC entered into a suite of agreements with partners (Shell, Total, Exxon and Eni) on OML 118 to pave way for the renewal of the PSC for an additional 20 years.’’

 ‘‘NNPC partnered China Machinery Engineering Company (CMEC) and General Electric (GE) to execute Engineering, Procurement Construction (EPC) contract for the procurement of equipment for a 50 MW Emergency Power Project in Maiduguri, Borno State. NPC also posted N287 billon Profit. Aside the PIB passage, this arguably, is the biggest landmark achievement for the NNPC.’’

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