The Nigerian National Petroleum Corporation (NNPC) is considering selling shares for the first time to the public in three years.
Profits for this company have been down for about four and a half decades, and the corporation has decided to eliminate any additional debt by undergoing a debt-equity swap.
Kyari’s quoted as saying that the IPO will help Nigeria keep pace with the global energy transition in a bid to unlock its benefits.
“The IPO already means this company is going to be profitable,” Mr. Kyari said.
“It’s long term. It covers short-term issues like how to implement things better, how to align with current industry best practices, and looks at the broader picture of how we can further our transition to renewable energy.”
The Nigerian National Petroleum Corporation (NNPC) announced that it made a profit of N287 billion in 2020, the first time in its 42-year history.
Nigeria’s natural gas reserves are Africa’s largest, just like its crude deposit (206.5 trillion cubic feet).
The country is one of the world’s great natural resources, but that has not translated into sustained prosperity for its people in a country where the unemployment and poverty levels have made it a poster boy for the resource curse.
The government is undertaking measures to reform the country’s oil and gas sector and also oil and gas reforms are an important part of the country’s efforts to increase oil production capacity.
A thorny section of the law, a phrase that, if interpreted correctly, might give NNPC exclusive rights to import refined products from Dangote Refinery, where NNPC is targeting a 20% stake, has enraged oil dealers.
In the contract, the corporation agrees to buy at least 300,000 barrels out of the refinery’s 650,000 barrels per day oil needs..
If you look at the long-term fundamentals of this company, it’s clear that the company’s future is bright. A successful IPO seems inevitable.
But there are also 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.