President Muhammadu Buhari on Tuesday formally unveiled the Nigerian National Petroleum Company (NNPC) Limited and declared it free from institutional regulations.
How does this impact the NNPC’s operation?
According to the president, the provisions of the Petroleum Industry Act (PIA) 2021 have given the industry a new impetus, with an improved fiscal framework, transparent governance, enhanced regulation, and the creation of a commercially-driven and “independent national oil company” that will operate without relying on government funding and free from institutional regulations such as the Treasury Single Account, Public Procurement, and Fiscal Responsibility Acts.
How about checks on its activities?
The new entity will be run as a public liability company limited by shares, and its operations will be regulated by the Companies and Allied Matters Act (CAMA). Noting that the government’s objective with the reform is to strengthen the industry’s capacity and market relevance for current and future global energy priorities, Buhari reiterated that the NNPC Limited will “conduct itself under the best international business practice in transparency, governance, and commercial viability”.
Buhari also noted his authorization of the transfer of assets from the former ‘Nigerian National Petroleum Corporation to its successor company, the Nigerian National Petroleum Company Limited. Following the enactment of the PIA in September 2021 and the unveiling of the new entity, shares of the company will be made available to the interested public (Initial Public Offering, “IPO”) from 2024, according to the company’s head, Mele Kyari.