Stakeholders believe that things are set to improve even more now that the corporation has completely transformed into a commercial entity, given the notable advancements the Nigerian oil sector has had since the Petroleum Industry Act’s introduction in 2021.
“BOLD means to Be Open to Lots of Developments – Byron Pulsifer”
NNPC Limited is a dynamic global energy company with businesses and operations across the entire spectrum of the energy value chain.
The Nigerian National Petroleum Company Limited (NNPCL) marked two years of becoming a business whose operations are governed by the Companies and Allied Matters Act on Friday, July 19, 2024
Following the Petroleum Industry Act of 2021’s enactment, the Nigerian National Petroleum Corporation changed into a CAMA business.
For NNPC Ltd. and the management team led by Group Chief Executive Officer Mallam Mele Kyari, the signing of the Petroleum Industry Act (PIA) by former President Muhammadu Buhari in August 2021 changed everything because it allowed for even more substantial reforms within the national oil company.
Its vision is to be the dynamic global energy company of choice while its mission is to reliably deliver energy while continuously creating value for all stakeholders. Its strategy is focused on growing the global energy delivery capacity
After the Company and Allied Matters Act (CAMA) business was unveiled in 2022 and incorporated into the Petroleum Industry Act (PIA), the stage was set for a restructured national oil company that could contend with competitors throughout the world.
Many acknowledged that the former NNPC had a less-than-stellar history before the PIA’s passage because of what appeared to be a decline in trust in the organization’s management. However, once the PIA’s implementation began under the GCEO’s direction, that opinion evolved.
In 2020, the NNPCL turned a profit after tax of N287 billion, marking the first time in its 44-year history that the firm had turned a profit. This increased to N674 billion in 2021 and then to N2.52 trillion in the fiscal year 2022–2023.
Stakeholders believe that things are set to improve even more now that the corporation has completely transformed into a commercial entity, given the notable advancements the Nigerian oil sector has had since the Petroleum Industry Act’s introduction in 2021.
Notably, Kyari put up a great deal of effort to secure the PIA’s passage. This programme aims to restructure the nation’s energy laws, de-regulate the industry, remove government oversight from the oil sector, and unbundle the oil firm.
To ensure that there are no justifications for failure, the PIA’s enactment in 2022 gave rise to a revitalised NNPCL, granting it the same operating privileges as any other private corporation in Nigeria. This included exemption from the Public Procurement Act, the Fiscal Responsibility Act, and the Treasury Single Account.
The NNPCL made history as the business with the highest share capital in the nation when it was registered with the Corporate Affairs Commission and launched with an initial capital of N200 billion.
The management of the NNPC has taken proactive measures to realign its operations between the time the PIA was signed into law in August 2021 to the present.
To understand the effects of the changes the PIA brings about, for example, multiple engagements were held with the NNPCL, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the Nigerian Upstream Petroleum Regulatory Commission, the Ministry of Petroleum Resources, the Ministry of Finance, governors, legislators, host communities, and other important stakeholders.
To further revitalise the previously unproductive company, Kyari introduced additional investment benchmarks after reaching this milestone. The NNPCL acquired OVH in September 2022, two months after it became a CAMA firm. This allowed it to expand its asset base, which now included 12 warehouses, eight LPG plants, three lube blending plants, three aviation depots, and a reception jetty (ASPM) with a capacity of 240,000 MT per month.
In addition, NNPCL now has the most fueling stations in Africa after Oando’s 380 fueling stations were added to its current network. By the agreement, NNPCL was able to take advantage of Oando’s presence throughout Africa and grow into a major energy provider.
The acquisition demonstrated the GCEO of NNPCL’s desire to establish the business as a major player in the international energy industry. In addition to this agreement, the NNPCL under Kyari signed an additional agreement with four National Oil Companies in June of last year for the $25 billion Nigeria-Morocco Gas Pipeline Project.
The Société Nationale des Opérations Pétrolières of Cote d’Ivoire (PETROCI), the National Oil Company of Liberia (NOCAL), the Société Nationale des Hydrocarbures of Benin (SNH-Benin), and the Société Nationale des Pétroles of the Republic of Guinea (SONAP) signed these tripartite Memorandums of Understanding on behalf of the Nigerian National Petroleum Company Limited (NNPC) and the Office National des Hydrocarbures et des Mines (ONHYM) of Morocco, respectively, and thereafter.
The Federal Government of Nigeria and the Kingdom of Morocco came up with the idea for the Nigeria-Morocco Gas Pipeline (NMGP) Project during King Mohammed VI of Morocco’s visit to Nigeria in December 2016.
The project’s pipeline cooperation agreement was completed and signed in 2017.
The project’s pipeline spans 1,700 km (onshore) from Dakhla, Morocco, to Northern Morocco, and 5,300 kilometres from Nigeria to Dakhla, Morocco.
The pipeline capacity for the project is 30BCM per year which is equivalent to 3.0 BSCFD
Already, MoUs have been executed for the project with ECOWAS, SMH of Mauritania and Petrosen of Senegal.
With his perseverance, Kyari made sure the contract went through. The project’s objectives are to diversify Nigeria’s gas export routes, eliminate gas flaring, and make money by commercialising the country’s rich natural gas resources.
Along with helping to supply gas to Morocco, the 13 ECOWAS countries, and Europe, the project will also help to integrate the economies of the Sub-region, raise living standards, create wealth, and reduce poverty. It will also help to combat desertification by providing a sustainable and reliable gas supply, as well as opening up opportunities for other countries along the pipeline route to develop and export their gas.
When the project is finished, it will improve the monetization of the impacted African nations’ natural gas resources and provide a fresh export path to Europe.
The agreement represents yet another significant turning point in the fight against energy poverty, which has been impeding Africa’s ability to lead the continent’s industrialization.
As a for-profit company, the NNPCL under Kyari views this project as a chance to capitalise on Nigeria’s plentiful hydrocarbon resources by increasing energy access to promote industrialization, economic expansion, and the creation of jobs throughout Africa and beyond.
In 2023, Kyari’s influence on the oil and gas industry persisted as the Nigerian petrochemical industry received $7 billion in new investments from India through NNPC Ltd. President Bola Tinubu travelled with Kyari to India, where the agreement was announced.