The Nigerian National Petroleum Corporation (NNPC) is targeting 2024 for its first equity sales to new investors as the state-oil firm prepares for commercialization.
According to the corporation’s Group Managing Director, Mele Kyari, the earliest the corporation can issue its Initial Public Offer (IPO) to investors is in three years time.
Kyari, who spoke on on Bloomberg TV Global Financial News, said the corporation would now be operated in line with the Companies and Allied Act.
President Mohammadu Buhari last month signed into law the Petroleum Industry Act (PIA) 2021, which made provisions to transform the state-owned oil firm to profit making business outfit.
However, he stated that the NNPC may not be able to offer its shares to the public by 2022 or 2023 due to certain bottlenecks that had lingered over the years.
“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 recapitalise; 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,” Kyari told the global news agency.
President Buhari had recently announced that the corporation declared its first profit in 44 years, which may be its first step toward commercialization, but Kyari had stated the profit fell far below the NNPC’s potential.
“Obviously this company is changing very fast and on the fast lane. We just declared profit for the fiscal year 2020.
“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.”
The oil firm is proposing to invest about $2.7 billion to acquire 20 percent stake in thhe yet-to-be completed Dangote Refinery, which is expected to refine about 650,000 crude daily.
The corporation said the investment in the privately owned petroleum refinery was intended to guarantee energy security for the country.