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45 years inception: Buhari records milestone as NNPC transforms to limited liability company

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After 45 years of its inception, the Nigerian National Petroleum Corporation (NNPC) on Tuesday recorded a milestone by transiting into a full-blown commercial entity and limited liability outfit — the Nigerian National Petroleum Company Limited.

The transitioning of the oil company is in line with the provisions of the Companies and Allied Matters Act.

With its new self-financing status, the Group Chief Finance Officer will henceforth bear additional tasks of ensuring the liquidity of the group as well as the efficient allocation of capital to its businesses based on returns and business relations.

With the unveiling of the NNPC Limited in Abuja,  President Muhammadu Buhari has scored another first in ensuring corporate governance and accountability in the company.

Buhari said the company is mandated by law to ensure Nigeria’s National Energy security.

He expressed the hope that NNPC as Africa’s largest national oil company would also support sustainable growth across other sectors of the economy and deliver energy across the world.

Persecondnews reports that the event held at the State House featured a  rendition of the theme song, ”Energy for today, Energy for tomorrow, Energy for Everyone” by an Ensemble.

According to the President, God used him to consistently play an important role in shaping the destiny of the national oil company in the last 45 years, who was Minister of Petroleum under Gen. Olusegun Obasanjo’s military administration from 1976 to 79.

Currently, Buhari doubles as the Petroleum Minister with Chief Timipre Sylva assisting him as Minister of State.

Buhari was optimistic that the NNPC Limited will sustainably deliver value to its over 200 million shareholders and the global energy community as well as operate without relying on government funding and free from institutional regulations such as the Treasury Single Account (TSA).

He said: “This is a landmark event for the Nigerian oil industry.

‘‘Our country places high premium in creating the right atmosphere that supports investment and growth to boost our economy and continue to play an important role in sustaining global energy requirements.

‘‘We are transforming our petroleum industry, to strengthen its capacity and market relevance for the present and future global energy priorities.

‘‘By chance of history, I was privileged to lead the creation of the Nigerian National Petroleum Corporation on the 1st July 1977. Forty-Four (44) years later, I was again privileged to sign the Petroleum Industry Act (PIA) in 2021, heralding the long-awaited reform of our petroleum sector.

‘‘The provisions of PIA 2021, have given the Nigerian petroleum industry a new impetus, with 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.

‘‘It will, of course, conduct itself under the best international business practice in transparency, governance and commercial viability.

‘‘Coincidentally, I, on the 1st of July 2022 authorized transfer of assets from the Nigerian National Petroleum Corporation to its successor company, the Nigerian National Petroleum Company Limited, and steered the implementation leading to the unveiling of Africa’s largest National Oil Company today.

‘‘I, therefore, thank Almighty God for choosing me to consistently play an important role in shaping the destiny of our National Oil Company from the good to the great.’’

 

Pres. Buhari at the new NNPC Unveiling

 

Assuring stakeholders in the industry that the company will adhere to its fundamental corporate values of Integrity, Excellence and Sustainability, Buhari said it would operate as a commercial, independent and viable entity at par with its peers around the world.

He lauded the National Assembly for “demonstrating uncommon courage and patriotism in the passage of PIA” that culminated in the creation of the oil company.

Minister of State for Petroleum Resources, Sylva, said with the signing of the PIA, which assures international and local oil companies of adequate protection for their investments, the nation’s petroleum industry is no longer rudderless.

‘‘From the onset of this administration, Mr. President never concealed his desire to create a more conducive environment for growth of the oil and gas sector, and addressing legitimate grievances of communities most impacted by extractive industries.

‘‘While the country was waiting for the PIA, Nigeria’s oil and gas industry lost about $50 billion worth of investments. In fact, between 2015 and 2019, KPMG states that only 4 percent of the $70 billion investment inflows into Africa’s oil and gas industry came to Nigeria even though the country is the continent’s biggest producer and the largest reserves,” he said.

Sylva expressed appreciation to the President for what he called his unparalleled leadership, steadfastness, and unalloyed support towards ensuring that the country’s oil and gas industry is on a sound footing.

The new Group Chief Executive Officer of NNPC Ltd, Malam Mele Kyari, announced that the company had adopted a strategic initiative to achieve the mandate of energy security for the country by rolling out a comprehensive expansion plan to grow its fuel retail presence from 547 to over 1500 outlets in the next six months.

He said: “The new company is endowed with the ‘best human resources one can find anywhere in the industry.’

‘‘NNPC Limited is positioned to lead Africa’s gradual transition to new energy by deepening natural gas production to create low carbon activities and positively change the story of energy poverty at home and around the world.”

It’s recalled that the Corporate Affairs Commission (CAC) had on September 21, 2021, incorporated the NNPC Limited in accordance with the Petroleum Industry Act signed by Buhari on August 16, 2021.

Under Section 53(1) of the PIA 2021, the Minister of Petroleum Resources (Buhari) is expected to ensure the incorporation of the NNPC Limited within six months of the enactment of the PIA.

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