Corporate governance, accountability, enhanced value in focus as NNPC transitions to corporate entity −AEC

*African Energy Chamber commends Mele Kolo Kyari and his team for having done ‘an amazing job’ as this transition will allow Nigeria’s petroleum industry to uphold the highest levels of professionalism and innovation for strategic engagements globally

Gbenga Kayode | ConsumerConnect

African Energy Chamber (AEC) says it wholeheartedly welcomes and supports the recent inauguration of the Nigerian National Petroleum Company (NNPC) Limited as a commercial entity in the West African country’s economy.

ConsumerConnect reports the AEC noted that the new NNPC is poised to reshape the oil and gas industry in the West African country, and serve as a model for other National Oil Companies all over the world.

Recall President Muhammadu Buhari July 19, 2022, launched the transition from the former NNPC Group to NNPC Limited in the Presidential Villa, Abuja, FCT, in accordance with the provisions of the Petroleum Industry Act (PIA) 2021.

The Chamber in a recent market update made available to this publication congratulated the Company on its official transition to a private entity.

The process has initiated a monumental shift in active engagement, accountability and value that is expected to reshape Nigeria’s petroleum industry, stated the AEC.

Besides, the Chamber described the new commercial entity as a model for other National Oil Companies on the African continent.

According to the Chamber, this transition will create a significant departure from the company’s previous operations, whereby major decisions had to be made based on the Federal Executive Council’s (FEC) approval.

The new status, the AEC noted, would exalt NNPC Limited with higher expectations around regulatory compliance, active engagement with stakeholders, and perhaps most significantly, accountability.

It further stated: “This is the beginning of something new.

“(Malam) Mele Kolo Kyari and his team have done an amazing job towards this implementation.

NJ Ayuk, Executive Chairman of AEC, said: “The strategic importance of this transition will allow Nigeria’s petroleum industry to uphold the highest levels of professionalism and innovation while allowing the company to operate in strategic engagements globally.”

Ayuk also stated: “Rather than rushing into the elimination of oil and gas, NNPC and Nigeria will now be able to more nimbly, transparently, and efficiently take advantage of its hydrocarbons and natural resources to bring more value and wealth to the country and its people.”

It is also noted the creation of the NNPC Limited followed a decrease in crude oil production in 2022, compared to the same six-month period in 2020 and 2021.

Besides, it is expected to place greater emphasis on corporate governance and operational excellence – fast-tracking development and bring the country back to the top of African oil production levels.

In a move to achieve these goals, four committees were established to provide oversight of the entity’s functions of planning and implementation and define a framework for monitoring the Company’s performance.

These committees include the Board Establishment Committee; the Board Finance, Strategy, and Investment Committee; the Board Sustainability Committee; and the Board Audit Committee.

The launch of NNPC Limited, which allows the company to become listed on the stock exchange with the sales of its shares now available to the public, positions the company on the same operational level as other successful state-owned petroleum corporations, such as Brazil’s Petrobas and Saudi Arabia’s Aramco, said the AEC.

The Chamber stated that the new, innumerable opportunities that this structuring will bring to Nigerians, Africans, and international investors and stakeholders will be showcased at this year’s African Energy Week (AEW) 2022.

ConsumerConnect reports the event holds October 18-21, in Cape Town, South Africa, and it is exhibiting NNPC Limited as the Company of tomorrow.

AEW is the AEC’s flagship interactive exhibition and networking event that seeks to unite African energy stakeholders, drive industry growth and development, and promote Africa as the number one destination for African-focused events for the future of the continent’s energy sector.

Over 200million Nigerians own NNPC, says Kyari

In a related development, Malam Mele Kyari, Group Managing Director/Chief Executive Officer (GMD/CEO) of NNPC Limited, has restated that the National Oil Company recently experienced a complete turnaround of its fiscal and regulatory framework in the oil and gas sector of the economy.

Kyari, who stated this while featuring in a recent interview on Arise TV, said: “That brings with it another layer of control such as governance issues that’s common to all other businesses.

“So, it’s a brand new situation, but we are not rebranding. You’re moving from a past that’s clearly of a definite and different expectation to a new expectation where this company must deliver value to its shareholders.”

He further disclosed that all Nigerians are the shareholders in the new system of the NNPC Limited, but represented by the Ministries of Petroleum and Finance respectively.

Kyari also noted: “NNPC is owned by the over 200million Nigerians. We are the shareholders of the NNPC.

“The shareholders are always represented. And in this context, it’s now represented by the Ministry of Petroleum (incorporated) and the Ministry of Finance (incorporated) on behalf of the rest of the Federation. That’s on behalf of all of us.

 

 

The NNPC Chief added: “The Federation includes the state and the local governments, and by implication, the whole body of the 200 million Nigerians. But all of us cannot sit in the board of this company.

“The Petroleum Industry Act has clearly indicated that the President is delegated with the responsibly to appoint a board on behalf of the 200 million shareholders, to appoint the leadership of this Company and to also appoint Board of Directors for this Company.”

 

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