The official unveiling took place on July 19, 2022, at the presidential banquet hall in Abuja .The company’s operations will now be regulated by the Companies and Allied Matters Act (CAMA). The legal transition, based on the new Petroleum Industry Act (PIA), took effect July 1.
The NNPC Limited was then floated with an initial capital of N200 billion, making history as the company with the highest share capital in the country. It is to become a commercially oriented and profit-driven national petroleum company independent of the government, although government bodies remain its shareholders. An audit is expected to be done annually .
NNPCL will also no longer be concerned with issues of petrol pricing and subsidies. Neither will it continue to remit funds into the Federation Accounts Allocation Committee (FAAC) such that the company’s funds can be used to further its business rather than issuing national payouts.
According to President Buhari, the provisions of PIA 2021 have given the Nigerian petroleum 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.
The company is expected to launch an initial public offering (IPO) by the middle of next year. This is to enable diversification of the shareholders to include institutional and retail investors. The public will be able to buy shares after the launch. Kyari stated that the privatisation of NNPC will foster energy security in Nigeria as an expansion plan to grow its fuel retail presence from 547 to over 1500 outlets within the next six months has been made.
According to the Petroleum Industry Act (PIA), the Nigerian National Petroleum Corporation (NNPC) will cease to exist in the next six months and all assets and liabilities are to be transferred to NNPCL with the exclusion of some assets found toxic according to PIA. NNPCL Is expected to pay taxes, royalties, and dividends to its shareholders.
To achieve this strategic requirement, four committees were set up by the Board of NNPC Limited, comprising, the Board Establishment Committee (BEC), Board Finance, Strategy, and Investment Committee (BFSIC), Board Sustainability Committee (BSG) and Board Audit Committee (BAC). The board committees are expected to carry out oversight functions of planning and implementation of the company’s strategy and to define a framework for measuring and monitoring the performance of the company.
However, there are different concerns raised by Nigerians regarding the effectiveness of the change due to the government retainment of major stake and virtual regulations still handled by the ministries of finance and petroleum rather than been privatised. Expectations are raised as we look forward to the result the organization will record in some months time.