NNPC Considers New Approach Towards Achieving Energy Transition

Yemisi Izuora

The Nigerian National Petroleum Company Limited, NNPC, is conceptualising a practically acceptable measure that will provide an environmentally friendly approach to the country’s energy transition initiative.

The Group Managing Director of the Company, Mr. Mele Kyari, expressed the hope that the transitioning of the Company in line with the provisions of the Companies and Allied Matters Act will position it to close the energy gap in Nigeria.

Kyari said this on Thursday at the African Finance Corporation infrastructure solutions summit held in Abuja.

By July 1 this year, the Nigerian National Petroleum Company Ltd will fully transform into a Company whose operations will be regulated under the Companies and Allied Matters Act.

The NNPC’s transformation into a CAMA company follows the implementation of the Petroleum Industry Act.

The Corporate Affairs Commission had on September 21 last year completed the incorporation of the NNPC Ltd in accordance with the provisions of the Petroleum Industry Act 2021.

The PIA was signed into law by President Muhammadu Buhari on 16th August, 2021, following its passage by the National Assembly in July of the same year.

Section 53(1) of the Petroleum Industry Act 2021, requires the Minister of Petroleum Resources to cause for the incorporation of the NNPC Limited within six months of the enactment of the PIA in consultation with the Minister of Finance on the nominal shares of the Company.

With the registration by the CAC, the NNPC Ltd was floated with an initial capital of N200 billion making history as the company with the highest share capital in the country.

Between when the PIA was signed into law in August last year and now, the management of the NNPC has taken proactive steps to prepare it for the July 1 take-off as a CAMA company.

Kyari said that the NNPC is the largest oil and gas company in Africa adding that the transitioning has provided more opportunity for the National oil company.

He said, “NNPC is the largest Oil & Gas company on the continent. We are going to become a fully private company in a month or two. This means that we’ve an opportunity to use this huge company to provide energy and close the energy gap in Africa.”

On energy transitioning, the GMD said that the concept is not about stopping hydrocarbons but about being carbon neutral thereby minimizing the impact on the environment.

He said, “Energy transition is not about stopping hydrocarbons but about being carbon neutral thereby minimizing the impact on the environment

“What African countries can do today is to insist that there must be #EnergyJustice. There must be a different approach to the same problem we are all facing.”

The energy industry is currently facing increasing demands to clarify the implications of energy transitions for their operations and business models, and to explain the contributions that they can make to reducing greenhouse gas emissions so as to achieve the goals and commitments of Paris Accord and COP 26.

Nigeria is pursuing energy transition in order to promote economic growth and is gradually investing in renewable energies, primarily solar so as to reduce carbon emissions whilst continuing to exploit hydrocarbon resources, especially natural gas which is the energy transition fuel for Nigeria.

During the COP26 summit in Glasgow, President Muhammadu Buhari had pledged that Nigeria would cut its carbon emissions and reach net-zero by 2060, underlining the key role of gas in the country’s energy transition roadmap.

While nations such as the United Kingdom, the United States, and the European Union have set targets to achieve net-zero by 2050, Nigeria has opted to join Saudi Arabia and Russia in vowing to reach net-zero by 2060.

This target is lagging 10 years behind the recommended deadline, which the UN along with many climate scientists would like to achieve to stop global warming.

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