Yemisi Izuora
The Nigerian National Petroleum Company Limited (NNPC Ltd) is planning to sell stakes in some of its oil and gas assets and has already called for bids.
Quoting an invitation document, it stated that interested bidders must register online by January 10, after which pre-screening will follow and qualified firms will gain access to a secure virtual data room.
But two of Nigeria’s influential oil sector unions had in September this year strongly opposed the government’s reported plans to divest significant stakes in joint venture assets managed by the NNPC.
Specifically, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) had warned that such moves could destabilise the economy, weaken the oil industry, and jeopardise the welfare of workers.
Both organisations rejected the proposal to cut government stakes in Joint Venture (JV) assets by as much as 30–35 per cent. Currently, the federal government holds between 55 and 60 per cent of such assets through the NNPC.
According to the invitation document, prequalification will be based on technical and financial capacity, followed by document evaluation, negotiations and regulatory approvals.
Nigeria has struggled to boost crude output and attract investment and is targeting incremental growth through production from marginal onshore fields vacated by international firms.
Also, the NNPC is discussing $2 billion in financing from Nexus Alliance, a company that supports pipeline infrastructure, according to people with knowledge of the matter, Bloomberg reported yesterday.
Nigeria’s over 5,000 kilometres oil and gas pipeline network, once the backbone of the country’s energy export and domestic supply system, has long suffered from extensive inoperability and disruptions caused by repeated vandalism, theft, sabotage and infrastructure decay.
A number of major pipelines that transport crude from producing fields to export terminals, and natural gas to power plants and LNG facilities, are frequently out of service or operating below capacity.
Despite recent improvements in security, underinvestment, ageing infrastructure and the persistent threat of vandalism mean that many pipelines remain vulnerable and intermittently inoperable, with direct consequences for Nigeria’s oil output, export earnings and domestic energy supply.
However, the report noted that the state-owned oil producer expects to receive the funds early next year and will use the money to repair and upgrade pipelines damaged by theft and vandalism while reducing leaks.
The NNPC has sought fresh capital in recent months as part of a broader refinancing effort, including discussions with lenders based in Saudi Arabia, according to the people.
The company, which aims to lift oil output to at least 1.8 million barrels a day and increase gas production, targets to attract investment of $30 billion by 2027, one of the people told Bloomberg. It expects to get halfway to that goal in 2026.
NNPC has a longstanding ambition to sell shares via an initial public offering and is trying to improve transparency and accountability to make progress towards that goal.
Oriental News Nigeria, reports that PIA 2021 mandated the transition of the Nigerian National Petroleum Corporation (NNPC) into the Nigerian National Petroleum Company Limited (NNPC Limited), a commercially oriented limited liability company operating under the Companies and Allied Matters Act (CAMA).
This transformation fundamentally changed the organisation’s structure and role and the NNPC Limited is expected to operate as a commercial, profit-making entity without relying on government funding or subventions.
The previous NNPC held both commercial and regulatory responsibilities. The PIA separated these roles, creating two new independent regulatory bodies: the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
As a limited company, NNPC Limited is subject to corporate governance rules, required to publish audited annual reports, pay taxes and royalties, and potentially declare dividends to its shareholders (initially the government).
The company is exempt from certain public sector regulations like the Public Procurement Act, the Fiscal Responsibility Act, and the Treasury Single Account, allowing for more operational efficiency and speed in commercial transactions.
Our Correspondent also provides further insights that the new structure allows NNPC Limited to raise capital from its operations and potentially go public through an Initial Public Offering (IPO) in the future, similar to international national oil companies like Saudi Aramco.
Essentially, the PIA conferred the right upon the former NNPC to become a limited company to foster transparency, efficiency, and investment in Nigeria’s oil and gas sector.