There is no decision yet by the Federal Government as regards selling the shares of the Nigerian National Petroleum Company Limited to the public through an Initial Public Offering, The PUNCH gathered on Thursday.
An online medium had reported on Wednesday that the NNPCL missed the deadline for the launch of its Initial Public Offering, stating that this was contained in the national oil company’s latest quarterly report.
In accordance with the Petroleum Industry Act, the oil firm transitioned from a state-run corporation to a commercial venture on July 19, 2022.
NNPCL’s Group Chief Executive Officer, Mele Kyari, had during the transition ceremony in Abuja, stated that the company would be ready to launch an IPO by mid-year in 2023.
During an IPO, the shares of a firm are sold to institutional investors interested in owning stakes in that particular company.
But when contacted by our correspondent on Thursday, and asked to state what caused the delay in the IPO declaration and whether the oil firm had fixed a new date for the public offering, the Chief Corporate Communications Officer, NNPCL, Garba-Deen Muhammad, said it was not the decision of the oil company, but the government.
He was also asked to state how much was NNPCL targeting or expecting from the exercise, and how much was the share expected to sell for.
Other questions include which investment banks were underwriting the offering, and whether ordinary Nigerians could buy the shares, or whether it was meant for only accredited and institutional investors.
But in a very brief response by Muhammad, he said, “Shareholders have not decided. It’s not an NNPC decision. Government will decide when to sell, how much to sell down and at what value.”
A look into the Petroleum Industry Act 2021 showed that the shareholders of the NNPCL include the Federal Government, represented by the Ministry of Finance Incorporated and the Ministry of Petroleum Incorporated. The shares are held in equal portions by the two ministries.
This means that, in effect, the shareholders of NNPCL are the Nigerian people. The PIA was passed in 2021 with the goal of overhauling the Nigerian oil and gas industry. One of the key provisions of the PIA is the corporatisation of NNPC, which means that it will be transformed into a limited liability company.
This will allow the oil firm to operate more independently and efficiently, and it will also make it easier for the government to attract private investment in the oil and gas sector.
The PIA also stipulates that the government must sell a portion of its shares in NNPCL to the public within five years of the law coming into effect. This will allow more Nigerians to participate in the ownership of the country’s oil and gas resources.