Page 4 - LatAmOil Week 30 2022

LatAmOil COMMENTARY LatAmOil

Nigerian officials have often cited Petrobras as an example of a successful NOC

Should Brazil copy Nigeria?

The head of Nigeria’s NNPC Ltd is touting his company’s plan to distance itself from government

policy on domestic fuel pricing, while Petrobras continues to set prices and incur the state’s wrath

FOR at least 15 years, Nigeria’s government has country’s newly adopted Petroleum Industry
been holding Petrobras as an example of a truly Act (PIA) – was unveiled in a splashy five-hour
WHAT: successful national oil company (NOC) and ceremony.
Kyari, the CEO of NNPC saying that it hoped to see Nigeria’s own NOC, Those present at that ceremony – including
Ltd, says handling fuel Nigerian National Petroleum Corp. (NNPC), Muhammadu Buhari, the president of Nigeria,
imports for a fee will help replicate the Brazilian major’s success. and Mele Kyari, the former group managing
distance the new compa- Granted, NNPC has not been able to match director of NNPC, now serving as group CEO
ny from political fights.
Petrobras’ great stroke of luck in the form of of NNPC Ltd – stressed that the new company
WHY: the massive offshore pre-salt discoveries in the would be different from its predecessor. They
The new policy is part Santos and Campos basins. Nigeria does have pointed out that the new entity was designed
of a move to introduce sizeable offshore oil and gas reserves, but not on to function as a corporation and not as an arm
corporate management the same scale as those that have allowed Brazil of the government, noting that it would not
practices. to push output up more than 1.5mn barrels of oil have regulatory authority, would not distribute
equivalent per day (boepd) since the first finds budget funds such as gasoline subsidies and
WHAT NEXT: in the pre-salt zone in 2005. would have to compete with private operators
Petrobras might be able NNPC is, however, taking steps to move for new contracts. These changes, they said, will
to handle a fee-for- closer to Petrobras’ management model, which make NNPC Ltd more transparent, more effi-
service model, since it officials in Abuja view as one of the key drivers cient and more capable of sustaining itself.
is shifting its focus to of its success. On July 19, the Nigerian NOC’s In other words, they emphasised the fact that
upstream operations, but successor – Nigerian National Petroleum Co. the new company would be managed like a cor-
NNPC Ltd might be less Ltd (NNPC Ltd), formally incorporated last poration – rather like Petrobras, even if they did
successful. September in line with the provisions of the not use that exact phrasing

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