Page 4 - AfrOil Week 36 2021

AfrOil COMMENTARY AfrOil

(Photo: NNPC)

IPO at the heart of NNPC’s plans

The state-owned Nigerian firm intends to list within the next few years following the announcement

of its first annual profit and plans in train to assume a new role in charge of the downstream sector

NIGERIA is planning to list its state oil company NGN1.7bn [$4.1mn] in year 2019 and the even-
once a corporate overhaul is complete, with the tual declaration of Net Profit in Year 2020 for the
WHAT: firm having declared its first annual profits in 44 first time in its 44-year history.”
NNPC will embark on a years of operation. The announcement comes as It should be noted that 2019 was the first year
corporate restructuring the long-awaited Petroleum Industry Bill (PIB) for which the company published audited finan-
process as it prepares to begins to take effect. cial statements.
launch an initial public Under the new legislation, the Nigerian Meanwhile, Kyari noted: “This company is
offering (IPO). National Petroleum Corp. (NNPC) will trans- going to be profitable ... It has a short-term view
form itself to become a commercial enterprise of how things are going to be done better to align
WHY: with some autonomy. with best practices in the industry, trying to see
The company recently Speaking in an interview with Bloomberg how we can latch on to the existing framework
announced its first ever Television this week, the company’s managing for energy transition ... In the long-run it is going
annual profit and it plans
to build on the success of director Mele Kyari said that the new NNPC Ltd to be a great company, and great companies
similar listings by state would not be ready for an initial public offering always go for IPO.”
oil firms. (IPO) until 2024 at the earliest. “We want to get He explained that to be IPO-ready, the com-
ready ... Surely, it is not what we will do in 2022 pany would need to do things differently, “get
WHAT NEXT: or 2023. Probably, the earliest consideration will its books corrected,” recapitalise and “shape its
The listing will not hap- be in three years’ time,” Kyari said. portfolio”.
pen before 2024, giving In late August, NNPC recorded a net Kyari also spoke of the opportunity it had
the company time to inte- profit of NGN287bn ($698mn). Celebrating identified to acquire a stake in the Dangote
grate its new investments the news, Nigerian President Muhammadu Refinery, which, following the latest update
in refining. Buhari said: “The NNPC losses were reduced from the company’s executive director, appears
from NGN803bn [$1.95bn] in year 2018 to to be a bargain.

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