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Wednesday, March 29, 2023

NNPC Limited Ends Operations as Government’s Corporation, Takes over Old NNPC’s $60bn Assets

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The Nigerian National Petroleum Company Limited (NNPCL) yesterday officially marked the end of its operations as a corporation after the transfer of assets worth $60 billion, as well as the takeover of liabilities from the old NNPC, as prescribed by the Petroleum Industry Act (PIA).

The company announced that having successfully crossed that legal requirement, within the stipulated 18 months in line with section 54 (3), the ‘cutover’ now means all its operations will be done in the name of NNPC Limited.

Speaking at the event in Abuja, which drew key industry players, the Group Chief Executive Officer of the company, Mallam Mele Kyari, noted that the move would ensure seamless availability of financing for major projects as lenders are now more willing to do business with the NNPC.

Before now, he stated that financial institutions did not see the ability of the company to repay loans and therefore could not guarantee funding.

“And therefore, before now, we will talk and talk and at the end, we don’t have access to financing. Now everyone can see that we’re a large company. There’s no company with $60 billion assets. It doesn’t exist in this country.

“So, we’re the largest company in this country. We’re also the largest company in Africa…Let me be frontal about it, our past structures were designed around individuals and geopolitical zones. It’s no longer so. Today we have a slim management structure which recognises only our ability to deliver,” he stressed.

Kyari stated that while the law provides that the NNPC could decide to leave a certain class of assets, the NNPC Limited has resolved to take over the entire assets and liabilities of the defunct corporation.

“But you will ask me, so what do I want to do with the assets? The assets are the overall joint venture assets and other businesses that the company has got. The shareholders have transferred all the assets to us, so there is no asset that is left outside.

“The law provides that we can potentially leave some of them behind. By today’s counting, every asset of the corporation, including its liability has been transferred to the NNPC limited and I repeat that the liabilities are far less than the assets that we have. So, it’s a very comfortable situation,” Kyari added.

With the new law, the GCEO stated that there’s now a clear line of sight on the company’s financing operations, including the retention of part of the dividends and retention of 30 percent oil profits from Production Sharing Contracts (PSCs).

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