Nigerian National Petroleum Co. (NNPC) is making progress on plans for a public listing, following the successful precedent set by billionaire Aliko Dangote’s offering of shares in his refining company.
“We’ve done the baseline assessment,” Bayo Bashir Ojulari, chief executive officer of NNPC said in an interview on Tuesday. The firm is currently closing gaps identified by its advisers, which require changes in some reporting structures and governance frameworks, he said.
NNPC is implementing these remedial actions “to be IPO ready as as soon as possible,” Ojulari said.
NNPC has come under new competitive pressure since Dangote, Africa’s richest person, built his 650,000 barrel-a-day refinery in Lagos. The modern facility, which raised capacity to 700,000 barrels-per-day, has been operating at full capacity and exporting fuel, unlike state-run NNPC’s four moribund refineries.
Dangote is in the process of taking his refining business public, seeking to raise $1.6 billion to double the size of the existing plant.
Nigerian government officials, most recently Vice President Kashim Shettima on Oct. 7, called for NNPC to do its own IPO. However, the company’s larger footprint across all verticals of the oil sector, from fields to refining and retail, makes it difficult to compare to a single oil refinery, Ojulari said.
He hinted that once its IPO was approved, the firm will have to decide whether to list specific business units that span upstream operations, pipelines, refining, crude trading and retail.
“There are some things that cannot even be IPOed,” Ojulari said. “You have to decide whether you do a portfolio rationalization on them, consolidate them, or, you know, exit those items when that time comes.”
NNPC manages Nigeria’s stakes in joint ventures with domestic and foreign oil and gas producing firms in Africa’s top producer.
Following a completed portfolio review, NNPC is evaluating proposals for strategic and technical competence from both existing partners and foreign investors, including banks.
The company is seeking to meet a presidential production target of 3 million barrels a day in four years. Its liquids production in September was 1.7 million barrels a day, according to Nigeria’s regulator.
“The most important thing is to diversify quickly to accelerate our goals” in the upstream, he said. “We are doing a lot of other collaborations also in the gas space, the midstream.”
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