The Nigerian National Petroleum Company Limited (NNPC Ltd) is in the final stages of listing on the capital market as it prepares for an Initial Public Offering (IPO) in line with the Petroleum Industry Act (PIA) 2021.
Olugbenga Oluwaniyi, the company’s Chief Finance and Investor Relations Officer, disclosed this during a consultative meeting with partners at the NNPC Towers in Abuja on Thursday.
He revealed that NNPC Ltd has commenced an “IPO Beauty Parade”, a strategic engagement with prospective partners to ensure compliance with capital market regulations ahead of its planned listing.
“The Nigerian National Petroleum Company Limited (NNPC Ltd) is at the final stage of getting listed in the capital market, in keeping with the provisions of the Petroleum Industry Act (PIA) 2021,” the statement read in part.
An IPO, which allows institutional investors to purchase shares in a company for the first time, will officially introduce NNPC Ltd to the stock market.
Oluwaniyi explained that the development aligns with capital market regulations and aims to determine the best offers in terms of project partnership.
More insights
According to the CFIO, the purpose of the IPO Beauty Parade is to find potential partners and explore how they can support the company.
He mentioned three key areas where partnerships are needed: Investor Relations, IPO Readiness Advisers, and Investment Bank Partners.
The selection of partners will be based on the strength of their proposals and their ability to provide comprehensive support in these areas.
Under the Petroleum Industry Act (PIA) 2021, NNPC Ltd is required to transition from a state-owned entity to a fully commercial enterprise. This transformation also mandates compliance with the Company and Allied Matters Act (CAMA) 1990, ensuring transparency, efficiency, and profitability.
What this means for the oil and gas sector
- This move represents a major shift in Nigeria’s oil and gas industry. By opening up to investors, NNPC Ltd aims to enhance corporate governance, attract private sector investment, and boost operational efficiency.
- NNPC Ltd is in the final stages of preparing for its IPO, a move that will significantly impact the Nigerian economy and the global oil and gas market.
- The ongoing IPO Beauty Parade will determine the best partners to guide the company through this crucial phase, ensuring a successful public offering.
What you should know
NNPC seems to be following the example of several state-owned oil firms that have gone public and turned out to be huge global successes. Some of those state-owned oil companies that have their shares traded publicly include;
- Saudi Aramco (Saudi Arabia):This is the world’s largest oil company, and its IPO in 2019 was the largest in history, raising $25.6 billion.
- China National Offshore Oil Corporation (CNOOC):Another significant Chinese oil and gas company, also publicly listed.
- Sinopec (China):A major Chinese oil and gas company, also publicly listed.
- Gazprom (Russia):A major Russian natural gas company, also publicly traded.
- National Iranian Oil Company (NIOC):A major Iranian oil and gas company.
- Petrobras (Brazil):A major Brazilian oil and gas company.
Recall that in March 2024, the Group Chief Executive Officer (GCEO) of the NNPC, Mele Kyari, had hinted that the anticipated public listing of the company’s shares at the stock market as provided for in the Petroleum Industry Act (PIA), will start soon.
Kyari that NNPC would become a quoted company in line with the PIA, adding that at maturity, some of the national oil company’s shares would be divested. He said NNPC had experienced transformation owing to the reform process triggered by the PIA.
The NNPC boss said the oil firm has moved away from a government-owned corporation to a limited liability company that is now a commercial and profit-making company.
He explained that in the past, the company was a corporation owned by the government but wasn’t a commercial company and that the organisation needed to move away from that situation to a reform process that converted it to a full limited liability company.
