Oil was discovered in Nigeria in 1956 at Oloibiri in the Niger Delta after half a century of exploration. The discovery was made by Shell-BP, at the time, the sole concessionaire. Nigeria joined the ranks of oil producers in 1958 when its first oil field came on stream, producing 5,100 bpd. After 1960, exploration rights in onshore and offshore areas adjoining the Niger Delta were extended to other foreign companies. In 1965, the EA field was discovered by Shell in shallow water southeast of Warri.
In 1970, the end of the Biafran war coincided with the rise in the world oil price, and Nigeria was able to reap instant riches from its oil production. Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC) in 1971 and established the Nigerian National Petroleum Company (NNPC) in 1977, a state-owned and controlled company that is a major player in both the upstream and downstream sectors.
Following the discovery of crude oil by Shell D’Arcy Petroleum, pioneer production began in 1958 from the company’s oil field in Oloibiri in the Eastern Niger Delta. By the late sixties and early seventies, Nigeria had attained a production level of over 2 million barrels of crude oil a day. Although production figures dropped in the eighties due to the economic slump, 2004 saw a total rejuvenation of oil production to a record level of 2.5 million barrels per day. Current development strategies are aimed at increasing production to 4 million barrels per day by the year 2010.
Petroleum production and exports play a dominant role in Nigeria’s economy and account for about 90% of its gross earnings. This dominant role has pushed agriculture, the traditional mainstay of the economy, from the early fifties and sixties, to the background.
It is no longer news that the new Petroleum Industry Act (PIA) 2021 restructured and empowered the NNPC as a new entity.
NNPC’s Group Managing Director (GMD)/Chief Executive Officer (CEO) stated during a stakeholders’ meeting that NNPC is doing all possible to guarantee compliance with the requirements of the Petroleum Industry Act (PIA) in terms of guidelines and timetables for action.
Kyari stated that the new business will be active when the Ministers of Petroleum and Finance transfer verified assets from the Corporation to the NNPC Ltd.
He noted that with the level of assets available and the new fiscal regime, NNPC Ltd. was poised to become Africa’s number one energy company, saying that global brands interested in doing business with the new NNPC Ltd. needed to be confident in the firm’s asset base.
NNPC To Begin Sale Of Shares In 2024
In September 2021, Kyari has said that the earliest the corporation can issue its Initial Public Offer (IPO) to investors is in the next three years.
Speaking to Bloomberg TV, Kyari said: “We will be in the position to consider any IPO in three years’ (2024) time; that is the provision of the law.” But when you want to get ready for an IPO, you need to do things differently. You need to get your books correct; you need to recapitalise; you need to shape your portfolio; and many more things that you have to do until you get IPO ready.
Giving Nigerians A Chance To Become Shareholders
The Nigerian National Petroleum Company is set to change its operations and become a different company from Friday, July 1.
The state-owned corporation will no longer be simply referred to as NNPC but as the Nigerian National Petroleum Company Limited (NNPC Ltd). The development is in line with the provisions of the Petroleum Industry Act (PIA)
The transformation will give Nigerians a chance to become shareholders in NNPC, which has been a government company for 45 years. NNPC is one of Africa’s largest state oil and gas companies with a presence in every area of the oil and gas value chain.
The Nigerian National Petroleum Company (NNPC Limited) is to be unveiled by President Muhammadu Buhari on July 18.
The unveiling of the new NNPC follows the implementation of the Petroleum Industry Act 2021.
The move marks a major milestone in the transition to a more viable petroleum industry made possible by the PIA 2021, which is attracting investments to support Nigeria’s economic growth and generate employment for Nigerians.
The PIA was signed into law by Buhari on August 16, 2021, following its passage by the National Assembly in July of the same year.
Specifically, Section 53(1) of the Petroleum Industry Act 2021, requires the Minister of Petroleum Resources to cause the incorporation of the NNPC Limited within six months of the enactment of the PIA in consultation with the Minister of Finance on the nominal shares of the Company.
In line with the PIA, the incorporation of the NNPC Ltd was done by the Corporate Affairs Commission on September 21 last year. This made the NNPC Ltd float with an initial capital of N200bn, making history as the company with the highest share capital in the country.
In compliance with the PIA, Buhari inaugurated the NNPC Ltd board in January this year, which is being chaired by Margery Chuba Okadigbo.
Other board members include Mele Kolo Kyari, Chief Executive Officer; Umar I. Ajiya, Chief Financial Officer; Tajudeen Umar (North-East); Lami O. Ahmed (North-Central); Mohammed Lawal (North-West); Henry Obih (South-East); Constance Harry Marshal (South-South) and Pius Akinyelure (South-West).
The President has charged members of the NNPC Ltd Board to ensure strict compliance with corporate governance principles and prioritise business with the highest ethical standards, integrity, and transparency.
Buhari said he expects the NNPC Ltd to focus on profitability and operate at par with its industry peers.
He said, “I expect the NNPC Limited to be mindful of our commitments to our net carbon zero aspirations and to ensure total alignment with the global energy transition realities.”
“The Nigerian National Petroleum Company Limited is mandated to focus on profitability and continuous value creation beyond the simple fulfilment of legal and regulatory requirements.
“NNPC Limited is expected to operate at par with its industry peers across the world while acting as an enabler company that will foster the development of other sectors of our economy.”