It Is Ridiculous To Compare Saudi Aramco With NNPC Ltd

By Adewole Kehinde

“Honesty is the first chapter in the book of wisdom.” – Thomas Jefferson

A few days ago, Saudi Arabia’s majority-owned state-owned firm, Saudi Aramco, announced the payment of its shareholders $97.8 billion in dividends in 2023. Aramco paid $97.8 billion in dividends in 2023, up 30 per cent from 2022.

I noticed Netizens casting aspersion on the Nigeria National Petroleum Company Limited, saying the company is struggling with dollar remittance practices amid the lingering foreign exchange crisis in the country.

To enlighten the ignorant Netizens, Saudi Aramco is the world’s largest oil producer. The company was established in 1933 and began drilling in 1938.

The world got a sneak peek at this long-secretive company’s financial snapshot after credit rating agencies released financial details about Saudi Aramco in April 2019, just before its debut international bond sale, which raised $12 billion.

Saudi Aramco began attracting increased investor attention in 2016 when Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al-Saud announced plans to list 5% at a valuation of approximately $2 trillion in what became the largest initial public offering (IPO).

Saudi Aramco went public with an IPO in 2019, raising a record $25.6 billion by selling three billion shares. This amount was only 1.5% of the company’s value—significantly lower than firms like Apple, which has more than 84% of its shares held by the public. Limiting ownership allows Saudi Arabia to remain in control of the company, as proceeds from the offering are central to a plan by the Saudis to diversify the oil giant.

Using a greenshoe or over-allotment option, the company bumped up the size of its IPO to $29.4 billion after selling 450 million additional shares. The IPO price valued the company at $1.87 trillion—still below the Crown Prince’s valuation.

The company’s expansion continued in 1994 when it acquired a 40% interest in Petron Corporation, the largest crude oil refiner and marketer in the Philippines. And then again in 1996, when it made several more overseas investments in Europe by purchasing 50% of privately held Greek refiner Motor Oil (Hellas) Corinth Refineries S.A. and its marketing affiliate, Avinoil Industrial Commercial and Maritime Oil Company, S.A.

Today, Saudi Aramco is represented in the three major global energy markets of Asia, Europe, and North America.

Looking back at the journey of Saudi Aramco, it is only ignorant people will compare the company with NNPC Limited, which became a limited company in 2022 after the signing into law of the Petroleum Industry Act.

We all know the state of the NNPC before Mal Mele Kyari came on board in 2019.

The Nigerian National Petroleum Corporation did the unthinkable when, on Thursday, June 11, 2020, it took a bold step to present its ‘2018 Audited Financial Statement’ to the Nigerian public. An exercise that is happening for the first time in 47 years of the corporation.

The oil and gas industry that is being led by the NNPC has been dubbed opaque because of the lack of transparency that has characterized the operations of the industry. It is believed that nobody other than the corporation itself knows how much Nigeria is earning from crude oil and other associated business activities. Because of this, the general impression Nigerians have been having about the corporation is very negative, to put it mildly.

This is because the government has always been the reason why there has not been transparency in the corporation, as it always breathes down the throat of NNPC to finance projects that are outside the scope of the organisation. It is the government’s cash cow. Most often, the corporation is asked to bring money to fund projects that were never budgeted for, and it must obey.

But with this development, the organisation is now beginning to listen to the cacophony of demands that it needs to be more open in its transactions so that it can engender enough confidence among international and local investors.

To some of the operators in the industry, this is a welcome development, and they want the management of NNPC to be encouraged along this line to strengthen the confidence of stakeholders in the industry.

The presentation of the audited financial statements remains indelible in the annals of the Nigerian National Petroleum Corporation (NNPC). It was a day that the National Oil Company began to erase doubts about its total commitment to transparency and accountability in its business transactions as it published, for the first time, its comprehensive Audited Financial Statements (AFS).

Mele Kyari, the NNPC Group Managing Director, stated unequivocally in his maiden statement on the assumption of office on July 8, 2019, that the corporation’s business dealings and governance, under his watch, would be accountable to the 200 million Nigerians, whom he believes are the true stakeholders of the company.

Transparency, he explained, would then be his watchword. He followed this pronouncement up by rolling out a programme known as TAPE—Transparency, Accountability, Performance, and Excellence—which has become the operating guideline and a way of doing business in the corporation. He has therefore fulfilled this promise with this publication.

The full disclosure of the corporation’s books involved those of 19 Strategic Business Units (SBUs) and a Corporate Services Unit (CSUs), even as the NNPC affirmed that its 2019 Audited Financial Statement was already being prepared and expected to be ready in a couple of months.

For a company most maligned for opacity in the recent past, the publication of NNPC’s books is a big deal. It is no wonder that extractive industry watchdogs across the world have touted the feat as a glorious example worthy of emulation. Extractive Industries Transparency International’s (EITI) Executive Director, Mark Robinson, declared, no sooner than the NNPC AFS was made public, that the development came at a record time, commending the National Oil Company as setting a new standard of reporting.

In Nigeria, NNPC’s disclosure of its books has not gone unnoticed, as organisations and individuals have also commented. The Nigeria Extractive Industries Transparency Initiative (NEITI) has described as laudable the decision to make public its audited accounts. NEITI acknowledges that the development fulfilled a pledge made by Mele Kyari to the management of NEITI.

The then NEITI Executive Secretary, Waziri Adio, said the organisation welcomed the eventual fulfilment of the pledge and obligation, saying given NNPC’s antecedents and its prominent role in the sector and the country, the publication of its audited accounts was positive, signalling more openness for the oil and gas sector and Nigeria.

NEITI called on the corporation to go further by publishing its previous audited accounts in open data formats so that the reports can be more accessible to citizens who are the shareholders of the corporation, saying NNPC should also strengthen and sustain its commitment to data mainstreaming and systemic disclosure.

Also reacting to this development, the then Governor of Kaduna State, Nasir El-Rufai, lauded the initiative, describing the NNPC boss as a “game changer,” needed to move the corporation forward in terms of accountability and transparency.

On October 8, 2021, the Corporate Affairs Commission (CAC) revealed that the Nigerian National Petroleum Company (NNPC) Limited will have one of the largest registered share capitals in Nigeria with a valuation of N200 billion.

No wonder Mal Mele Kyari said, “As a company that is guided under the regulations of the Companies and Allied Matters Act, the NNPC Limited will declare its shares to the public for acquisition very soon.

“We will pay taxes; we will pay royalties like anyone; and we will also pay dividends to our shareholders, which many of you are.

“We are in business, and business means competition. We are in the private sector; forget about the fact that we are owned by the government 100 per cent.

“You are also aware that we are going to make an initial public offer very soon, and we will sell a part of our equity.

“It is in the law, and once that happens, we will not be any different for any of you, and it will be a very different business environment,” he said.

NNPC Limited, which became a commercial company in July 2022, no longer has recourse to state funds and will have to raise funding independently.

I hope that NNPC Limited will achieve its vision—to be the dynamic global energy company of choice—as well as its mission—to reliably deliver energy while continuously creating value for all stakeholders.


Adewole Kehinde is the publisher of Swift Reporters and can be reached via 08166240846, email: