August 10, 2022

Kyari: Transition To CAMA Company Will Turn NNPC Into Partner Of Choice For Investors

4 min read

The Group Managing Director of the Nigeria National Petroleum Company Limited, Mallam Mele Kyari has said that the transition to Companies and Allied Matters Act Company will turn NNPC into the partner of choice for investors

The GMD of the NNPC Limited speaking on the occasion of the ongoing 21st Nigeria Oil and Gas (NOG) Conference and Exhibition with the theme: “Funding the Nigerian Energy Mix for Sustainable Economic Growth,” told heads of private oil companies that like them, the NNPC would henceforth go for the best and juiciest assets in the industry.

Kyari maintained that the mode of operation of the national oil firm would be no different from the private firms.

Confirming the new ambitious business-like attitude of the NNPC during the programme, Kyari stated that the NNPC would be very frontal in its moves to acquire as many oil and gas assets as possible with the mindset to become one of the biggest oil firms in the world.

“What is very fundamental is that the NNPC is set to be the partner of choice. We will be the biggest capitalized company in Africa. We will be the partner that will be focused on the commercial value of every engagement that we do.

“We will be the biggest oil and gas company and therefore there will be no distinction between the NNPC and the rest of the partners that we have in this business.

“And as you (private oil companies) are also acquiring assets, and without mincing words, I am being very frontal, we will acquire the best of assets that is possible to build our assets base and also those that we can’t manage for our scale, we will give it to you,” he stated pointedly.

He reiterated that President Muhammadu Buhari would be unveiling the new NNPC Limited on July 19, which according to him meant that the firm would adopt best global practices in its operations.

However, Kyari at the event, boasted that with the evolution into a Companies and Allied Matters Act (CAMA) entity, all the challenges it is currently facing would become a thing of the past.

He said the transition of the NNPC into an entity that would be regulated in line with the provisions of the CAMA would position it as a partner of choice to all oil and gas companies globally.

Kyari added, “On the 1st of July, we crossed over to the NNPC Limited both technically and financially on every aspect. Not only that, on the 19th of July, I’m inviting all of you to be present. Mr. President will unveil the NNPC Limited to all of us on the 19th of July, and I’m inviting you.

“The meaning of this to our industry is that you’re going to have the partner of choice, the partner that will support you, and the partner that will be the largest capitalized company in Africa. Not only that, a partner that will be born of best practice, of everything that you can think of because we’re going to be a CAMA company. We are going to be another Shell, decision-making would be easy, and finances will also be easy.

“We are just going to be another Shell or another Waltersmith. And that means decision-making will be easy. Then, coming back to the theme of this conference, financing will also be easy,” he added.

Furthermore, he said while the energy transition reality was unfolding, there had been a lot of resistance across the globe to the funding of fossil fuels, until the ongoing Ukrainian-Russia war.

Kyari also said with the huge gas reserves in Nigeria, the NNPC Ltd would continue to deepen natural gas utilization to reduce energy poverty, and boost investment in clean energy technology and products.

“Yes, we are the number three gas producer. We shouldn’t be number three, we should be number one because the number one in assets and reserves should also be the number one producer. But you can’t do this except you have the right financing to put in place and all the technology you need to produce the gas,” he added.

He admitted that there had been a decline in the oil industry.

“No one is drilling today except NNPC and a few of our other partners.

“So if you don’t drill and decline continues, you are not only going to see the effect of theft and other challenges we are seeing today, you are also going to see the collateral effect of lack of investments.

“And it’s very understandable that no one wants to put their money to produce for somebody to pick it up along the path. That’s very obvious. But more than anything else, the complication came before the security challenges,” he argued.

Kyari added: “And therefore, this is the time to reset our financing strategies to make sure that companies and multilateral institutions speak to each other in a manner that ultimately, we can put money where it is needed.”

Also speaking, Minister of State, Petroleum Resources, Mr. Timipre Sylva, noted that the PIA was set to provide the necessary reforms designed to strengthen institutions, solidify regulatory and fiscal frameworks, and attract much-needed investment in Nigeria.

He posited that the only way to ensure the attraction of foreign capital was to have stable laws and a friendly business environment that will guarantee cost recovery as well as a decent return on investment for investors.

“Globally, the oil-rich countries are currently having conversations around moving away from fossil fuels to an energy mix dominated by low carbon sources of energy – renewables.

“For us in Nigeria, fossil fuel will always have a share in our energy mix for the foreseeable future, and we will not at this time abandon our fossil fuels. We have, however, adopted our vast gas resources across the country as a transition fuel,” he said.

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