NNPC: A Post-commercialisation Assessment

NNPC: A Post-commercialisation Assessment

Emmanuel Addeh examines the activities of the Nigerian National Petroleum Company Limited (NNPC) after it was commercialised about four months ago.

On July 19 this year, the NNPC became a commercial entity. With the move which came about 45 years after the establishment of the national oil company, it sought to break off from government funding and pursue profitable ventures like its peers worldwide.

While many Nigerians wait for what this would mean for the NNPC in practical terms despite the fact that it is coming late in the day, the company, it would appear, has in recent months ramped up moves to make its operations truly global and profitable.

Aside halting all forms of funding for projects and sundry purposes in contrast to what had obtained in the over four decades of its existence of the then corporation, the company says it would be completely set for an Initial Public Offer (IPO) by June 2023 to boost its capital base.

With a N200 billion initial capital outlay as well as $5 billion initial debt funding, the new NNPC’s management maintains that the company would be one of the most efficiently run entities globally in the coming years.

Now operating under a new law, the Petroleum Industry Act (PIA) and an enabling environment to support it, plus a huge asset base, the way business was transacted in the NNPC is also changing markedly.

Although in its early stages, the NNPC has been pursuing some profitable interests in the last few months.


In one of its first moves since post-commercialisation, the NNPC on October 1, officially acquired OVH Energy, the company behind the OANDO retail brand in Nigeria.

The deal which saw the national oil firm take over all OVH assets, was meant to boost NNPC’s downstream business portfolio, enhance profitability and guarantee national energy security under an Accelerated Network Expansion (ANEX) initiative.

In the short term, the purchase would see the NNPC receive a jetty (ASPM) with 240,000 metric tonnes monthly capacity, eight LPG plants, three lubes blending plants, three aviation depots and 12 warehouses.

The acquisition also added over 380 additional filling stations under NNPC retail brand in Nigeria and Togo, on its journey to attaining 1,500 stations, making it the largest petroleum product retail network in Africa.

The Group Chief Executive Officer, NNPC, Mele Kyari, had  during the commercialisation of the firm, stated that the NNPCL planned to expand its retail outlets from 547 units to 1,500 outlets within the next six months from July.

Speaking at the event to herald the new deal in Abuja, Kyari stated that the NNPC was bringing to bear its 45 years of experience and strong capability to bear on the management of the facilities.

He maintained that securing the country against energy poverty would mean access to petroleum products in addition to managing the energy transition, which he said has become a reality.

“ We have struggled with this for many years, and we saw the opportunity to latch on the competencies of the OVH Group. We have worked with them. They were our partners and our customers. So we know their ability,” the GCEO explained.

OVH’s expertise spans across the provision of jetty services and the marketing and distribution of refined petroleum products for retail, commercial and industrial purposes.

Its subsidiaries include OVH Energy Marketing (OVHEM) Limited, licensee of the OANDO retail brand and ASPM Limited, custodians of the Lagos Midstream Jetty, also known as West Africa’s first privately owned midstream jetty.


Penultimate week, the NNPCL and the National Office of Hydrocarbons and Mines of Morocco (ONHYM),  penned a deal that kicked off the world’s longest offshore gas pipeline.

The contract is expected to drive the execution of the 7,000-kilometre Nigeria-Morocco gas pipeline project to ramp up supply to Europe.

Seen as game-changer for the industry when it comes on stream,  Kyari, speaking on the occasion in Morocco, said that the pipeline project will create wealth and improve the standard of living of countries within the African continent.

Kyari said the gas pipeline project would also help in the mitigation against desertification, describing the event as a very important milestone in the project as it reaffirms the commitment of stakeholders to deliver.

“Some of the benefits include creation of wealth and improvement in standard of living, integration of the economies within the region, mitigation against desertification and other benefits that will accrue as a result of  reduction in carbon emission,” he stated.

The NMGP is aimed at the monetisation of Nigeria’s abundant natural gas resources, thereby generating additional revenue for the country, diversification of Nigeria’s gas export routes and elimination of gas flaring.

It will also assist in supplying gas to Morocco, 13 ECOWAS countries and Europe as well as help the integration of the economies of the sub-region and improve the standard of living of people within the sub-region.

It is also expected to make available reliable gas supply as well as providing avenue for other countries along the pipeline route to develop and export their gas.

The pipeline is a 48-inch X 5,300 km (offshore from Brass Island-Nigeria to Dakhla-Morocco) and 56 X 1,700 km (onshore from Dakhla-Morocco to Maghreb European (MEP) pipeline , with a total length of over 7,000 Km and about 13 compressor stations.

The pipeline will originate from Brass Island (Nigeria) and terminate north of Morocco, where it will be connected to the existing  MEP that originates from Algeria, via Morocco to Spain.

The Final Investment Decision (FID) on the $25 billion Nigeria-Morocco gas pipeline will be taken in 2023, the national oil company said.


To consolidate on its new direction, the NNPC during the week, named five executive vice presidents in its post-commercialisation drive.

Accordingly, the Group Executive Director, Upstream, Adokiye Tombomieye is now the Executive Vice President (Upstream) while the Group Executive Director, Downstream, Mr. Adeyemi Adetunji will  take the role of Executive Vice President (Downstream).

In addition, the Executive Director, Gas and Power, Abdulkabir Ahmed will  become the Executive Vice President, Gas, Power and New Energies, while Inuwa Danladi has been named the Executive Vice President, Business Services.

Furthermore, Mrs Oritsemeyiwa Eyesan will take the role of Executive Vice President, Corporate Strategy and Sustainability; while Chidi Momah becomes the General Counsel for the National Oil Company (NOC).

Aside helping the NNPC establish continuity of leadership in critical business areas, it was gathered that the move will further give the NOC the leeway to recruit experts from any part of the world and enable the company benefit from international best practices in the oil and gas industry.


Following criticisms, the NNPC has clarified the volume of petrol consumed by Nigerians. While it was largely vague before now, prompting debates, the NNPC said between January and August 2022, the total volume of Premium Motor Spirit (PMS) imported into the country was 16.46 billion litres, which translates to an average supply of 68 million litres per day.

The NNPC added that the average daily evacuation (depot truck out) from January to August 2022 was 67 million litres per day. It added that the daily evacuation (depot load-outs) records of the NMDPRA carry daily oscillation ranges from as low as four million litres to as high as 100 million litres per day.

Before the state oil company released the data, the Nigerian Customs Service (NCS) had questioned the claim that the country consumes 60 million litres of petrol daily.

While there are arguments about the exact daily consumption figure for petrol, the NNPC Limited laid the matter to rest, insisting that the figure remained at 68 million litres supply per day. It also said it would submit itself for a forensic audit of fuel supply and subsidy management.

 “As a responsible business entity, NNPC will continue to engage and work with relevant agencies of the government to curtail smuggling of PMS and contain any other criminal activities,” it stated.


To put it mildly, Nigeria has been unable to benefit from the rising international oil prices due to oil theft.

To underscore the severity of the situation, in a shocking revelation, recently, Kyari narrated how an illegal oil pipeline connecting directly to the high sea was recently discovered.

Kyari said the major oil export terminal that had its products diverted  into the sea had been operating undetected for nine years.

The 4-kilometre or 2.5-mile connection from the Forcados export terminal, which typically exports around 250,000 barrels per day (bpd) of oil, into the sea was found during a clamp-down on theft in the past six weeks,  Kyari said during a meeting with the Nigerian senate.

“Oil theft in the country has been going on for over 22 years but the dimension and rate it assumed in recent times is unprecedented,” Kyari told the lawmakers.

“But in rising up to the highly disturbing challenge, NNPC, has in recent time in collaboration with relevant security agencies clamped down on the economic saboteurs.

“In the course of the clampdown within the last six weeks, 395 illegal refineries have been deactivated, 274 reservoirs destroyed, 1,561 metal tanks destroyed, 49 trucks seized,” Kyari said.

“ The most striking of all, is the four-kilometre illegal oil connection line from Forcados Terminal into the sea which had been in operation undetected for nine solid years,” he added.

While thieves often tap land-based pipelines to siphon oil undetected, but an illegal line in the ocean is highly unusual and suggests a more sophisticated theft operation.

To halt the humongous disruption of Nigeria’s oil production, the NNPC has introduced several measures in the last few weeks.

These include a real-time monitoring central system which can detect breaches, the collaboration with host oil communities to deal with theft, the introduction of a whistle blower arrangement, deployment of more security personnel, among others.


For the second time in its 45-year history, the NNPC, formerly a corporation, has declared a Profit After Tax (PAT) financial position, announcing that it raked in N674 billion for the 2021 financial year. The company has insisted that it is part of its transparency agenda to make available its Audited Financial Statements (AFS).

The amount announced by the NNPC was 134.8 per cent or N387 billion higher than the N287 billion announced by the company in 2020.

Kyari stated that the profit was driven by the company’s activities in the upstream operations as well as in gas and power.

He also announced that the shareholders’ fund position grew to N2.81 trillion, an increase of 144 per cent, in a speech he titled: “Sustaining Positive Momentum, Progressing to New Levels.”

As the company seeks to become a ‘dynamic global energy company’ of choice to its customers, partners, and its over 200 million shareholders comprising all Nigerians, the GCEO noted that there will be no going back on the new path that the NNPC has set for itself.

“In 2019, we rolled out deliberate policies and initiatives aimed at reducing costs and eliminating losses while adopting technology to entrench Transparency, Accountability, and Performance Excellence (TAPE) across the various functions that support our business operations.

“Since then, we began to see the transformational impact of these policies and initiatives on NNPC’s performance. We have recorded significant improvement in our financial performance over the past three years, turning up the curve, from losses to profits,” Kyari stated.

He recalled that in September 2021, President Muhammadu Buhari approved the publication of the 2020 NNPC Group Audited Financial Statement (AFS) in which NNPC declared a profit after tax of 287 billion for the first time in its 44 years.

Despite the challenging operating environment, Kyari stated that the NNPC believes that the company has the potential to sustainably deliver better value to its shareholders.

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