By Bassey Udo
Q: What has changed between NNPC as a corporation and NNPC as a commercial company?
KYARI: What has changed is that the NNPC today as a company is smarter, more responsive and much more accountable and must act within the premises of all the regulations in the country for private companies. And more than anything else, it must meet global standards of best practice in every industry, in terms of adherence to good governance and ensuring every regulation is complied with. Beyond keeping eyes on the ball, shareholders expect that NNPC will deliver value to them in two forms.
One, that they will see dividends being paid to them from the operations of the company, and two, that the company will deliver energy to the country. The new NNPC is now in a position to deliver both of these values, because it is now a nimble company that can act quickly; can borrow and return people’s money quickly, and make investment decisions quickly. The company is also in a position now to get the best in class of people it can find anywhere in the world and bring them into the company, and ensure it works to deliver value to everyone. I am sure Nigerians will see a very different company in the coming days and months.
We are convinced that by the middle of next year, the new NNPC will be ready for the IPO (initial public offer). This means the company will have systems, processes, line in sight on profitability and accountable to its shareholders and stakeholders. These are the things required for an IPO. Getting into an IPO means that we have attained a level people will say this company will not lose money. It will deliver value to us and deliver energy.
The government has already transferred all the assets from the former NNPC to us as the successor company, and we have every ample asset to guarantee our readiness to go public as soon as possible. There is not one company in Nigeria, and indeed Africa, that has the level of assets the new NNPC has. With the assets and the best of people and best of processes, we will definitely get into an IPO. We will put our money into it, because this is a good company that will guarantee that they will not lose money, as it will deliver value to investors and energy to the people. We see that an IPO is the way to go, and we will put our money into it.
Q: How will the new independent NNPC handle the lingering issue of fuel subsidy? To be or not to be?
KYARI: Fuel subsidy is not NNPC’s burden anymore. That is a decision of the State. In every jurisdiction all over the world, and our country cannot see it differently, taxes are put on top of the market prices of the petroleum products the people consume. So, when decisions are to be made in some jurisdictions, they will make sure they reduce the level of TAXATION on Petroleum products. That is another form of subsidy. In some countries, they have zero taxation, but you pay the market price for the commodity. In a fiscal system, that also in a way of looking at it from the subsidy point of view. Some countries might decide they do not even want its people to buy petroleum products at the market price, and they will be ready to reduce the price for them, so that they can buy.
In either case, whichever decision or policy the State takes, the NNPC is there in the space to supply the products to the State at commercial value. It is also NNPC’s duty to deliver products to customers at the price that the State wants and we collect our money. So, it is no longer NNPC’s issue. NNPC has absolutely nothing to do with it. NNPC will be happy to supply the products, because it now sees the State as its customer.
Q: You have gone commercial, and has capacity to raise funds. Are you still happy that you are being stripped of Sovereign guarantees?
KYARI: A company with a huge asset base that the NNPC has does not have need for any Sovereign guarantee to operate, because lenders ask for Sovereign guarantees if they know you have no access to the assets or cannot put the assets forward. Today, the assets are in our books and records (we’ll soon make public). They have been transferred to us. If a company does not have those assets, that’s why the banks ask for those guarantees, because they know those assets don’t belong to you, But our case is different.
Q: What about the workers. I am worried when you are tralking about slimmer and smarter company. People wonder if you are going to achieve that with the kind of bloated workforce the NNPC has at the moment?
KYARI: We do not have a bloated workforce. Today, the company’s workers population is just 7000. I believe with the expansion we have a line of sight, we are going to hire more people to work for us. The law has also provided that no one is going to leave this company. Everybody’s work is preserved. Their benefits are preserved. So, no matter for concern for the workers of this company. What being slimmer and smarter means is that we will change our organizational structure and orientation. We cannot do what we are doing today and expect to get a different result. We can move people to different locations where their expertise are required. Skills are changed. We will bring up new competences and people and train them. We have the capacity to do this.
By the way, it is very true that one cannot find anywhere the kind of skills we have today in NNPC. It is very difficult to go to the market and have people who would do better than we have done in the system.
We have tested this. We tried to recruit experienced hires two years ago. We could not find anyone that could help us.
Q: What is now going to happen to your monthly contributions to FAAC?
KYARI: Let me remind you, in case you have forgotten, that the NNPC is now a private company. We don’t have any business with that again. Does MTN make contributions to FAAC? No, because MTN is a private company. The NNPC responsibility will be to pay its taxes, royalties and deliver dividends to our shareholders.
Q: So, what about the arrears of the FAAC contributions the NNPC is reported not to have been making?
KYARI: Which arrears. That was the Nigerian National Petroleum Corporation. We are the Nigerian National Petroleum Company Limited. Two different entities. Old things have passed away.