• Thu. Jun 8th, 2023

    NNPC’s plan is to topple Africa’s most profitable company, says Kyari

    ByBassey Udo

    Jan 30, 2022


    The recently incorporated state-owned Nigerian National Petroleum Company (NNPC) Limited is dreaming big about its future as the once loss-accumulating oil and gas firm says its target is to emerge as Africa’s most profitable company in the foreseeable future.

    The Group Managing Director/CEO, Mele Kyari, is quoted to have unfolded the dream of the company during a recent town hall meeting with NNPC employees in Abuja.

    Although in the last decade the company operated as a notorious liability cost centre, its fortunes witnessed a significant turnaround in 2020, as it transformed into a multi-billion Naira profit-making entity.

    The Minister of State for Petroleum Resources, Timipreye Sylva, attributed the monumental achievement by the company to the ongoing reforms of its operational processes and systems that ensured transparency, accountability and efficiency towards sustained profitability.

    The Minister said the recent enactment of the Petroleum Industry Act (PIA) holds brighter prospects for growth, by seeking new opportunities to be more efficient, by automating its operating systems and processes to make the company’s business faster, reduce logistics costs, and eliminate additional costs to the business.

    For Kyari, NNPC’s target is to upstage Dangote Cement reputed to be Nigeria’s most profitable company, with a market valuation of over N4.35 trillion and profit after tax of N278 billion in the first nine months of 2021.

    Besides, Kyari said the NNPC also aspires to topple the Cape Town, South Africa based Naspers Limited, regarded as the most profitable company in Africa in 2020, with a market capitalization of over $33.21 billion as of January 2022.

    In 2020, the NNPC reported Naspers has a market cap of that the Petroleum Industry Act gives Nigeria an advantage over these companies.

    in its audited financial statement of a N287 billion profit after tax (PAT), from an accumulated loss of about N1.53trillion the previous year.

    With the PIA, Kyari said the NNPC has better opportunities and business prospects created by the new legislation to tap into, to continue to expand and grow.

    On the importance of the PIA to the NNPC and, by extension, the Nigerian economy, Kyari said the new legislation has raised shareholders’ expectations from the company, while also giving the firm plenty of room to grow.

    “The PIA has placed all money-making alternatives on the table. It is up to us (NNPC workers) to take advantage of them,” he said.

    He said that as a result of the new legislation, NNPC Ltd would not only be able to shed some of its toxic liabilities, but would also become Africa’s largest and most capitalised corporation, as well as the continent’s most lucrative investment.

    Urging employees to work towards ensuring the organization not only became a commercially successful enterprise, but also a multibillion-dollar corporation that delivers value to its shareholders – the over 200 million Nigerians–on a constant basis.

    Last week, the company sealed a $5billion corporate finance deal with the African Export-Import Bank (Afreximbank), its first finance since the coming into existence of the PIA and its incorporation into a limited liability company.

    Under the financing deal, Afreximbank agreed to enter into a finance advisory and fundraising role to raise $5billion to “acquire, invest and operate energy producing assets in Nigeria as part of NNPC’s growth strategy. ”

    The finance would enable the NNPC to fund some of its major investments in the country’s upstream oil and gas sector, including the planned acquisition of pre-emptive rights in select Joint Venture operations in the industry as well as take over the ownership of some non-investing partnerships.

    Others include investing in strategic assets to address integrity, bottlenecking, and growth issues in the oil industry, such as rigless activities and oil drilling campaigns.

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