The Nigerian National Petroleum Company Limited (NNPC Ltd) is in the final stages of listing on the capital market as it prepares for an Initial Public Offering (IPO) in line with the provisions of the Petroleum Industry Act (PIA) 2021.
The move marks a significant shift in Nigeria’s oil and gas industry, positioning NNPC Ltd among global energy giants that have successfully transitioned from state-owned enterprises to publicly traded companies.
Olugbenga Oluwaniyi, NNPC Ltd’s Chief Finance, and Investor Relations Officer, disclosed this during a consultative meeting with prospective partners at the NNPC Towers in Abuja on Thursday. He revealed that the company had commenced an “IPO Beauty Parade,” a strategic engagement with potential partners aimed at ensuring compliance with capital market regulations ahead of its planned listing.
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“The Nigerian National Petroleum Company Limited (NNPC Ltd) is at the final stage of getting listed in the capital market, in keeping with the provisions of the Petroleum Industry Act (PIA) 2021,” Oluwaniyi stated.
An IPO allows institutional investors to purchase shares in a company for the first time, officially introducing it to the stock market. This development signals a major transition for NNPC Ltd, which has operated as a government-owned entity for decades.
Roadmap for NNPC Ltd’s Public Listing
The IPO Beauty Parade, according to Oluwaniyi, is focused on selecting key partners to guide NNPC Ltd through the capital market process. The company is looking for expert advisors in three critical areas: Investor Relations, IPO Readiness, and Investment Banking Partners.
The selection of partners will be based on the strength of their proposals and their ability to provide comprehensive support in these areas. The goal is to determine the best offers in terms of project partnership, ensuring a smooth transition to public listing while maintaining compliance with capital market regulations.
The transformation of NNPC Ltd is in accordance with the PIA 2021, which mandates the national oil company to operate as a fully commercial enterprise. The PIA also requires compliance with the Company and Allied Matters Act (CAMA) 1990, reinforcing transparency, efficiency, and profitability in NNPC Ltd’s operations.
What This Means for Nigeria’s Oil and Gas Industry
NNPC Ltd’s move to become a publicly traded company represents a major reform in Nigeria’s oil and gas sector. The company aims to enhance corporate governance, attract private sector investment, and improve operational efficiency by opening up to investors.
A successful IPO would increase the company’s access to capital, allowing it to fund critical energy projects, expand exploration activities, and improve refinery operations. Additionally, the transition could boost investor confidence in Nigeria’s oil sector, demonstrating the government’s commitment to fostering a competitive and transparent petroleum industry.
NNPC Ltd’s planned IPO follows a global trend in which state-owned oil companies transition into publicly traded entities to attract investment and improve financial accountability. Several national oil firms have successfully gone public and achieved global success.
Saudi Aramco, the world’s largest oil company, raised $25.6 billion in its 2019 IPO, making it the largest in history. China National Offshore Oil Corporation (CNOOC) and Sinopec, both Chinese oil and gas giants, are also publicly listed. Russia’s Gazprom, a leading natural gas company, operates as a publicly traded entity, while Petrobras, Brazil’s state-owned oil company, has been a publicly listed firm for years. The National Iranian Oil Company (NIOC) has also taken steps towards commercial operations.
In March 2024, the Group Chief Executive Officer (GCEO) of NNPC Ltd, Mele Kyari, hinted that the company’s anticipated public listing would soon commence, in line with the PIA. He emphasized that NNPC Ltd was undergoing a transformation process that would see it become a fully commercial entity.
Kyari explained that previously, NNPC operated as a government-owned corporation, but it lacked the financial independence and commercial flexibility to compete in global markets. With the reform triggered by the PIA, the company has now transitioned into a limited liability company that functions as a profit-making business.
“As a corporation owned by the government, NNPC was not a commercial company. But we needed to move away from that structure. The transformation process has now made NNPC Ltd a full limited liability company that is commercially driven,” Kyari stated.
He further noted that at maturity, some of NNPC Ltd’s shares would be divested, allowing broader participation by private investors.
The IPO process is expected to generate significant interest from both local and international investors. However, the listing comes with several challenges, including market volatility, regulatory compliance, and corporate governance expectations. The global oil market remains unpredictable, and fluctuations in crude oil prices could impact investor sentiment. Additionally, the transition from a government-owned enterprise to a publicly traded company will require strict compliance with Nigeria’s capital market regulations. Investors will also closely monitor how NNPC Ltd improves its governance framework, ensuring that transparency and accountability are upheld in its operations.
However, the listing is expected to unlock billions of dollars in investment, enabling the company to expand production capacity, modernize refineries, and invest in renewable energy projects.
The ongoing IPO Beauty Parade is seen as a crucial step in selecting the right partners to guide NNPC Ltd through this transformation. If successful, the public listing of NNPC Ltd could mark a new era in Nigeria’s oil and gas sector, paving the way for increased private sector participation, improved efficiency, and long-term profitability.