Stakeholders back NNPC on non-sales of equities in oil assets

Stakeholders in the oil and gas industry have supported the move by the Nigerian National Petroleum Corporation (NNPC) not to succumb to pressure to sell off its equities in the joint venture companies to rake- in more revenue for the government or meet it debts obligations.

They said selling the equities at this material time would amount to losing so much money to the disadvantage of the Nigerian government and to the benefit of the investors.

According to professor Wumi Iledare, he said that with the crashing of oil prices and the  COVID19  pandemic it would be suicidal for the NNPC to sell it equities in the joint venture companies just because it wants to raise revenue either to settle debts or for the government.

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“At this moment the NNPC would not get value for its money as share prices are collapsing. It is a wise decision that you are not selling when you are desperate,” he said.

He said it should be realised that the NNPC is holding the equities in -trust for the Federal  Government who is also representing the people of Nigeria, stating that the NNPC would have to get approval from the  Federal  Executive Council before it would be able to carry out such sales if at all it must happen. He said the equity existed before the NNPC Act.

In a similar vein, Eddy Wikina, a former manager with Shell Nigeria and Exploration and Production Company, said if the NNPC  decides to sell the equities at this moment they would be sold at a much lower value, saying that this does not make economic sense.

The Nigerian National Petroleum Corporation (NNPC) had in one of the Webinar series ruled out the sale of its multi-billion-dollar equity in oil assets across the country to investors, declaring that this is the wrong time to venture into that.

Mele Kyari, group managing director of the corporation, who gave this hint in a keynote address at the 45th Anniversary Lecture of the Nigeria Association of Petroleum Explorationists (NAPE), maintained that the corporation is proactive bearing in mind the place of oil and gas in the next 40 to 50 years.

Supporting the statement of the NNPC boss, Meyiwa Eyesan, group general manager, Corporate Planning and Strategy, NNPC, declared that the NNPC has crashed its cash call debts in the Joint Ventures (JVs) with International Oil Companies (IOCs) to slightly above $2 billion.

The Corporation is in JV with Shell, ExxonMobil, Chevron, Eni, and Total.

The reduction in JV cash call debts, she declared, was achieved between 2015 and 2020 from $5 billion in 2015 to over $2 billion in five years, paying about $3 billion of the JV cash call arrears.

Meyiwa Eyesan attributed this feat to the efficient business plan put in place by the corporation.

NNPC boss stated further that the corporation is not in dire need to sell off its equities in oil companies that are in partnership with NNPC.

Responding to the suggestion that NNPC should shed its financial burdens on JVC commitments, she maintained that the Corporation has gained traction to efficiently partner with other oil companies in the country.

She pointed out that NNPC as of today is upbeat with the current plan to open the $2.3 billion domestic gas market and rehabilitate the nation’s refineries.

She maintained that NNPC had decided not to do it alone but to go into partnership with the private investors.

“What we have done in the upstream sector is what we are going to replicate in the downstream by going into partnership with private investors” she noted.

According to her, it’s going to be seen in the rehabilitation of the old pipelines and the refineries.

“The pipelines and the refineries are open to partnership on Build Operate and Transfer (BOT) bases” she explained.

The NNPC boss said that there is a need to monetize the resources from the oil and gas sector as well as boost the domestic market for petroleum products.

Other panelists who participated in the online Lecture advocated for Energy Bank as a means to properly fund the oil and gas sector.

According to them given the paucity of fund post-COVID-19 due to falling in the oil price, the panelists proposed that the 1 percent of their turnover being contributed to the National Content Development Monitoring Board (NCDMB) should be the take off fund for the Energy Bank.