Nigeria May Sell Shares in National Oil Company

(Bloomberg) -- A long-awaited bill that could reorganize the petroleum industry of Nigeria, Africa’s biggest crude producer, makes provision for a possible sale of shares in its powerful state oil company.
Draft legislation presented to parliament on Tuesday also suggests the Nigerian National Petroleum Corp. be independent of government, with no recourse to state funding.
Tightly controlled by the Nigerian government since it was established in 1977, the NNPC has become a tool for political patronage to cronies, with opaque transactions helping fuel corruption. The bill, in the works for 20 years, is being debated in parliament.
While the current proposed law isn’t as “pro-privatization” as a 2012 version of the bill -- it omits a previous target date for selling shares and specifics on how much of a stake would be sold -- it’s still a huge step forward, said Malte Liewerscheidt, a vice president at research group Teneo Intelligence.
It’s submission to lawmakers demonstrates that the reformist camp in President Muhammadu Buhari’s administration is making progress with its agenda, Liewerscheidt said. Any efforts to make the NNPC more transparent is “a good thing,” he said.
Market Value
The government would have to approve any plans to privatize the company, according to the bill. A sale or transfer of shares would be at a “fair market value and subject to an open, transparent and competitive bidding process,” it said.
The NNPC would be replaced by a limited-liability company known as Nigerian National Petroleum Co., that operates on a commercial basis. The state’s shareholding in the new entity would be held by the Finance Ministry.
The bill also provides for an annual audit of the new oil company by an independent firm.
Other Highlights of the Bill
- A provision for “unrestricted free-market pricing” of petroleum products, ending decades of government-subsidized gasoline.
- The establishment of a regulator to provide pricing and tariff frameworks for natural gas in midstream and downstream gas operations and petroleum products.
- Establishment of a midstream infrastructure fund to make equity investments in gas-related assets on behalf of the government.
© 2020 Bloomberg L.P.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- USA Oil and Gas Employs Almost 1 Million in 2022
- US Could 'Steal' Green Energy Investments From Other Regions
- New Discoveries Make 2022 Highest Value Year In Over A Decade
- BofA Global Research Talks OPEC+ Meeting
- RRC Issues Weather Notice to Oil and Gas Groups
- BP's 2023 Energy Outlook Looks At Key Trends For Energy Transition
- Eni Pens $8 Billion Gas Deal With Libya's NOC
- Brent, WTI Net Length Continues to Build
- Exxon Beats Estimates, Posts Record $56B 2022 Profit
- Cnooc's $3B UK Portfolio Sale Has Stalled on Valuation Gap
- Is The USA Strategic Petroleum Reserve Stock Dangerously Low?
- Top Headlines: Valaris Employee Reported Missing from Rig
- What Bad Habits Should Oil and Gas Jobseekers Avoid?
- Police to Board Valaris Rig After Worker Reported Missing
- Big Oil Saw Record $199Bn Profits In 2022 But 2023 Will Be Different
- Governor Issues Disaster Declaration for Southeast Texas
- Risk Premium Embedded in USA NatGas Vanishes
- Offshore Rigs Set For Very Busy Year In 2023
- Norwegian Tax Break Ensures Increase Of O&G Supply To Europe
- World Still Waiting to See What China Reopening Means
- Valaris Employee Reported Missing from Rig
- Louisiana, Texas To Gain Thousands of Energy Jobs At Start of 2023
- Where Will WTI Oil Price Be at End 2023?
- Is the USA Shale Boom Over?
- Gasoline and Diesel Prices Expected to Fall
- Higher Oil Prices Have Not Led to More Exploration
- Shell Finds Gas In Pensacola High-Impact Well Off UK
- Talos Makes Two Commercial Discoveries In Gulf Of Mexico
- Iran Oil Gushes Into Global Market
- Will Oil Hit $100 Per Barrel in 2023?