NNPC was yesterday unveiled as a private company. Here’s what that means for FAAC remittances, fuel subsidy, others

Nigerian National Petroleum Company Limited on Tuesday made it clear that it would no longer remit any money to the Federation Accounts Allocation Committee for sharing to the three tiers of government monthly.

It said this was based on its latest transition from a public corporation to a limited liability company and that it currently owed no money to FAAC, as all monetary arrears to the committee were owed by the old corporation and not the new oil company.

This came as President Muhammadu Buhari officially unveiled the NNPC Limited on Tuesday and declared that the new entity was henceforth free from institutional regulations.

Buhari, who made this public at the Presidential Villa, Abuja, stated that the oil firm would from now on conduct itself under best international business practice.

Before its official unveiling as a limited company, NNPC had failed to make any remittance to FAAC since this year. It had consistently deducted the amount it spends on fuel subsidy monthly, a development that had eroded the funds which it would have remitted to the committee.

Findings showed that between January and May this year, the oil company had spent N1.274tn on petrol subsidy, being the sole importer of the commodity into Nigeria. It, however, described its subsidy spending as under-recovery of a Premium Motor Spirit/value shortfall.

Speaking to journalists on the sidelines of the unveiling of the new oil company, Chief Executive Officer, NNPC Limited, Mele Kyari, stated that the firm was now a private outfit and had nothing to do with FAAC anymore.

Responding to a question on what would happen to NNPC’s monthly FAAC contributions, kyari replied, “We are now a private company; would MTN go to FAAC?”

When probed further to tell if there would be no more FAAC remittances from the company going forward, he said, “We will pay our taxes, royalties and deliver dividends to our shareholders.”

Asked about the arrears to FAAC that were not delivered by the firm over the years, the CEO said, “Which arrears? That’s Nigerian National Petroleum Corporation.”

What NNPC transition implies

NNPC explained some of the changes that had taken place or would happen based on the transition of the firm from a corporation to a limited company.

Kyari said, “You now have a smarter, more responsive and much more accountable company that must act within the premises of all regulations that are in Nigeria for private companies.

“It must also meet the standards of best practice in every industry in terms of governance, complying with regulations and beyond these, eyes are on the ball that your shareholders are expecting you to deliver value to them.

“That value must translate in two forms. One is that they must see dividends and the second part is that you must deliver energy in this country. This company is now in a position to do both of them because it is now a nimble company, can act, borrow and return peoples money quickly.”

He said the firm would now make decisions very quickly, get the best class of people anywhere in the world, inject them into the company and get its Initial Public Offer ready by June 2023.

“I am sure Nigerians will see a very different company in the coming days and months. And we are convinced that by the mid of next year this company will be IPO ready,” Kyari stated.

Proving further explanation, he said, “IPO ready means that you have systems and processes lined on the side of profitability and is a company that is accountable to its shareholders and stakeholders.

“Simply that is what IPO processes look for; to see that you have the assets. Today government has transferred those assets to NNPC and we have very ample assets that nobody has in this country and, of course, not even in Africa.”

Fuel subsidy now Nigeria’s burden, not NNPC

Asked to explain how the oil firm would handle subsidy on petrol being a commercial entity, Kyari replied that fuel subsidy was not a burden of NNPC.

He said, “Subsidy is not NNPC’s burden. Subsidy is the decision of the state and in every jurisdiction anywhere in the world, countries see them differently. In some countries, they put petroleum tax on top of the market price of these products.

“So when decisions are to be made in some jurisdictions they will reduce the level of taxation. That also is another form of subsidy. In some countries, you have zero taxation but you will pay the market price for the commodity. That also in a way, in fiscal system, looks at it from a subsidy point of view.

“In very many countries, a leader can decide that I don’t even want my countrymen to buy it at the market price. I’m ready to reduce that price for them so that they can buy.”

Kyari added, “In either case, whichever way the decision and the policy of the state decides, you know NNPC is there in the space to provide the product to the state at commercial value and, of course, it is also our duty to deliver to the customer at the price that the state wants.

“So it is no longer an NNPC issue. NNPC will have no issue with this. NNPC will be happy to supply because we will now see the state as our customer.”

He further explained that the new NNPC had no need for a sovereign guarantee, as lenders would only ask for such when the company seeking the loan lacked access to its assets.

“Today the assets are in our books and have been transferred to us. That is what banks are looking for, and that is the reason why they ask for a sovereign guarantee,” he stated.

The NNPC boss denied claims that the company’s workforce was bloated, as he stressed that “today our total population is just 7,000 and I believe that with the expansion we have in the plan we are going to get 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 there is no matter of concern for the employees of this company.”

NNPC Limited free from institutional regulations

Speaking earlier during the event, before unveiling the new company, Buhari declared that NNPC Limited was henceforth free from institutional regulations.

He said, “The provisions of PIA (Petroleum Industry Act) 2021, have given the Nigerian petroleum industry a new impetus, with improved fiscal framework, transparent governance, enhanced regulation and the creation of a commercially-driven and independent national oil company that will operate without relying on government funding and free from institutional regulations such as the Treasury Single Account, Public Procurement and Fiscal Responsibility Acts.

“It will, of course, conduct itself under the best international business practice in transparency, governance and commercial viability.”

The President said the government was transforming the petroleum industry to strengthen its capacity and market relevance for the present and future global energy priorities.

“By chance of history, I was privileged to lead the creation of the Nigerian National Petroleum Corporation on the July 1, 1977. Forty-Four years later, I was again privileged to sign the Petroleum Industry Act in 2021, heralding the long-awaited reform of our petroleum sector,” he stated.

The President further noted that coincidentally, “I, on July 1, 2022 authorised transfer of assets from the Nigerian National Petroleum Corporation to its successor company, the Nigerian National Petroleum Company Limited, and steered the implementation leading to the unveiling of Africa’s largest national oil company today.

“I therefore thank almighty God for choosing me to consistently play an important role in shaping the destiny of our national oil company from the good to the great.

“NNPC Limited will operate as a commercial, independent and viable NOC at par with its peers around the world, to sustainably deliver value to its over 200 million shareholders and the global energy community, while adhering to its fundamental corporate values of integrity, excellence and sustainability.”

https://newsscrollngr.com/index.php/component/k2/item/29843-nnpc-was-yesterday-unveiled-as-a-private-company-here-s-what-that-means-for-faac-remittances-fuel-subsidy-others

With the same crop of politically appointed directors, the new NNPC is still as bad as the old one until they flush all those bad and rotten eggs out!

Academic exercise in my opinion. How can you say NNPC is now NNPC limited (private company) but the shareholders are ministry of finance and petroleum (government institutions)?? Its still owned by government maybe they just dont want to remit money to federation account or subsidize fuel again?

So nnpc will buy crude then. Who sells the crude?

All grammar, they understand what they are gonna do next but it will be nothing short of crippling the NNPC limited

So if the company is no longer owned by the nigerian government, who owns the company now? Was the company sold? Can Nigerians be told the truth, something very fishy is within the details being given here.

They have finally finished us in this country

Brother I wonder

Xbobtage:
So if the company is no longer owned by the nigerian government, who owns the company now? Was the company sold? Can Nigerians be told the truth, something very fishy is within the details being given here.

Someone should just summarise

fulani is so hell bent on finishing this country!

wotihinre:
Academic exercise in my opinion. How can you say NNPC is now NNPC limited (private company) but the shareholders are ministry of finance and petroleum (government institutions)?? Its still owned by government maybe they just dont want to remit money to federation account or subsidize fuel again?

It means nnpc will remit profit to the shareholders, they can use it for whatever they want to.but on the side of nnpc, they will declare their profit and loss which is what can position them in the international scene
Am not defending anybody though, just explaining

Ok

does it mean that NNPC has been privatised? who now owns NNPC?. it is very possible that buhari now owns NNPC.

it is only a private limited liability company that has limited at the end of its name....this simply means that NNPC has been silently privatised but no details about the owner. No wonder a musician sang "there is fire on the mountain" during the starting of the meeting held yesterday.

Who now controls the crude sales, is it the same NNPC? then after the sales who gets the proceed is the same NNPC that is Privately owned?

Xbobtage:
So if the company is no longer owned by the nigerian government, who owns the company now? Was the company sold? Can Nigerians be told the truth, something very fishy is within the details being given here.

very very fish

Unconfirmed reports I'm getting was the Nigeria government use NNPC to be collecting lon to China they known see they will not able to pay the lon what next to is to make it a private company so Chinese will not take over NNPC.

The government of buhari just put Nigeria in a big mess
Nigerian should prepare for war whit China

wotihinre:
Academic exercise in my opinion. How can you say NNPC is now NNPC limited (private company) but the shareholders are ministry of finance and petroleum (government institutions)?? Its still owned by government maybe they just dont want to remit money to federation account or subsidize fuel again?

His run reportage idbjust sub par, the fg is still a shareholder in the new company and the company pays dividends to the fg, so I don't see how nnpcl dosent have anything to do with faac anymore.

blamingthedevil:




Nigerian National Petroleum Company Limited on Tuesday made it clear that it would no longer remit any money to the Federation Accounts Allocation Committee for sharing to the three tiers of government monthly.

It said this was based on its latest transition from a public corporation to a limited liability company and that it currently owed no money to FAAC, as all monetary arrears to the committee were owed by the old corporation and not the new oil company.

This came as President Muhammadu Buhari officially unveiled the NNPC Limited on Tuesday and declared that the new entity was henceforth free from institutional regulations.

Buhari, who made this public at the Presidential Villa, Abuja, stated that the oil firm would from now on conduct itself under best international business practice.

Before its official unveiling as a limited company, NNPC had failed to make any remittance to FAAC since this year. It had consistently deducted the amount it spends on fuel subsidy monthly, a development that had eroded the funds which it would have remitted to the committee.

Findings showed that between January and May this year, the oil company had spent N1.274tn on petrol subsidy, being the sole importer of the commodity into Nigeria. It, however, described its subsidy spending as under-recovery of a Premium Motor Spirit/value shortfall.

Speaking to journalists on the sidelines of the unveiling of the new oil company, Chief Executive Officer, NNPC Limited, Mele Kyari, stated that the firm was now a private outfit and had nothing to do with FAAC anymore.

Responding to a question on what would happen to NNPC’s monthly FAAC contributions, kyari replied, “We are now a private company; would MTN go to FAAC?”

When probed further to tell if there would be no more FAAC remittances from the company going forward, he said, “We will pay our taxes, royalties and deliver dividends to our shareholders.”

Asked about the arrears to FAAC that were not delivered by the firm over the years, the CEO said, “Which arrears? That’s Nigerian National Petroleum Corporation.”

What NNPC transition implies

NNPC explained some of the changes that had taken place or would happen based on the transition of the firm from a corporation to a limited company.

Kyari said, “You now have a smarter, more responsive and much more accountable company that must act within the premises of all regulations that are in Nigeria for private companies.

“It must also meet the standards of best practice in every industry in terms of governance, complying with regulations and beyond these, eyes are on the ball that your shareholders are expecting you to deliver value to them.

“That value must translate in two forms. One is that they must see dividends and the second part is that you must deliver energy in this country. This company is now in a position to do both of them because it is now a nimble company, can act, borrow and return peoples money quickly.”

He said the firm would now make decisions very quickly, get the best class of people anywhere in the world, inject them into the company and get its Initial Public Offer ready by June 2023.

“I am sure Nigerians will see a very different company in the coming days and months. And we are convinced that by the mid of next year this company will be IPO ready,” Kyari stated.

Proving further explanation, he said, “IPO ready means that you have systems and processes lined on the side of profitability and is a company that is accountable to its shareholders and stakeholders.

“Simply that is what IPO processes look for; to see that you have the assets. Today government has transferred those assets to NNPC and we have very ample assets that nobody has in this country and, of course, not even in Africa.”

Fuel subsidy now Nigeria’s burden, not NNPC

Asked to explain how the oil firm would handle subsidy on petrol being a commercial entity, Kyari replied that fuel subsidy was not a burden of NNPC.

He said, “Subsidy is not NNPC’s burden. Subsidy is the decision of the state and in every jurisdiction anywhere in the world, countries see them differently. In some countries, they put petroleum tax on top of the market price of these products.

“So when decisions are to be made in some jurisdictions they will reduce the level of taxation. That also is another form of subsidy. In some countries, you have zero taxation but you will pay the market price for the commodity. That also in a way, in fiscal system, looks at it from a subsidy point of view.

“In very many countries, a leader can decide that I don’t even want my countrymen to buy it at the market price. I’m ready to reduce that price for them so that they can buy.”

Kyari added, “In either case, whichever way the decision and the policy of the state decides, you know NNPC is there in the space to provide the product to the state at commercial value and, of course, it is also our duty to deliver to the customer at the price that the state wants.

“So it is no longer an NNPC issue. NNPC will have no issue with this. NNPC will be happy to supply because we will now see the state as our customer.”

He further explained that the new NNPC had no need for a sovereign guarantee, as lenders would only ask for such when the company seeking the loan lacked access to its assets.

“Today the assets are in our books and have been transferred to us. That is what banks are looking for, and that is the reason why they ask for a sovereign guarantee,” he stated.

The NNPC boss denied claims that the company’s workforce was bloated, as he stressed that “today our total population is just 7,000 and I believe that with the expansion we have in the plan we are going to get 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 there is no matter of concern for the employees of this company.”

NNPC Limited free from institutional regulations

Speaking earlier during the event, before unveiling the new company, Buhari declared that NNPC Limited was henceforth free from institutional regulations.

He said, “The provisions of PIA (Petroleum Industry Act) 2021, have given the Nigerian petroleum industry a new impetus, with improved fiscal framework, transparent governance, enhanced regulation and the creation of a commercially-driven and independent national oil company that will operate without relying on government funding and free from institutional regulations such as the Treasury Single Account, Public Procurement and Fiscal Responsibility Acts.

“It will, of course, conduct itself under the best international business practice in transparency, governance and commercial viability.”

The President said the government was transforming the petroleum industry to strengthen its capacity and market relevance for the present and future global energy priorities.

“By chance of history, I was privileged to lead the creation of the Nigerian National Petroleum Corporation on the July 1, 1977. Forty-Four years later, I was again privileged to sign the Petroleum Industry Act in 2021, heralding the long-awaited reform of our petroleum sector,” he stated.

The President further noted that coincidentally, “I, on July 1, 2022 authorised transfer of assets from the Nigerian National Petroleum Corporation to its successor company, the Nigerian National Petroleum Company Limited, and steered the implementation leading to the unveiling of Africa’s largest national oil company today.

“I therefore thank almighty God for choosing me to consistently play an important role in shaping the destiny of our national oil company from the good to the great.

“NNPC Limited will operate as a commercial, independent and viable NOC at par with its peers around the world, to sustainably deliver value to its over 200 million shareholders and the global energy community, while adhering to its fundamental corporate values of integrity, excellence and sustainability.”

https://newsscrollngr.com/index.php/component/k2/item/29843-nnpc-was-yesterday-unveiled-as-a-private-company-here-s-what-that-means-for-faac-remittances-fuel-subsidy-others

Nice write up but certain stick out.

Nnpc nus became a private company whose share holders so far are still the fg through a few ministries and some agencies like CBN so nnpc is still a government company guided however by standards of private company (henceforth, expected), nnpcl will still declare profit and loss and remit profits to it's shareholders like every company does.

Madmohamed1:
Unconfirmed reports I'm getting was the Nigeria government use NNPC to be collecting lon to China they known see they will not able to pay the lon what next to is to make it a private company so Chinese will not take over NNPC.

The government of buhari just put Nigeria in a big mess
Nigerian should prepare for war whit China

How?

The fg is still the shareholder of the company.

Lol Buhari and Kyari scam

Firstly, for something of this nature to be effective, the people in charge shouldn't be the same people at the head of the so-called former NNPC! A new board ought to be in place. In fact a lot of considerations beyond just change of name.

What I perceive was done here is simply how the current NNPC boss can retain his office after 2023. More importantly how they can siphon money without being accountable to the state.

An entity can't shed it's name and automatically be absolved from responsibilities it neglected in the past. Even the stupid man asking, "what is NNPC" sounds so infantile, that I wonder the kind of childish brains behind this national scam.

SU50:


How?

The fg is still the shareholder of the company.

they make it private so Chinese will not take over completely known the federal government will cheer the profits whit Chinese if they demand for their money

Zionmdde:

It means nnpc will remit profit to the shareholders, they can use it for whatever they want to.but on the side of nnpc, they will declare their profit and loss which is what can position them in the international scene
Am not defending anybody though, just explaining

This is fraud since it was not bought. It was handed over to private citizens who made no payments for it.

These bastards have defrauded Nigerians.

They have privitized our oil sector without the approval of Nigerians and without transparency.

They have done exactly what atiku said he would he do in 2015.

We need Peter obi to stop this plunder of our country.

We are being robbed blind.

WhatCanIsay:
Lol Buhari and Kyari scam

Firstly, for something of this nature to be effective, the people in charge shouldn't be the same people at the head of the so-called former NNPC! A new board ought to be in place. In fact a lot of considerations beyond just change of name.

What I perceive was done here is simply how the current NNPC boss can retain his office after 2023. More importantly how they can siphon money without being accountable to the state.

An entity can't shed it's name and automatically be absolved from responsibilities it neglected in the past. Even the stupid man asking, "what is NNPC" sounds so infantile, that I wonder the kind of childish brains behind this national scam.

It's now officially a private ATM without the control and oversight of the national assembly.

Expect massive looting on a grand scale.

And Buhari allowed it to happen.
A man that was voted for to protect the common good.

Saudi aramco is state owned and still performs optimally.

These clowns are trying to copy petrobas of Brazil that is a private company.

The difference is that Brazil is not governed by locusts and caterpillars that eat without remnants.

Up till now, we don't even know how much oil we are producing.

Subsidy itself is also another opaque area where massive corruption is being perpetuated.

wotihinre:
Academic exercise in my opinion. How can you say NNPC is now NNPC limited (private company) but the shareholders are ministry of finance and petroleum (government institutions)?? Its still owned by government maybe they just dont want to remit money to federation account or subsidize fuel again?

You dey mind this people??

NNPC is finally going to the grave. I doubt if it doesn't become another liability that'll be costing Nigeria money in their near future.


An opportunity to loot as much as they can just open since the Senate and reps won't call them for interrogation again.

APC have seen that Obi is coming, so they want to finally finish Nigeria before he comes in.

CSTRR:
Saudi aramco is state owned and still performs optimally.

These clowns are trying to copy petrobas of Brazil that is a private company.

The difference is that Brazil is not governed by locusts and caterpillars that eat without remnants.

Up till now, we don't even know how much oil we are producing.

Subsidy itself is also another opaque area where massive corruption is being perpetuated.

They have all the facility but they don't refine a single barrel of oil.


They want to be operating as an independent marketer.
Can they even succeed when we have the likes of independent marketers like Bovas even though their stealing will now go ultra?

The money the old NNPC borrowed to Dangote towards the quick completion of his refinery project Nko?
Nigerians make we ready to pay higher for Petrol in the coming months

This government is not is honest with its citizens. How can NNPC turn to a private company? Who did they sell the company to, when?