Nigeria’s President Muhammadu Buhari has unveiled a revamped national oil company, which he says is commercially run and not dependent on government funding.
Buhari says the Nigerian National Petroleum Company would improve energy security amid shortages and high prices. However, energy experts in Nigeria, Africa’s biggest oil producer, doubt whether necessary reforms will accompany the renaming.
The transition of the Nigerian National Petroleum Corporation (NNPC) to a limited company took place at a high-profile state event in Abuja on Wednesday.
During the meeting, President Muhammadu Buhari and other senior government officials unveiled the new company’s logo and said its asset base would be announced shortly.
Buhari said this is a milestone for Nigeria’s oil industry and would ensure energy security in the country.
The president also said the new oil company would operate independently, without relying on government funding and regulations.
According to the president of the West African nation, the process will allow Nigeria to generate higher oil revenues and meet local energy needs.
“Our country attaches great importance to creating the right atmosphere that supports investment and growth to drive our economy forward and continue to play an important role in sustaining global energy needs. We are transforming our oil industry to strengthen its capacity and market relevance to present and future energy priorities,” he said.
The transition was prompted by the signing of an oil industry bill by Buhari last August.
Nigeria is Africa’s largest oil producer and also has huge reserves of natural gas. But the country lacks refineries and a reliable power grid, leaving millions of people struggling with regular power outages, fuel shortages and high energy prices.
Some experts, like Emmanuel Afimia, founder of Abuja-based energy consultancy Enermics Consulting Limited, say oil company executives need to go beyond normal business.
“One of the problems we have always had in Nigeria is the problem of implementation. If the NNPC can really do the right thing, if the regulators can also do the right thing, then I believe the NNPC can achieve its goals of maximizing opportunity, maximizing performance and also maximizing profit in the industry,” he said.
Afimia says that if the company is well managed, it will attract more investment.
“This solves funding problems because the NNPC can simply go into your wallet to bring in funds to finance new oil and gas projects without having to wait for the President or Parliament to approve anything, this would ensure that the country could move quickly and investors will have enough confidence to invest in NNPC,” he said.
Officials say the company may be ready to publicly list its shares by the middle of next year.
Many will be watching how – and if – rebranding changes the status quo.