In Response to Critics, NNPC Says It’s Not in Business of Grabbing Assets

•Wabote: No legislation yet on solar in Nigeria

Peter Uzoho

In what seemed to be a pushback to critics insinuating its grabbing and nationalisation of oil and gas assets in the country, the Nigerian National Petroleum Company (NNPC) Limited yesterday clarified that it was, “not in the business of grabbing assets.”

The NNPC also disclosed that it was considering off-setting some of its assets that it no longer wants to companies that would manage them better as it was not interested in managing them.

The Group General Manager, National Petroleum Investments Management Services (NAPIMS), an investment arm of NNPC, Mr. Bala Wunti, made the disclosure in Lagos, yesterday, while speaking during a panel session at the ongoing 45th Society of Petroleum Engineers (SPE) Nigeria Annual International Conference and Exhibition (NAICE) 2022.

The theme of the conference was, “Global Transition to Renewable and Sustainable Energy and the Future of Oil and Gas in Africa,” while the topic of the panel session was: “Sustainable Energy Transition Strategy in Africa: The Role of Legislative Frameworks and Investment Programmes.”

Wunti said the NNPC has responsibility to select the high performing assets to manage them and deliver value to the 200 million Nigerians, who are the shareholders of the company.

The NNPC recently blocked the attempt by Seplat Energy to acquire oil assets belonging to Mobil Producing Nigeria Unlimited (MPNU) in a Sale and Purchase Agreement for $1.283 billion, in addition to about $300 million contingent consideration.

The transaction had encompassed the acquisition of the entire offshore shallow water business of ExxonMobil in Nigeria and was supposed to create one of the largest independent energy companies on both the Nigerian and London Stock Exchanges.

Also, a Director at Conoil Plc, Dr. Ebi Omatsola, recently tackled NNPC Limited and its Group Chief Executive Officer (GCEO), Mallam Mele Kyari, for allegedly doing illegal things in the oil sector around assets divestments and acquisitions and had accused the NNPC of denying Conoil Producing, the right to acquire Oil Mining Lease (OML) 86 and 88 from Chevron, after the company had emerged the preferred bidder and had done all the due diligence.

But speaking yesterday, Wunti said NNPC was not in the business of grabbing assets, explaining that the company was ranking its portfolio and assets and that the national oil company was not interested in keeping assets.

He said just like many organisations in the world are rationalising and reshaping their portfolios and assets, NNPC was doing same to create and deliver value to the shareholders.

Wunti said, “And so, the key point is that, as a commercial company, we will do what we were not able to do before. We are ranking our portfolio; we’re ranking our assets. And there are some assets that will clearly come to be discovered that they are better managed by other companies. We will let them go.

“We’re not interested in keeping assets. We want to give high value assets so that Nigerians would be proud of it. Just like everybody is doing across the world. They are looking at their portfolio and they are reshaping it. We are looking at our portfolio and we are reshaping it.

“We wouldn’t have been able to do that some weeks back, but now, like I said earlier, we will do everything and anything that is legitimate to create value and to give comfort to our people.

“We are not in the business of grabbing assets, at all, far from it. But we have responsibility to select the high performing assets and keep them and create value and deliver that value to the 200 million Nigerians.”

Talking about the position of indigenous companies, the NAPIMS boss said NNPC today prides itself as the largest indigenous company in Nigeria.

According to him, “There’s nobody more local than us. There’s nobody more national than us. There’s nobody more domestic than us. 200 million of Nigerians have shareholding? I don’t know how many of us have shareholding in Shell and Exxon and Seplat and whatever.”

On the issue of energy transition and how it impacts oil and gas investments, Wunti said the whole financial landscape had changed, adding that all investors now want to invest today and get their benefit tomorrow.

This, he said had led to capital for investments becoming very impatient, arguing that the era where lenders deploy their money to oil companies and allow it to go through the rudiments of exploration to exploitation of oil before getting the money back in five to 10 years has gone.

“Nobody wants to do that anymore.  Secondly is that, the finance has become very discriminatory. Of course, in my own view, imprudently, basically driven by what has been said about the narrative painted by the activists (of energy transition).

“The so-called activist investors have penetrated into our boardrooms. When I say ours, into particularly, our partners’ boardroom, and they’re making them to take a decision that cannot be rationalised. People who don’t know anything about energy are now in the middle of making decision on oil and gas industries.

“And that decision is impacting a lot of the profound positions being taken by our partners especially. So what are we going to do? What we are going to do basically is, we need to be able to be in a position to attract capital from all and sundry.

“And that capital means we need to bring money from you! Why can’t you do crowdsourcing? Why can’t you do crowdfunding? Why can’t we do all kinds of creativity? And I think that is where the boys will be separated from the men,” he stated.

Also speaking at the panel, the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Wabote, said there was no specific legislation yet on making solar part of Nigeria’s energy mix.

“I don’t know of any, specifically. But I believe that is all part of the mix. In terms of how do we go forward and in terms of the discussion we are having today in regards to legislative framework, so it’s not going to just be a standalone legislation, because that’s not where we are transiting to,” Wabote stated in response to a question from the audience.

He said gas remains Nigeria’s transition fuel, advocating that the narrative and legislative framework for Nigeria’s energy transition has to be driven by local industry players.