PIA: Govt Can Sell NNPC Shares To Individuals, Says Kyari

There is provision in the Petroleum Industry Act that gives room
for individuals to acquire stakes in the new Nigerian National
Petroleum Company Limited, the Group Managing Director, NNPC, Mele
Kyari, said on Tuesday.

Kyari stated that though this would not happen immediately, the
major shareholders of the new NNPC were allowed in the PIA to sell
shares of the national oil firm to private individuals.

The NNPC boss, who disclosed this during a live television
programme monitored by our correspondent in Abuja, also explained
that the allocation of three per cent oil companies operating
expense to host communities could be higher than the 30 per cent
profit of oil and gas for frontier exploration.

On the transformation of NNPC from a statutory corporation to a
limited liability company, Kyari said the new oil firm would have
government shareholders to be represented by the ministers of
finance and petroleum resources.

“So, these shareholders can decide, as the law provides that
over time, they can reduce the shareholding into some private
shareholding. That means it can be floated subsequently as a
company that is quoted on the stock exchange,” he stated.

The NNPC boss added, “The intension at the very onset is not to
go to that step but there is provision in the law that allows us
ultimately to sell shares of this company.”

Kyari explained that NNPC Limited would serve as a holding
company for all its subsidiaries, adding that the subsidiaries
would operate on their own without encumbrances from the
government.

On what would be the stakes of subnational governments in the
new NNPC, Kyari said the royalties and taxes to be paid by the oil
firm would get to all tiers of government.

He said, “This is very simple. This company will pay taxes and
royalties, which are revenues that accrue to the federation. So
every part of this country and every subnational institution or
government will benefit from it.

“Secondly, this company will pay company income tax that also
comes to the federation for the benefit of all. So, what is
different is that this company will now have profit to make and
declare dividend, which will be decided by the board of directors
of this company.”

He said the whole concept of host community trust fund was
created by the executive and that the fund would be completely
managed by host communities of oil installations.

Kyari noted that the country had failed in ensuring that host
communities had stakes in the continuous operation of oil assets in
their various areas.

“The very reason that they don’t have a stake is that till now,
we have failed as a system to make sure that those values that
should have come and many other interventions did get to them,” he
stated.

Kyari said that changing, adding that more importantly, the PIA
would consolidate interventions and make them work for the
communities.

There is provision in the Petroleum Industry Act that gives room
for individuals to acquire stakes in the new Nigerian National
Petroleum Company Limited, the Group Managing Director, NNPC, Mele
Kyari, said on Tuesday.

Kyari stated that though this would not happen immediately, the
major shareholders of the new NNPC were allowed in the PIA to sell
shares of the national oil firm to private individuals.

The NNPC boss, who disclosed this during a live television
programme monitored by our correspondent in Abuja, also explained
that the allocation of three per cent oil companies operating
expense to host communities could be higher than the 30 per cent
profit of oil and gas for frontier exploration.

On the transformation of NNPC from a statutory corporation to a
limited liability company, Kyari said the new oil firm would have
government shareholders to be represented by the ministers of
finance and petroleum resources.

“So, these shareholders can decide, as the law provides that
over time, they can reduce the shareholding into some private
shareholding. That means it can be floated subsequently as a
company that is quoted on the stock exchange,” he stated.

The NNPC boss added, “The intension at the very onset is not to
go to that step but there is provision in the law that allows us
ultimately to sell shares of this company.”

Kyari explained that NNPC Limited would serve as a holding
company for all its subsidiaries, adding that the subsidiaries
would operate on their own without encumbrances from the
government.

On what would be the stakes of subnational governments in the
new NNPC, Kyari said the royalties and taxes to be paid by the oil
firm would get to all tiers of government.

He said, “This is very simple. This company will pay taxes and
royalties, which are revenues that accrue to the federation. So
every part of this country and every subnational institution or
government will benefit from it.

“Secondly, this company will pay company income tax that also
comes to the federation for the benefit of all. So, what is
different is that this company will now have profit to make and
declare dividend, which will be decided by the board of directors
of this company.”

He said the whole concept of host community trust fund was
created by the executive and that the fund would be completely
managed by host communities of oil installations.

Kyari noted that the country had failed in ensuring that host
communities had stakes in the continuous operation of oil assets in
their various areas.

“The very reason that they don’t have a stake is that till now,
we have failed as a system to make sure that those values that
should have come and many other interventions did get to them,” he
stated.

Kyari said that changing, adding that more importantly, the PIA
would consolidate interventions and make them work for the
communities.