Amidst $17bn revenue projection, NNPC seeks bidders for oil, gas assets
The Nigerian National Petroleum Company (NNPC) Limited has disclosed plans to sell stakes in some of its oil and gas assets. According to Reuters, which first reported the matter, the company announced the call for bids through an invitation document. According to the publication, prospective bidders must register online by January 10, after which a […]
The Nigerian National Petroleum Company (NNPC) Limited has disclosed plans to sell stakes in some of its oil and gas assets.
According to Reuters, which first reported the matter, the company announced the call for bids through an invitation document.
According to the publication, prospective bidders must register online by January 10, after which a pre-screening process will be conducted, and qualified companies will be granted access to a secure virtual data room.
“Prequalification will be based on technical and financial capacity, followed by document evaluation, negotiations and regulatory approvals,” the report reads.
Reuters said that although NNPC owns some assets outright and others in partnership with international oil companies, including Shell, Chevron, and Eni, the document did not disclose how much it aims to raise.
The publication added that it did not also disclose the size of the stakes on offer.
Daily Trust reports that the national oil company has joint venture partnerships with various International Oil Companies (IOCs) including Shell Chevron (CVX.N), opens new tab, Eni and TotalEnergies.
In June 2023, barely a fortnight into the inauguration of President Bola Tinubu as Nigeria’s head of state, his Policy Advisory Council had proposed the sale of the major stakes of NNPC in the upstream, midstream and downstream sectors of the oil and gas industry.
In the Policy Advisory Council Report dated May 2023, the council made up of renowned energy professionals, had projected that the federal government would earn about $17 billion from the sale of the NNPC’s majority stakes in the oil and gas assets.
In September, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) alleged the federal government plans to sell off significant stakes in joint venture (JV) assets managed by the NNPC.
“The government is wanting to reduce its stake in these assets, principally, they want to sell some huge percentages in these assets. In some places, sell up 35 percent, in some places sell up 30 percent, so that they will have some cash to spend in other areas. That is the excuse that they are giving,” the association said.
The unions had warned that such moves could destabilise the economy, weaken the oil industry, and jeopardise the welfare of workers.
At a joint press briefing in Abuja, PENGASSAN President, Festus Osifo, and his NUPENG counterpart, Williams Akporeha, rejected the proposal to cut government stakes in JV assets by as much as 30–35 per cent. Currently, the Federal Government holds between 55 and 60 per cent of such assets through NNPCL.
According to the unions, the planned sale would generate quick cash but at the expense of Nigeria’s long-term economic security. They cautioned that reducing government holdings in critical oil assets could bankrupt NNPC, impair its ability to meet obligations such as salaries and welfare packages, and shrink its contributions to the national budget.
“The government wants to reduce its stake in these assets. In some cases, they are talking of selling up to 35 per cent. But we say no.
You cannot mortgage the future of Nigerians for temporary gains,” Osifo declared.
The controversy follows President Bola Tinubu’s directive last month for a reassessment of the NNPC’s 30 per cent management fee and 30 per cent frontier exploration deduction under the Petroleum Industry Act.
Tinubu, in charge of the Economic Management Team led by Finance Minister Wale Edun, stressed the need to optimise government savings, streamline deductions from the Federation Account, and enhance fiscal discipline in a time of global financial strain.