The Group Managing Director of the Nigerian National Petroleum Company Limited (NNPC), Mele Kyari, says there is provision in the Petroleum Industry Act (PIA) that allows individuals to acquire stakes in the new state oil firm.
The NNPC boss, who said this in a live television programme monitored in Lagos, explained that stated that though this would not happen immediately, the major shareholders of the new NNPC were allowed in the new law to sell shares of the national oil firm to private individuals even as 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.
Kyari said as the company transforms from a statutory corporation to a limited liability company, government shareholders would 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 noted.
“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 added.
He explained that the new NNPC Limited would serve as a holding company for all its subsidiaries, and the subsidiaries would operate independently without interferences from the government while the royalties and taxes to be paid by the oil firm would get to all tiers of government.
“This is very simple, the 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.” Kyari said.
He also explained that 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.