NNPC reveals reason for power failure in Nigeria, says firm not getting paid

The Group Chief Executive Officer of Nigeria National Petroleum Company Limited (NNPC), Mele Kyari, said the company will soon go public and ask Nigerians to buy shares. Kyari disclosed this on Tuesday, July 11, 2023, at the ongoing Nigeria Oil and Gas conference in Abuja.

He said the company needs to get payments for the supply of gas and power, stating that the non-payment for the supply of gas and power is the reason for energy shortage across the country.

He said NNPC is severely affected by lack of payment for gas and power supply. Kyari said investors could not get financing for energy projects due to the country's lack of payments from gas and power buyers.

He said: "There are many issues that affect affordability for everybody, and this is because you can't even afford financing. I think that is the part that people don't look at. You can't even afford financing for it (energy).

"Nobody is going to give you money for a project that you are not going to get back your money. That is what it is. Today, NNPC is exposed to all of you (operators). Not just to the government.

We supply gas, we don't get payment for it. We supply power. We don't get payment for it. "So you can't run any business this way. It cannot be sustainable. It can't create affordable energy, and it (energy) will not be available. So these are multiple issues that are for all of us."

According to Kyari, NNPC is changing as it is now regulated and must pay taxes, royalties, and dividends to shareholders as a competitor oil company.

Punch reports that the NNPCL boss revealed the company is going public soon with an Initial Public Offering (IPO) and would sell part of its equity to the public.

"By the way, you know that we are going Initial Public Offering very soon. We will sell part of our equity. It is in the law. And once that happens, we will not be any different from anybody (private sector operators)," Kyari said.

He revealed that NNPC and its joint partners were producing over 80% of Nigeria's crude oil, stating that the Petroleum Industry Act (PIA) transferred all gas infrastructure assets to NNPC, and the company would run it as a business.

"We are not going to ask for money from the government to run this. We can borrow or use our cash flow to do it," he said.

Analysts revealed that NNPC, which has failed to remit funds to the Federation Account for several years, might not break even in the nearest future. According to them there is the need for structural changes at the firm now that there it has control over other critical companies like LLNG and other companies which generate revenue for the country.

On June 2022, NNPC became a public company with shareholding from companies and individuals in Nigeria. Energy analysts say the company is in a pole position run like Saudi Arabia's Aramco if properly managed.