KEY POINTS
- NNPC plans to sell between 5 per cent and 10 per cent of its shares through an initial public offering.
- The offer will target domestic investors first, with a possible second listing in London or New York.
- CEO Bayo Ojulari says improving transparency and corporate governance is the primary objective, while raising capital is secondary.
- Preparations are expected to take at least through 2027, meaning the share sale is unlikely before then.
- Chinese companies have also expressed interest in taking equity stakes in some of Nigeria’s smaller refineries.
MAIN STORY
The Nigerian National Petroleum Company (NNPC) plans to sell between 5 per cent and 10 per cent of its shares through an initial public offering (IPO), in a move that could give private investors their first opportunity to own part of the state-owned oil company.
NNPC Chief Executive Officer, Bayo Ojulari, disclosed the plan in an interview with Reuters on Tuesday, saying the offering would be targeted mainly at domestic investors. The company is also considering a possible second listing in London or New York, although no decision has been made on the foreign market.
Ojulari said the proposed listing was primarily intended to improve transparency and corporate governance, as required by Nigerian law. Raising capital, he explained, was a secondary objective.
Preparations are expected to take at least all of next year, placing the proposed share sale beyond 2026. The offering could become one of the largest in Nigeria’s history, opening a company that has long faced criticism over transparency to public shareholders.
THE ISSUES
The proposed IPO raises important questions about how NNPC will determine the value of the shares, which assets will be included and how much influence public investors will have over the company.
Ojulari did not disclose which assets would form part of the offering. However, he indicated that NNPC could eventually list some of its subsidiaries separately, following a path similar to Abu Dhabi National Oil Company (ADNOC) in the United Arab Emirates.
The approach would allow the company to sell minority stakes while retaining operational control. This is similar to the strategy adopted by some Gulf state oil companies, which have opened parts of their businesses to outside investors without fully listing their main oil-producing operations.
The decision to prioritise Nigerian investors also comes amid strong domestic demand for large share offerings. The domestic IPO of the Dangote oil refinery, which closed the previous week, reportedly attracted orders worth N6.4tn, equivalent to $4.78bn, from retail and institutional investors.
That level of demand suggests the Nigerian market could provide a substantial investor base for NNPC’s proposed offering, although the eventual response would depend on the shares’ valuation, the assets included and the terms of the sale.
WHAT’S BEING SAID
“Raising money is only a secondary goal.”
- Bayo Ojulari, Chief Executive Officer, NNPC, as reported by Reuters.
WHAT’S NEXT
Beyond the proposed IPO, NNPC is exploring equity partnerships with Chinese companies interested in some of Nigeria’s smaller refineries.
Ojulari said Chinese firms had expressed interest in acquiring stakes in the facilities rather than limiting their involvement to repair contracts. The Port Harcourt and Warri refineries require major rehabilitation and, according to the report, neither has operated at full capacity for more than a decade.
NNPC has previously disclosed discussions with a Chinese engineering firm to refurbish at least one of the plants. Ojulari said the company would retain at least a 10 per cent stake in any equity arrangement.
He expects at least one of the smaller refineries to resume production within three years at most.
For the IPO, key details remain unresolved, including the assets to be listed, share pricing, investor allocation and whether the company will pursue a foreign listing alongside the domestic offer. Based on the proposed preparation timeline, NNPC shares are unlikely to begin trading before 2027.
BOTTOM LINE
NNPC’s proposed IPO could mark a significant change in the ownership and public accountability of Nigeria’s state-owned oil company. However, the size of the stake sale alone will not determine its significance. Investors will also need clarity on the company’s valuation, the assets included, governance arrangements and the extent of public shareholders’ influence.
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