NNPC plans to sell up to 10% stake through IPO

THE Nigerian National Petroleum Company Limited is considering selling between 5 and 10 percent of its shares to investors through an initial public offering, a move that could introduce public ownership into the state-owned oil company for the first time.

The company’s Group Chief Executive Officer, Bayo Ojulari, disclosed the plan in an interview with Reuters on Tuesday, saying the proposed offer would be targeted primarily at domestic investors, although the company could explore an international listing at a later stage.

Ojulari said NNPC was considering a secondary listing in London or New York after the initial Nigerian offering, potentially giving international investors access to the company’s shares.

The IPO would represent a significant development in the Federal Government’s efforts to reposition NNPC as a commercially driven energy company following its transition from a state corporation to a limited liability company under the Petroleum Industry Act (PIA).

However, the company is not expected to approach the capital market immediately, as preparations could take most of next year.

READ ALSO: Flashback: NNPC under Kyari spent nearly $3bn on Nigeria’s three refineries but none is working

Ojulari indicated that the IPO was unlikely to happen before 2027, suggesting that the company still has substantial work to complete before opening its ownership to investors.

Governance, transparency drive IPO plans

NNPC’s proposed share sale is primarily intended to strengthen transparency and corporate governance rather than raise fresh capital, according to Ojulari.

The company is expected to undergo the necessary preparation to meet the requirements of a publicly listed business, including greater disclosure of its operations, financial performance and corporate structure.

The transition could expose the company to closer scrutiny from shareholders, regulators and the wider investment community.

For investors, the proposed listing would provide an opportunity to acquire shares in a company that occupies a central position in Nigeria’s petroleum industry.

NNPC controls significant interests across the oil and gas value chain, including upstream production, refining, petroleum trading and infrastructure.

Its performance therefore has implications for government revenue, domestic fuel supply, foreign exchange (FX) earnings and the broader energy sector.

The company’s decision to prioritise governance and transparency could also influence how investors assess its financial position, operational efficiency and long-term growth prospects.

READ ALSO: Oyedele pushes NNPC, NLNG listings to grow market to $1trn

Dangote IPO highlights investor appetite

NNPC’s interest in a domestic IPO comes amid strong demand for large Nigerian investment opportunities.

The recently concluded initial public offering of Dangote refinery attracted orders worth N6.4tn, equivalent to about $4.78bn, from retail and institutional investors, according to Ojulari.

The level of demand suggests that Nigerian investors could be willing to participate in a major NNPC share sale, particularly if the offer is supported by clear financial disclosures, credible valuation and confidence in the company’s future performance.

However, investor appetite alone may not guarantee a successful IPO. NNPC would still need to determine the value of the company, the proportion of shares to be offered, the allocation between retail and institutional investors and the conditions under which the shares would be sold.

The company has yet to disclose the specific assets that would underpin the valuation or whether investors would acquire shares in the parent company alone.

The eventual structure of the offer could determine how attractive the IPO becomes to investors seeking exposure to Nigeria’s energy industry.

READ ALSO: After Dangote IPO success, NNPC advances listing plans

Subsidiaries could also enter capital market

NNPC is also considering the possibility of listing some of its subsidiaries separately in the future.

Ojulari said the company could adopt a model similar to that of Abu Dhabi National Oil Company, which has listed several businesses within its corporate structure.

Such an approach could allow NNPC to attract investors into specific areas of its operations rather than relying entirely on a single listing of the parent company.

Separate listings could potentially provide more transparent valuations for individual businesses and enable investors to choose between different segments of the oil and gas industry.

It could also give NNPC greater flexibility in raising capital for expansion, infrastructure development and operational improvements.

However, the company has not identified which subsidiaries might be considered for listing or when such transactions could take place.

READ ALSO: NNPC buys 10% JV stake from Seplat for $281.6m

Chinese investors eye refinery stakes

Beyond the proposed IPO, NNPC is pursuing investments aimed at reviving some of its smaller refineries. Ojulari said Chinese companies had expressed interest in acquiring equity stakes in some of the facilities, rather than limiting their participation to engineering and rehabilitation contracts.

The development could introduce a different approach to refinery rehabilitation, with investors potentially sharing the financial burden and operational risks of restoring the facilities.

NNPC has been in discussions with a Chinese engineering company over the refurbishment of at least one refinery. The company is also considering retaining an equity stake of at least 10 percent in any project involving the facilities.

The Port Harcourt and Warri refineries require substantial rehabilitation, having operated below capacity for more than a decade.

NNPC expects at least one of the smaller refineries to resume operations within three years, although the timeline will depend on the investment structure and progress of rehabilitation work.

The involvement of foreign investors could provide funding, technical expertise and operational support, but the eventual outcome would depend on the terms of the agreements and the capacity of the facilities to operate sustainably.

The proposed IPO and refinery investments form part of NNPC’s broader efforts to improve its commercial operations and attract private capital into Nigeria’s petroleum industry.

Nevertheless, important details remain unresolved, including the company’s valuation, the assets to be included in the IPO, the pricing of shares and the possibility of an overseas listing.

These decisions are expected to become clearer as NNPC advances its preparations for the proposed public offering.