The Nigerian government is actively considering the sale or partial divestment of assets belonging to the Nigerian National Petroleum Company Limited (NNPC) as the country grapples with declining crude oil production that threatens its economic stability.
Presidential Adviser Reveals Restructuring Plans
Special Adviser to the President on Energy, Olu Verheijen, disclosed the potential asset sale during her appearance at the Nigerian Association of Petroleum Explorationists Conference in Lagos. She emphasized that the Tinubu administration is evaluating performance-based stewardship as crucial for achieving Nigeria's ambitious target of three million barrels per day.
Verheijen expressed serious concerns about NNPC Exploration and Production Limited's (NEPL) current performance, revealing that the state-owned company produces only 220,000 barrels per day, which represents less than 10 percent of Nigeria's total national output. This production level falls significantly short of what is required to drive the country's energy ambitions forward.
The Four R's Framework for Energy Reform
The Presidential energy adviser introduced a strategic framework called the Four R's to guide Nigeria's oil and gas sector reforms: Reserves, Revenues, Reliability, and Responsibility. She stressed that exploration cannot remain theoretical, stating clearly that exploration is not a PowerPoint slide but rather a risky business that requires substantial investment.
Verheijen warned that Nigeria must act quickly as global capital is increasingly shifting toward countries with clearer regulatory and fiscal frameworks. Our investors have never had so many choices, she noted, urging immediate implementation of reforms to enhance Nigeria's competitiveness in the global energy market.
Progress and Opposition to Reform Plans
Despite the challenges, Verheijen highlighted significant progress already achieved under the current administration. She disclosed that the government has unlocked over $8 billion in new final investment decisions through major projects including Ubeta, Bonga North, and HI. An additional $20 billion in investments could follow soon as projects transition from planning stages to physical development.
However, the proposed asset sales face strong opposition from organized labor groups. The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) have described the plan as dangerous and a threat to the country's financial stability.
PENGASSAN President Festus Osifo revealed that government stakes in Joint Venture oil assets currently range between 55% and 60%, emphasizing the significant national interest involved in any potential divestment.
Meanwhile, NNPC Chairman Ahmadu Kida has promised transformational changes, pledging that within five years, NNPC would become Africa's most competitive energy company and a source of national pride. He passionately declared that when people hear NNPC Limited, it should feel like Nigeria scoring a goal against Brazil.
The decision on whether to proceed with asset sales represents a defining moment for Nigeria's energy sector, potentially signaling either bold reform to revive production or sparking fresh controversy over the fate of the country's most prized national corporation.
