Abuja – President Muhammadu Buhari said on Tuesday Nigeria’s state-run oil firm would now operate as a fully commercial business without government intervention or funding.
The Nigerian National Petroleum Company Ltd. was unveiled in the capital Abuja a year after Buhari signed the Petroleum Industry Act to overhaul the country’s oil industry.
“We are transforming our petroleum industry to strengthen its capacity and market relevance for the present and future global energy priorities,” Buhari said.
A “commercially-driven and independent national oil company that will operate without relying on government funding” will attract foreign investment to the petroleum industry, he declared.
NNPC Ltd. is registered as a limited company but is still state-owned. It bears the same name as its predecessor, which was set up in 1977 at the height of the first oil boom.
The OPEC member nation has lured only a small fraction of global petroleum investments.
Its oil sector is struggling with an entrenched reputation for corruption, inefficiency, high production costs and security concerns.
According to Minister of State for Petroleum Resources Timipre Sylva, Nigeria would have been able to lure around 50 billion dollars in new foreign investments if it had passed the oil law earlier.
Nigeria currently produces around 1.4 million barrels of oil per day (bpd), less than its OPEC quota of 1.8 million bpd because of large-scale oil thefts, vandalism and low production capacity.
Despite this, income from energy sales accounts for almost all foreign exchange earnings and about half of government revenue.
The government is worried about the pressure of time as the world’s long-term appetite for fossil fuels diminishes because of climate change.