The African oil and fuel industry is facing a monetary attack due to a combination of COVID-19, militant shareholders and so-called CIO environmentalism such as Shell, Total and BP. While the big oil companies seem to be preparing for a crisis. energy transition and peak oil demand, African countries bet long-term on hydrocarbons, while Shell, BP and Total are in the headlines with their diversification abroad from oil, the largest oil and fuel manufacturer in sub-Saharan Africa, Nigeria, as a component of a long-awaited reform of Nigeria’s oil and fuel sector , which has been plagued by corruption, fraud and mismanagement through previous governments, an invoice proposing a imaginable initial public offering from nigerian national oil company National Petroleum Corporation (NNPC) is now being debated in parliament. In the new proposal, the NNPC will be remodeled into a limited liability company, operating entirely on an advertising basis. or be monitored through Nigeria’s Ministry of Finance.
The greatest effect of this policy if followed is that there will be no further government investment for NNPC operations. In the case of an IPO, NNPC shares will be submitted at market price through an open, transparent and competitive bidding process. To assist a imaginable stock sale, the invoice stipulates that an annual audit must be conducted through an independent auditor.
The existing solution comes after 20 years of political struggles over the role and the long term of the NNPC. The primary explanation for why this competitive stance replacement appears to be the good luck of Aramco’s IPO, the prospect of generating $ 200 billion, and the prospect of pricing the NOC at $ 2 trillion. Another essential explanation of why it is the greater foreign pressure on the financing of hydrocarbons in the world. To counter this tension, African NOCs like NNPC are now contemplating restructuring their operations and opening their accounts. NNPC’s potential IPO will not attract the same investors as Aramco, but African personal investors and perhaps other NOCs and their sovereign wealth (SWF) budget will have their eyes on Nigeria’s progression. Array There are already signs that the Arab, Russian and Chinese investment budgets are contemplating investing. While Nigeria’s oil and fuel sector has a questionable reputation, the country’s reserves at sea and at sea are vast and produce the right qualities of crude. At the same time, NNPC reserves and projects are seen as a hotspot for investors looking for other emerging markets in Africa. The NNPC will also be of interest to local investors or operators such as Oando. The divestment and withdrawal of Shell, Total and others from the sub-Saharan region, specifically offshore Nigeria, has opened up new opportunities for incumbents or new investors, such as Aramco and ADNOC.
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Despite the privatization movement, some critics continue to say that the new plan does not go far enough. An earlier privatization attempt in 2012 aimed to do something similar but even more ambitious. At that time, a full privatization had been proposed with a constant target date for the initial public offering and a constant value range. This policy still wants to be fully approved by the Nigerian passing government and parliament before a directory on Nigeria’s inventory exchange can take place.
If Nigeria can attract much-desired monetary attention, we can expect to see more national oil corporations following suit. The existing monetary crisis and lack of access to money markets mean that privatization and the opening of new monetary opportunities are a necessity for those Nigeria, Angola and other African oil and fuel manufacturers want to monetize their own resources, assets that those nations and companies cannot lose.
By Cyril Widdershoven for Oilprice. com
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