News in brief: Aliko Dangote has said that NNPC can become Africa’s Saudi Aramco but has to pivot from a watchdog to an aggressive investment manager. He encouraged it to make massive investments in the oil and gas industry, cut costs, revise policies and grow its investment portfolio to increase its presence on the market.
Aliko Dangote, Africa’s richest man and a major Nigerian stakeholder, has said that the country’s oil production company can be to Africa what Saudi Aramco is to Saudi Arabia. According to him, the Nigerian National Petroleum Company Limited (NNPC) has what it takes to rival the $2 trillion mega corporation.
However, he said that the company’s investment arm, NNPC Upstream Investment Management Services or NUIMS, has to pivot from being a watchdog to an ‘aggressive investment manager’ before this can happen. His statement came from his speech at the 2023 NUIMS Annual Value Assurance Review Workshop.
Dangote stressed that the company needs to make ‘massive investments’ in the oil and gas industry to meet demands. He gave an example of how his Nigerian businesses require 635 million standard cubic foot (scf) of gas daily but only gets about 300 million scf per day, which is not enough.
In addition, the business magnate said that the oil producer should look into cutting costs. He encouraged the NNPC to reward staff that meet aggressive cost targets with ‘juicy bonuses’. The company can do the same thing with producers as well.
Another important area that the Dangote Company head mentioned that needs revisiting was existing policies. He said that NNPC should strike a balance between encouraging local participation in the sector and compromising efficiency and cost. This last part may include hiring foreign expatriates, as it did in March 2023, which caused a public outcry.
NNPC’s next course of action should be growing its investment portfolio, Dangote advised. If the company can do this, it will increase its presence on the market while reducing International Oil Companies (IOCs) influence.
Dangote said that the oil company’s success is directly tied to the country’s. “Without you doing well, the country cannot do well,” he buttressed.
The advice is timely because of the Petroleum Industry Act(PIA) 2021 which attempts to overhaul the sector. It empowers the NNPC to become more operationally efficient, grow its portfolio and increase its net earnings.
