The Chairman of the House of Representatives Committee on Petroleum Resources (Downstream), Hon. Ikenga Ugochinyere, has affirmed that the ongoing reforms at the Nigerian National Petroleum Company Limited (NNPCL) are in line with the objectives of the Petroleum Industry Act (PIA) 2021. Speaking on the sidelines of a gas distribution ceremony held in Abuja by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Ugochinyere noted that NNPCL’s transformation into a commercially viable limited liability company, as mandated by the PIA, has already begun yielding positive results.
He emphasized that before the PIA, NNPCL operated as a state-owned corporation that struggled to generate expected profits. However, with its restructuring, the company is now playing a key role in enhancing national revenue generation and economic transformation.
“The shift brought about by the PIA has allowed NNPCL to function more efficiently as a business entity,” Ugochinyere stated. “Government-run businesses often struggle with efficiency, but NNPCL’s transition to a limited liability company has positioned it for better performance.”
The lawmaker highlighted key provisions of the PIA that have shaped NNPCL’s transformation, including Section 53(1), which mandated its incorporation with the Corporate Affairs Commission (CAC) within six months of the Act’s commencement—a process completed in just six weeks. He further explained that under Section 53(2-5), the Nigerian government retains full ownership of NNPCL through shares held by the Ministry of Finance Incorporated and the Ministry of Petroleum Incorporated.
Another critical aspect of the reforms, according to Ugochinyere, is enhanced corporate governance and financial transparency. Sections 61 and 62 of the PIA require NNPCL’s board members to adhere to global corporate governance standards, with annual audits conducted by independent and qualified auditors. Additionally, Section 63 outlines responsibilities aimed at improving the company’s commercial operations and governance structure.
Ugochinyere stressed that the PIA has ushered in a paradigm shift in NNPCL’s structure, ownership, and operational efficiency. He noted that the reforms have bolstered investor confidence, leading to the establishment of new refineries and the revival of previously dormant ones, thereby enhancing Nigeria’s energy sufficiency.
“The implementation of the PIA has positioned NNPCL as one of the leading national oil companies globally, and Nigerians are already benefiting from these reforms,” he concluded.
