NNPC IPO will likely start with 5% to 10% listing, CEO says

Nigeria National Petroleum Company Limited, NNPC is likely to float a 5% to 10% stake in an initial public offering, focused primarily on the domestic market, with a potential secondary listing in London or New York, CEO Bashir Bayo Ojulari told Reuters on Tuesday.

Further listings of NNPC subsidiaries might also take place, echoing moves by the UAE’s state oil firm ADNOC, he added. Gulf state oil companies have offered outside investors pieces of their businesses  while retaining operational control and largely avoiding opening up their main oil-producing divisions.

Nigeria’s Dangote oil refinery attracted 6.4 trillion naira ($4.78 billion) of orders from retail and institutional investors during its domestic IPO, which closed last week, one person involved in the offering told Reuters.

Preparations for any NNPC listing will likely take at least all of next year, with the primary objective ‌to improve NNPC’s transparency and governance as per Nigerian law, and with raising cash only its secondary objective, he said.

Ojulari also said that Chinese companies had shown interest in buying stakes — rather than just contracting work — in some of Nigeria’s smaller oil refineries that need big repairs, such as Port Harcourt and Warri. He has previously said NNPC was in talks with a Chinese engineering company to refurbish at least one of its refineries, which have not worked at full capacity for more than a decade.

NNPC would retain at least 10% in equity under any deal. He said he expected at least one of those smaller refineries to start producing again within a maximum of three years.