The Chief Financial Officer of the Nigerian National Petroleum Company (NNPC) Limited, Umar Ajiya, has stated that the company is not opposed to asset sales as a strategy to boost profit margins and achieve higher returns in the near future.
Ajiya made this disclosure in an interview while speaking on the 2023 audited financial statement of the oil company.
He mentioned that the company is not only aiming to maximize the utilization of some of its assets but is also considering selling those that cannot be optimized for better returns.
“You have a company that is literally just one year old. We started first of July, 2022. 2023 marks our second year of operation.
“We are going to sweat the assets by bringing in partners to sweat them in. We will also sell those assets that we think we cannot sweat ourselves.
“That way, we will rebalance the balance sheet in such a way that the assets are maxed out. We expect the rate of returns to be achieved,” Umar Ajiya said.
NNPC, which reported a 28% increase in profit, reaching N3.2 trillion, holds total assets valued at approximately N246.8 trillion, exceeding Nigeria’s entire Gross Domestic Product (GDP).
NNPC ready for Public Offers
Ajiya also stated that the oil company is prepared for public offers, contingent on shareholders’ willingness to invest. He noted that the Petroleum Industry Act (PIA) recommends a two to three-year financial history to assure investors that the national energy giant is on a profitable path.
He emphasized that NNPC has already demonstrated this profitability in the first two years, adding that shareholders are eager to see the company deliver strong performance once it enters the market and becomes a publicly traded entity.
“To go to the public is basically a shareholder’s decision. We are almost there in the sense that we have at least two or three years of financial history to demonstrate to the investors that the company is on a profitable trajectory. We’ve demonstrated that for the first two years.
“Hopefully, the shareholders will decide how much to sell down and unwind. It’s really the shareholders’ call.
“The shareholders are now averse to selling down. They are eager to see us deliver with some strong performance and they can ask us to enter the market at the appropriate time,” the CFO added.
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