By BudgIT

On Tuesday, July 20, 2022, the Nigerian National Petroleum Company (NNPC) transitioned into a limited liability company under the Companies and Allied Matters Act (CAMA). The company will now be regarded as the Nigerian National Petroleum Company Limited. What is more?

The NNPC Limited is saddled with the responsibility of coordinating and managing the commercial aspect of the petroleum operations.

It will engage in the business of renewables and other energy investments, and promote the domestic use of natural gas through the development and operation of large-scale gas utilisation industries

With the new development, all assets and liabilities of NNPC will be transferred to NNPC limited. The assets and liabilities not transferred will remain with NNPC until extinguished or transferred to the government.

Also, any debt that has been incurred by NNPC relating to outstanding cash calls under the Joint Venture Agreements will become the debt of NNPC Limited where the assets have been transferred to NNPC Limited and the Government where the assets have not been transferred. While all shares in the NNPC Limited belong to the government and shall be held by the Ministry of Finance Incorporated and Ministry of Petroleum Incorporated in equal proportions on behalf of the Federation.

Meanwhile, employees of NNPC will be transferred to NNPC Limited while maintaining similar conditions of employment. NNPC Limited and its subsidiaries are expected to conduct their affairs on a commercial basis in a profitable and efficient manner.

According to Section 59 of the PIA,  the composition of the NNPC Limited board shall be determined following the Companies and Allied Matters Act provisions and its Articles of Association. The board of the new NNPC Limited is saddled with the responsibility of guiding and determining the business structure, approving the annual budget, establishing the performance objectives and monitoring the overall performance of the organization. To ensure accountability and transparency, an annual audit of NNPC Limited shall be conducted by an independent, experienced and qualified auditor.

BudgIT is a civic group focused on transparency in public finances.