Aliko Dangote: 5 Powerful Things He’s Said About the NNPC
Aliko Dangote, the president of Dangote Group shared some insights on the Nigerian National Petroleum Corporation (NNPC), during the ongoing 2023 annual Value Assurance Review Workshop (AVAR) of the Nigeria Upstream Investment Management Services Limited (NUIMS).
The NNPC whose responsibilities is to manage Nigeria’s oil and gas resources has been a subject of discussion and debate in Nigeria for many years due to some inefficiencies in the sector.
Africa’s richest man has been an advocate for the reformation of the sector and has shared his thoughts on the NNPC. We’ve handpicked some of the powerful opinions he has shared about the NNPC.
NNPC should look out for huge investments to meet demand of their commodities
Aliko Dangote advised the NNPC to welcome massive investments from both local and foreign investors in terms of oil and gas production so as to meet the growing demand for these commodities in Nigeria. According to him, there are several off-takers waiting to buy the products from the corporation.
Dangote, due to his extensive experience in managing businesses across several sectors explained that every good investment manager would always actively seek for investment opportunities, assess them and take shrewd investment decisions towards the development of their sectors.
NNPC can become Africa’s Saudi Aramco with right decisions
Aliko Dangote stated that the NNPC can generate revenue worth billions of dollars if the right steps and decisions are put in place. Also, the Petroleum Industry Act (PIA) has given easy access to the transformation of the oil firm from a government establishment to a commercial entity with no recourse to government funding.
Dangote believes that the corporation has the potential to be transformed into Africa’s Saudi Aramco, one of the world’s largest oil companies. He further advised the corporation not to embrace fear as they have all it takes to scale through. He mentioned the hurdles his company experienced while starting out the refineries a few years before and how far they have come.
He said “I truly believe that NNPCL should be our African Aramco. You have what it takes to take you up there and I am very happy. There is nothing that is impossible. You can make it possible and don’t let anything scare you.”
NNPC should consider reducing cost to avoid high breakeven price
Aliko Dangote advised that the NNP must first consider the cost component of its production. He explained that the prices in industry are clearly out of control as they are determined by the market, however, cost can be controlled inwardly, Dangote advocated for a more aggressive cost targets approach to avoid long payback period as a result of Nigeria’s highest breakeven prices globally for extracting oil and gas.
Dangote noted that the corporation should aim to be the lowest among competitors, benchmarking costs with producers in similar sectors.
He said “we need to strike a delicate balance between encouraging local participation in the oil & gas sector and compromising efficiency and cost,” he advised.”
NNPC can drive the country’s infrastructure as Nigeria’s highest conglomerate
Aliko Dangote pointed the NNPC towards the country’s infrastructure. He says embarking on a real project in Nigeria can be determined by the infrastructure put in place because the infrastructure in the country is not meant for mega projects.
He added that the NNPC is the highest conglomerate in the country and they have the potential to drive proper infrastructure in the country to themselves as well as other sectors ahead.
The role of NUIMS in developing NNPC
Aliko Dangote said the Nigeria Upstream Investment Management Services Limited (NUIMS), an investment arm of NNPC has a huge role in managing opportunities in the sector, federal government’s interest in the oil and gas industry. As well as managing the investments to repay its loans, generate reasonable returns, and fund investment in new opportunities.
He added that they are a partner in the Joint Venture (JV) assets and the concessionaire in the Production Sharing Contract (PSC) arrangements, positions that is built around the proper management of the federal government’s assets.
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