After prematurely announcing the now stalled $3bn loan from the African Export-Import Bank (Afreximbank), Mele Kyari, the Group Chief Executive Officer of the NNPC Limited, has again, in his desperate bid to remain in office, decided to fast-track an Initial Public Offer (IPO) for the cash strapped corporation, THEWILL can exclusively report.
This is coming as multiple knowledgeable oil industry sources, last weekend, challenged Mr. Kyari’s claim that Nigeria has ramped up crude oil production to about 1.6m barrels daily, dismissing the claim as bogus and unrealistic. Multiple industry players, including an operator contacted by THEWILL, put the actual production at around 1m barrels per day.
“Why are we not seeing increased revenue if indeed the figure Kyari is claiming is true? Our actual oil production is around one million bpd mainly from deepwater assets offshore,” one of the sources, a major player in the oil sector, said.
Another source in the investment banking community, who spoke to THEWILL anonymously, derisively laughed off the IPO proposition as a “calculated attempt to again embarrass the Tinubu Administration.”
“No market professional would support an NNPC public offering absent a solid due diligence exercise and a total clean up of the corporation’s account,” the source, an investment banker, said, asking not to be identified in this report.
The Afreximbank loan stalled because the lender was already over-exposed to the NNPC, which misrepresented the use of proceeds. Kyari had told Afreximbank that they needed the money to augment exploration and production but after the deal was inked, started claiming it was to shore up the value of the naira, a revelation that spooked the other lenders in the syndicate with Afrieximbank leading to a withdrawal of commitments.
THEWILL recalls that a similar development occurred with the financing of the AKK gas pipeline. The NNPC had entered into an agreement with Chinese lenders, with the Federal Government backing the deal with a sovereign guarantee. Unfortunately, the financing fell apart when the Kyari-led NNPC capriciously revoked the oil blocks of Chinese operator, Addax, and in retaliation, the Chinese lenders withdrew from the funding arrangement. The cash-strapped NNPC Limited has expended over $1.2bn of its own money to fund the construction of the pipeline with no visible source of gas and no single off-taker of the gas.
“Everything about the project is based on promises and hope. Meanwhile, NNPC finances are in tatters with debts and poor production from NNPC assets weighing down the corporation,” the source added.
The NNPC, under Kyari, has struggled to keep the country’s oil flowing due to multiple factors including poor management and lack of fresh investments in oil production. The four state-operated refineries remain shut down and have failed to resume operation, missing several deadlines Mr. Kyari and the NNPC had promised.
We reliably athered authoritatively that President Bola Tinubu, who is currently in India for the Nigeria-India Presidential Business Forum holding on the sidelines of the G20 meeting in New Delhi, is actively scouting for a replacement for Mr. Kyari, who was appointed by former President Muhammadu Buhari in 2019.
Garba Deen Shehu, the Spokesman of NNPC Limited, did not respond to our phone calls or messages seeking comments for this report.
