How NNPC can use PIA to boost profit

The Nigerian National Petroleum Corporation (NNPC) is on the brink of a major transformation as it prepares to be incorporated next month under the provisions of the Petroleum Industry Act (PIA). The move aims to turn the state-owned company into a profitable entity listed on the stock exchange. In a recent interview on CNBC Africa, Femi Oladehin, a Partner at Argentil Capital Partners, shed light on the challenges and opportunities that lie ahead for the NNPC. Oladehin highlighted the need for transparency and accountability within the NNPC, which has operated with opacity for decades. While the PIA sets noble intentions for the NNPC, the cultural shift required for the company to become profitable will be a significant uphill battle. Oladehin expressed skepticism about the current management's ability to bring about the necessary changes to drive profitability effectively. He emphasized the importance of corporate governance in achieving sustainable success, pointing out concerning governance issues within the NNPC, such as the president appointing the entire board. Oladehin stressed that the path to profitability for the NNPC will require a fundamental shift in organizational culture and governance practices. Despite the potential for the NNPC to become one of Africa's most profitable companies, Oladehin cautioned that the journey towards accountability and profitability would be long and arduous. Drawing a comparison with the Nigeria Sovereign Investment Authority (NSIA), Oladehin noted the differences in the initial professional setup of the two organizations, highlighting the challenges posed by the NNPC's deep entanglement in Nigeria's political landscape. He raised concerns about the historical prevalence of corruption and inefficiency within government-run institutions in Nigeria, casting doubt on the NNPC's ability to navigate the complex web of political interests and entrenched practices. Oladehin underscored the crucial role of governance in setting the foundation for the NNPC's success, urging a proactive approach to reform and professionalization within the organization. While acknowledging the potential for the NNPC to transform into a well-run institution, Oladehin maintained a cautious outlook on the company's prospects, citing the need for significant structural and cultural changes to realize its full potential. As the NNPC prepares for a new era of corporate governance and profitability, the road ahead remains riddled with challenges that will require bold leadership and unwavering commitment to reform.