When former Vice-President Atiku Abubakar campaigned for the presidency on the platform of the Peoples’ Democratic Party (PDP) in Nigeria’s 2019 general elections, he made a notable promise: to privatise the country’s hydrocarbon and energy assets. Taking direct aim at the Nigerian National Petroleum Company (NNPC), he argued that “privatising NNPC would be to our advantage. We are not going to lose anything, but we will rather gain a lot.”
The ruling All Progressives Congress (APC) ridiculed the proposal at the time, accusing him of harbouring an undisguised ambition to hand the nation’s crown jewels to himself and his associates. Yet, two and a half years later, in August 2021, President Muhammadu Buhari assented to the Petroleum Industry Act (PIA), substantially delivering on the idea of deregulating the hydrocarbons sector and setting out a vision for repositioning Nigeria’s petroleum industry on a globally competitive footing.
Five years after the Act’s adoption, that vision is being tested against a fast-changing global context and a domestic election season.
An Unusually Complex Piece of Legislation
Comprising 319 sections and eight schedules, the PIA ranks among the most complex laws on Nigeria’s statute books. Most professionals, let alone less-informed citizens, will never read or access it.
At its core, the Act unbundles the NNPC as a state-owned enterprise, separating its regulatory functions from its operations into distinct entities. It also provides for the protection of host community interests and establishes a framework for managing investments in renewables and the energy transition.
The PIA creates two new regulatory institutions: the Nigeria Upstream Regulatory Commission (NUPRC) and the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Separately, it requires the NNPC to be unbundled into a limited liability company under the Companies and Allied Matters Act, with the Ministry of Finance Incorporated (MOFI) and the Ministry of Petroleum Incorporated (MOPI) as authorised shareholders.
In addition, the Act mandates the new NNPC to prepare the country for energy transition by investing in renewables, to act as a downstream supplier of last resort “for security reasons,” and to “engage in activities that ensure national energy security.”
A Hybrid Commercial Model
Relaunched in July 2022 as NNPC Limited, the new commercial entity operates under a business model that is neither fully private nor a traditional state-owned enterprise. The beneficial interest in the company rests with the Nigerian State, and the political presence of the president, who also serves as Minister of Petroleum, is never far from it. Accordingly, the Act empowers the president to appoint its management and Board of Directors. It also allows for the possibility of competitive investment in the company at a future date, when the Board may be reconstituted to reflect the interests of other shareholders.
In pursuing these objectives, the Act requires the new NNPC and its subsidiaries to “carry out petroleum operations on a commercial basis, comparable to private companies in Nigeria carrying out similar activities” and to do so “in a profitable and efficient manner without recourse to government funds,” thereby seeking to “encourage and facilitate both local and foreign investment in the petroleum industry.” In effect, NNPC Limited is expected to compete with its peers within Nigeria and beyond.
To that end, the new NNPC Group now comprises 21 subsidiaries spanning a broad range of interests, including upstream and exploration; downstream and trading; gas and power; engineering and shipping; as well as services and investment.
Balancing Local Talent and Global Expertise
Adapting to a rapidly evolving global energy ecosystem requires the company to retain indigenous talent while remaining open to attracting international expertise where necessary. The PIA is not the only law that applies here. The 1999 Constitution, for instance, obliges government to “harness the resources of the nation and promote national prosperity and an efficient, a dynamic, and self-reliant economy.” The Nigerian Oil and Gas Industry Content Development Act of 2010 likewise mandates the promotion of Nigerian human capital in the sector.
One NNPC subsidiary illustrates how the company has sought to reconcile these obligations. NNPC Exploration and Production Limited (NEPL), the flagship upstream subsidiary in the NNPC Group, has existed since 1988 and holds the NNPC’s interests in operating and exploration licences. In November 2023, the transitional management of the NNPC Group under Mele Kyari recruited internationally to fill the position of Chief Executive of NEPL. He leads a management team that includes nine Nigerians. By the end of 2025, the company had reportedly achieved about 75% growth in average daily production, rising from 203,000 barrels per day in 2023 to 355,000 barrels.
On its face, that performance means more revenue for the country and offers tentative evidence of the potential returns from value optimisation by the newly commercialised NNPC Group. However, any such conclusion must await further evidence of improved protocols in oilfield practice, sustainable investment in energy diversification, and greater transparency in compliance with the Environmental Guidelines and Standards for the Petroleum Industry in Nigeria (EGASPIN). This extends to remediating legacy deficits in oilfield practice that predate the transition to the unbundled NNPC. Greater attention is also required to the needs of host communities. On this broader package, the jury is still out.
Why the PIA Matters in This Election Season
In an election season dominated by electoral integrity, insecurity, and affordability, it is easy to lose sight of the structural issues that underpin, directly or indirectly, the country’s performance on all three. Yet the PIA carries particular salience for at least three reasons.
First, when Nigeria originally created the NNPC in 1977, the country stood on the cusp of a generational energy crisis and the economic bust that accompanied the 1973 Arab-Israeli war. Muhammadu Buhari, then an army colonel, was Petroleum Minister. Over the half century of the NNPC’s existence since then, Nigeria’s management of petroleum earnings has been notoriously dogged by tales of what London’s Guardian newspaper memorably described not too long ago as a “wealth of sorrow.” There was, therefore, an almost poetic symmetry in Buhari returning to the same position 44 years later to end the monopoly and restructure it under the PIA. The competing candidates and political parties must now set out how they intend to optimise this framework.
Second, petroleum is the country’s most strategic natural resource and the main driver of economic activity. It accounts for about 90% of Nigeria’s foreign exchange earnings, over 60% of budget revenue, and up to 5.5% of Gross Domestic Product (GDP). Ongoing events in the Middle East suggest that the obituary of dirty energy may be premature. Nevertheless, energy transition is a reality, and the country needs to know how the parties propose to prepare both the nation and host communities for that eventuality.
Third, the PIA represents arguably the single most constructive achievement of President Buhari’s eight years in office as Nigeria’s fifth elected president. Irrespective of who secures the mandate to lead the country after the elections, the objective of achieving national energy security, established in section 64(k) of the PIA, remains a pressing priority, and the country deserves to know how the competing parties propose to pursue and achieve it.
It is fitting that the fifth anniversary of the Act coincides with an election season defined by the cost of living, including the cost of petroleum products.
