An Initial Public Offering (IPO) would put the NNPC on a bigger international stage, especially if the valuation is high. An IPO would raise significant capital for the state of Nigeria, which can both strengthen the state’s finances and be used to diversify the Nigerian economy. Third, but probably less discussed, the privatization would theoretically shift the burden away from the sole responsibility of the Nigerian state of financing and managing an oil giant through more complicated times. Revival of this privatization discussion in the Nigerian parliament should not be surprising. The great success of the Saudi Aramco’s IPO changed the perspective of many state-owned oil managers and their governing officials.
The only step left is setting the valuation number but that may be the most challenging step in the MBS strategy. Where Saudi Arabia was bold with its $2trn valuation, Nigeria will have to be more strategic. The NNPC and Aramco have different financial performance profiles. Aramco delivered a net income of $111bn in 2018, which was almost twice that of Apple, the world’s most profitable listed company at the time, and more than that of the biggest oil giants, including BP, Chevron ExxonMobil, Shell, and Total.