NNPC Limited - Conflict of Interest Considerations

On April 2, 2025, the President of the Federal Republic of Nigeria exercised his powers under Section 59(2) of the Petroleum Industry Act (PIA) 2021 to appoint Mr. Bayo Ojulari as the new Group Chief Executive Officer (GCEO) of Nigerian National Petroleum Company Limited (“NNPC Limited”). The President also appointed a number of other notable industry practitioners cum investors to the board of NNPC Limited. The appointment follows a broader reconstitution of NNPC’s board in line with ongoing reforms under the PIA.

Background

NNPC Limited was incorporated under the Companies and Allied Matters Act (CAMA) in July 2021 as a limited liability company, following the transition from the former NNPC. The NNPC now operates as a commercially oriented state-owned enterprise.

Our Commentary

While the appointment is consistent with the powers granted under the PIA, it will be important for the administration to maintain clear lines between public and private interests to preserve the credibility of Nigeria’s oil reform agenda. Stakeholders, especially investors and international partners, will be watching closely for signs of continuity, transparency, and alignment with global governance standards.

We fully expect that the board of the NNPC Limited will be subject to a comprehensive Conflict of Interest & Recusal Policy and enhanced policy enforcement procedures, in keeping with standard corporate governance procedures of limited liability companies.

Amongst others, a Conflict of Interest & Recusal Policy will mandate the disclosure of all personal, financial, professional, or familial interests that could compromise or appear to compromise the judgment, loyalty, or ability of new appointees to act in the best interest of NNPC Limited. We expect that such disclosures will be made internally to a designated Ethics Committee and also to the office of the President for oversight and review.

We expect that such disclosures will be formally made upon joining the organization and biannually, in a written Conflict of Interest Declaration Form, or as soon as a new/ potential conflict arises. We expect that such a Conflict of Interest & Recusal Policy will make provisions for extensive recusal procedures requiring the board members to recuse themselves from discussions, deliberations, and voting related to any matter for which a conflict of interest has been disclosed. Typically, such recusals will be recorded in meeting minutes, and the board or appropriate authority may determine additional steps to mitigate any conflicts of interest.