President Muhammadu Buhari has forwarded the Petroleum Industry Bill 2020 to the National Assembly and has proposed the scrapping of the Nigerian National Petroleum Corporation (NNPC).
According to The Punch, the bill seeks the creation of the Nigerian National Petroleum Company Limited.
The bill states that the NNPC Limited will be incorporated by the Minister of Petroleum, who together with his finance counterparts, will determine NNPC’s assets and liabilities that will be inherited by the new firm.
“The Minister (of Petroleum) and the Minister of Finance shall determine the assets, interests and liabilities of NNPC to be transferred to NNPC Limited or its subsidiaries and upon the identification, the minister shall cause such assets, interests and liabilities to be transferred to NNPC Limited.
“Assets, interests and liabilities of NNPC not transferred to NNPC Limited or its subsidiary under subsection 1 of this section shall remain the assets, interests and liabilities of NNPC until they become extinguished or transferred to the government.
“NNPC shall cease to exist after its remaining assets, interests and liabilities other than its interests, assets, and liabilities transferred to NNPC Limited or its subsidiaries under subsection 1 of this section shall have been extinguished or transferred to the government,” Section 54 (1, 2 and3) of the bill reads in part.
Section 53 of the bill mandates that the minister shall “within six months from the commencement of this Act, cause to be incorporated under the Companies and Allied Matters Act, a limited liability company, which shall be called Nigerian National Petroleum Company (NNPC Limited).
“The minister shall be at the incorporation of NNPC Limited, consult with the Minister of Finance to determine the number and nominal value of the shares to be allotted which shall form the initial paid-up share capital of the NNPC Limited and the government shall subscribe and pay cash for the shares.
“Ownership of all shares in NNPC Limited shall be vested in the government at incorporation and held by the Ministry of Finance incorporated on behalf of the government.”
The bill also proposes the establishment of an agency known as the Nigerian Upstream Regulatory Commission which will be responsible for the technical and commercial regulation of upstream petroleum operations.
In addition, the proposed law recommends the creation of the Nigerian Midstream and Downstream Petroleum Regulatory Authority known as ‘The Authority’.
For over two decades, successive adminstrations have tried, unsuccessfully, to reform the nation’s oil sector.
In an bid to fast-track the passage of the PIB into law, the Eighth NASS split the bill into four parts – the Petroleum Industry Governance Bill, Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and Petroleum Host Community Bill.
The PIGB was passed by the Senate and the House of Representatives in May 2017 and January 2018 respectively.
But in July 2018, Buhari declined to sign the bill into law. One of the reasons cited for his decision was the provision of the PIGB permitting the Petroleum Regulatory Commission to retain as much as 10 per cent of the revenue generated.
He also said the PIGB would whittle down his powers as Minister of Petroleum Resources, and that he did not see any “fiscal content” of the bill.