The controversial Petroleum Industry Bill has been broken up into different versions by the Federal Government and is proposing splitting the Nigerian National Petroleum Corporation, NNPC, into two companies — the Nigeria Petroleum Assets Management Company (NPAM) and a National Oil Company (NOC) that would be run on commercial lines and partly privatised.
According to a report obtained from Reuters, Monday, the Federal Government is breaking up the PIB and is replacing it first with a law to overhaul the petroleum sector with the aim of closing loopholes that bred corruption. According to presidential spokesman, Femi Adesina “Mr President will soon split the NNPC into two
entities. One will be an independent regulator and the other one an investor vehicle,” though no timeframe for the restructuring was provided.
In November, the petroleum minister said the government was working on a new PIB that would probably be passed in sections, especially the issue of a new tax regime that has been criticized by major international oil firms, also the Nigeria lawmakers’ opinions have been divided over the content of the current 200-page PIB.
“The first new bill, drafted by the Senate and overseen by the oil ministry, is entitled ‘Petroleum Industry Governance and Institutional Framework Bill 2012’ and aims to create ‘commercially oriented and profit-driven petroleum entities.” It is expected to be presented to senators this week according to the report.
“The bill repeals the Act that created NNPC that contained legal grey areas that allowed mismanagement to go unchecked and billions of dollars in revenues to go seemingly unaccounted for as operating costs rocketed.
“Some noticeably problematic amendments are absent from this bill, such as allowing the oil minister to decide what to do with any surplus or allowing the Nigerian president to allocate oil blocks for exploration.
“But it remains to be seen whether further add-ons to the bill or later decisions will reconcile the conflict between what the new state oil companies need to run and what they should remit to the treasury,” the report added.
It said that “the institutional changes in the new draft have been greatly simplified from the 2012 PIB that created many new regulators and broke up the oil company into separate downstream (refining and retail), upstream oil and gas companies.
“Instead, NNPC will be split into two: the Nigeria Petroleum Assets Management Co (NPAM) and a National Oil Company (NOC),’ the report said, adding that a ‘Special Investigation Unit would also be set up under the NPRC with the powers to seize items and make arrests without a warrant.”
