President Muhammadu Buhari has taken a decisive step transmitting the Petroleum Industry Bill 2020 to the National Assembly and proposing the creation of the Nigerian National Petroleum Company Limited.
The bill, also proposes the scrapping of the Nigerian National Petroleum Corporation NNPC and the Petroleum Products Pricing Regulatory Agency PPPRA.
The bill states that the NNPC Limited will be incorporated by the Minister of Petroleum, who together with his finance counterparts. They will jointly determine NNPC’s assets and liabilities that will be inherited by the new firm.
Section 54(1, 2 and3 )) reads in part, “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.”
According to Section 53 of the bill, 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.
Section 4 of the bill states in part, “There is established the Nigerian Upstream Regulatory Commission (the commission) which shall be a body corporate with perpetual succession and a common seal.
The slump in global crude oil prices, from a high of $115 per barrel in mid-2014 to $28pb in January 2016, combined with the regulatory uncertainty occasioned by the delay in passing the PIB worsend the state of the industry.
In the first term of Buhari, 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 — in a bid to fast-track its passage into law. The PIGB was passed by the Senate and the House of Representatives in May 2017 and January 2018 respectively.
After its passage by the NASS, the PIGB was transmitted to President Buhari for assent in July 2018, the bill was however not signed into law. According to the Presidency, the provision of the PIGB permitting the Petroleum Regulatory Commission to retain 10% of the revenue generated. This formed the bases for the Presidents refusal to assent to the bill.
(C) Control TV 2020.
