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In achieving these broad objectives, the new NNPC Ltd must have a Clear Mandate, Financial Autonomy, Operational Independence and Managerial capacity/capability, which the current structure and its management practices could not achieve.
The post reform institutions will include:
– The Minister of Petroleum Resources
– National Petroleum Directorate
– The Nigerian Petroleum Inspectorate
– NNPC Ltd
– Petroleum Products Regulatory Authority
– National Petroleum Asset Management Agency, and
– National Petroleum Research Centre
– Petroleum Equalisation Fund
– Petroleum Technology Development Fund, and
– Petroleum Training Institute
Apart from the reorganisation of the NNPC, what other effects will the Petroleum Industry Bill have?
One of the key tasks of the Oil and Gas Sector Reforms Implementation Committee was to transform the broad provisions of the National Oil and Gas Policy into enabling legislation. Accordingly, a Draft Petroleum Industry Bill has been completed. It is a document covering most of the relevant issues pertaining to Oil and Gas exploration, production, transportation and marketing in the country. Other issues covered include matters of state participation and control, fiscal issues, regulation, safety, health and environmental concerns; and finally issues regarding community relations and empowerment. The enabling legislation is holistic in depth and scope, and brings the Nigerian Oil and Gas Industry well into the 21st century modernity.
The Petroleum Industry Bill creates the institutions of reform:
– The Nigerian Petroleum Directorate, NPD
– Nigerian Petroleum Inspectorate, NPI
– Petroleum Products Regulatory Authority,PPRA
– National Petroleum Asset Management Agency, NAPAMA
– National Petroleum Research Centre, NPRC
– Provides for the incorporation of the Nigerian National Petroleum Company Ltd (NNPC)
– Includes amendments/updated laws recreating e.g. the Petroleum Equalisation Fund
The post reform institutions include:
– The Minister of Petroleum Resources
– National Petroleum Directorate
– Nigerian Petroleum Inspectorate
– NNPC Ltd
– Petroleum Products Regulatory Authority
– National Petroleum Assets Management Agency
– National Petroleum Research Centre
– Petroleum Equalisation Fund
– Petroleum Technology Dev Fund, PTDF
– Petroleum Training Institute
The Bill:
– Lays down broad guidelines for the Nigerian Oil and Gas Sector in ‘Fundamental Premises’
– Provides for a Minister with supervisory powers over the industry, with the assistance and guidance of fully qualified Directors-General of the Institutions.
Provides guidelines for:
– Upstream Sector (Oil and Gas)
– Downstream Sector
– Downstream Natural Gas
– Health, Safety and Community Issues
– Fiscal Issues
– Nigerian Content
Creates a liberalised, deregulated professional oil and gas sector and institutionalises the Incorporation of Joint Ventures whereby:
– All existing Joint Venture operations in the country shall be converted into incorporated autonomous commercial entities, IJVs
– The existing Shareholder Agreements between the NNPC and the IOCs shall form the basis of the new IJVs
– The concept of cash call for funding operations would be replaced by equity, debt and third party finance.
– The Incorporation process including capitalisation, restructuring of the new companies would be carried out through negotiations with the IOCs during a defined transition period.
– Each IJV shall have its Independent Governance Structure (Board and Management) to be defined in the Shareholder Agreements.
– The IJVs will be governed by the PPT Act regardless of incorporation under Companies and Allied Matters Act.
