THE Federal Government in a proposed bill seeks to modify the controversial Petroleum Industry Bill into different versions. In the same vein it plans to split 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.
The bill as advocated will see to the overhaul of the petroleum sector with the aim of closing loopholes that bred corruption reports Reuters.
Under the draft legislation, the NOC will be an “integrated oil and gas company operating as a fully commercial entity and will run like a private company”, the report indicated.
Government plans to make available start fund of about five billion Dollars to the NOC or at least the five-year average of the amount of money NNPC had to put into joint venture operations. In the plans also includes that it would be partially privatised with the Federal Government divesting a minimum of 30 per cent of its shares in the company within six years of its incorporation.
NPAM, on the other hand, is expected to manage assets where the government is not obligated to provide any upfront funding. “These include oil licences run under production-sharing agreements in which independent oil companies cover operating costs and pay tax and royalties on output,” the report noted.
A major shift from the bill when compared with the PIB drafts is that the law curtails ministerial powers as board appointments are made by the Nigerian president and confirmed by the Senate.
If passed, the report further stated that the law would also create a Nigeria Petroleum Regulatory Commission (NPRC) to oversee everything from oil licence bid rounds to fuel prices, while a Special Investigation Unit would also be set up under the NPRC with the powers to seize items and make arrests without a warrant.
The first new bill, drafted by the Senate and overseen by the oil ministry, according to the report, is entitled “Petroleum Industry Governance and Institutional Framework Bill 2015” and aims to create “commercially oriented and profit driven petroleum entities”.
The Bill is expected to be presented to senators this week.
