The new version of the Petroleum Industry Bill (PIB) has sought to eliminate the group structure in the Nigerian National Petroleum Corporation (NNPC). The draft law has split the NNPC into two commercial entities and scrapped the office of the Group Managing Director. Under the new law, the Minister of State for Petroleum, Dr. Ibe Kachikwu, could as well be the last GMD of the NNPC. Under the new draft legislation, a copy seen by Daily Trust, the NNPC will be split into a national oil company that will be partly privatized and a petroleum assets management company that will be responsible for the management of the NNPC’s oil and gas investments in assets (a role currently played by NAPIMS). Each of the companies will comprise boards with non-executive chairmen, a managing director and executive directors and other members with many years’ experience in management positions in oil companies. The Minister of State for Petroleum Resource Dr. Ibe Kachikwu had in November said the government was working on splitting the NNPC that would probably be passed in sections. The new draft bill titled, “Petroleum Industry Governance & Institutional Framework Bill 2015’ is a 45-page document with 91 sections and three schedules. It has been simplified from the 2012 PIB and focuses on governing institutions with clear and separate roles for the petroleum industry. In the proposed new bill, the oil minister may, in addition to the incorporation of the two entities, incorporate other entities to assume and manage some of the liabilities of the NNPC. The draft bill also provides for a single regulatory body that merges the DPR and PPPRA into a new Nigeria Petroleum Regulatory Commission. The commission, according to the bill, “Shall take up the responsibilities held by the Department of Petroleum Resources (DPR) and the Petroleum Products Pricing Regulatory Agency (PPPRA).” On transfer of assets and liabilities of the NNPC, the draft bill empowers the minister to require the NNPC to transfer employees, assets, liabilities, rights and obligations of the NNPC to the NPAM. Such transfer order, it said, would be binding on the NNPC, such successor entities and all other persons. Dr. Kachikwu had disclosed recently that a second phase restructuring that would see the redeployment of more than half of NNPC staff at the headquarters of the corporation to the subsidiary companies would commence over the next few months. Reacting to the proposal in the new draft bill to unbundle the NNPC, House of Reps member, Ibrahim Baba (APC, Bauchi) said the president had executive powers to effect such changes, so long as it does not affect the position of the Act establishing the NNPC. “Yes, the federal government can do that (unbundle the NNPC), there is what is called the executive right for them to do that. But if there is any change to the Act that established the NNPC, that means they have to submit a proposal for an amendment to the Act. Aside that, they have the power to unbundle it,” he said. Asked whether it is right for the government to begin to implement changes in the NNPC before submitting the proposal to the National Assembly, he said it is not yet time to juxtapose that, until when the changes are known to the lawmakers. “The issue is that, you don’t even know what they are implementing now and therefore, you can’t say whether it is against the law or not. Until we see how the unbundling is implemented, that is when we can say that,” he said. Another lawmaker from Kano who pleaded anonymity said the planned unbundling of the NNPC was part of the reforms President Muhammadu Buhari mentioned in his budget presentation to the joint session of the National Assembly. “Anything which government will do that involves spending money of the country must be approved by the National Assembly. There must be a law that will back it, otherwise, it will not last. Another government can do away with it since no law establishes it. And that is why because of things like this, the past Assembly could not pass the bill into law. For instance, the oil discovered in the northern part of the country like in the Chad Basin; these are some of the new things we expect to be factored in. “But you know, the unbundling of NNPC is one of the reforms the president mentioned in his speech during his budget presentation. And if it’s a reform of structure, they can implement it,” the lawmaker said. The Director, Centre for Petroleum Energy Economics and Law, University of Ibadan, Prof. Adeola Adenikinju, said unbundling the NNPC would allow the new national oil company to operate independently and more efficiently. “To be able to function like a business enterprise that will be good to the capital market to raise funds and take decisions promptly, the corporate governance will be what is obtained primarily in the oil sector”, he said. The Nigeria Programme Coordinator for Natural Resource Governance Institute (NRGI) Mr. Dauda Garuba, said Nigeria ought to have a national oil company that should not be limited to doing business in Nigeria. Garuba said: “Petrobras of Brazil is doing business in Nigeria, can’t Nigeria go to another country and have its own business? That is the huge gain we are going to have from this (unbundling)” he said. The Senior Manager, Civil Society Legislative Advocacy Centre (CISLAC) Kolawole Banwo, said the separation would give a clear cut distinction from the independent regulator and a national oil company that operates commercially with profit in mind with the ability to seek capital and investment outside the usual joint venture calls or tax payers’ money. He added that unbundling the NNPC would make the corporation become a brand that can be commercially viable and efficiently managed. “That way it will be more efficient and compete for space in the commercial world, merit will become the basis of engagement” he said.
Source : dailytrust.com.ng