President Muhammadu Buhari has submitted the Petroleum Industry Bill, 2020, to the National Assembly for legislative approval.
The bill proposes the scrapping of the Nigerian National Petroleum Corporation (NNPC) and the Petroleum Products Pricing Regulatory Agency (PPPRA), according to the Punch.
The bill also proposes the creation of the Nigerian National Petroleum Company Limited.
The bill states that the NNPC Limited will be incorporated by the Minister of Petroleum, who together with his finance counterparts, will 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: “There is established the Nigerian Upstream Regulatory Commission (the commission) which shall be a body corporate with perpetual succession and a common seal.
“The commission shall have the power to acquire, hold and dispose of property, sue and be sued in its own time. The commission shall be responsible for the technical and commercial regulation of upstream petroleum operations.”
The proposed law also recommends the creation of the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
Section 29 of the bill read: “There is established the Nigerian Midstream and Downstream Petroleum Regulatory Authority (the Authority) which is a body corporate with perpetual succession and a common seal.
“The Authority shall be responsible for the technical and commercial regulation of midstream and downstream petroleum operations in the petroleum industry.”
There had been attempts to reform the oil industry regulations under this current administration.
The Eighth National Assembly split the Petroleum Industry 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.
The PIGB was subsequently transmitted to Buhari for assent in July 2018, but he eventually declined to sign the bill into law.
According to the Presidency, the provision of the PIGB permitting the Petroleum Regulatory Commission to retain as much as 10 per cent of the revenue generated is one of the reasons Buhari declined to assent to the bill.