Nigeria’s energy law has a feature is an answer to what many in the country have been asking for. Divestment of the Nigerian National Petroleum Corporation (NNPC) into smaller units with specific roles, which many believes will make the corporation more efficient and effective. And now, the Petroleum Industry Bill 2020 has listed specific functions agencies that will replace the state oil firm when the proposed law is passed and signed by the President Muhammadu Buhari.
News Central obtained a copy of the bill obtained. Three agencies are to be created from the NNPC, these will be the Nigerian Upstream Regulatory Commission (NURC), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigerian National Petroleum Company Limited (NNPC Limited).
The bill states that the NURC shall be responsible for the technical and commercial regulation of upstream petroleum operations and ensure compliance with all applicable laws and regulations governing the upstream petroleum operations.
It would ensure that such operations are carried out in a manner to minimise waste and achieve optimal government revenues among other functions.
The NMDPRA, on its part, shall be responsible for the technical and commercial regulation of midstream and downstream petroleum operations in Nigeria’s petroleum industry.
The bill explains that the functions of the NMDPRA would be limited to midstream and downstream petroleum operations in the petroleum industry.
This is meant to ensure efficient, safe, effective and sustainable infrastructural development of midstream and downstream petroleum operations.
The agency is also expected to advise government agencies and other stakeholders on commercial matters relating to tariff and pricing frameworks.
The bill explains that NNPC Limited will be incorporated six months after the commencement of the Act by the minister under the Companies and Allied Matters Act, as a limited liability company.
It states that the minister shall 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.
The bill states that ownership of all shares in NNPC Limited shall be vested in the Federal Government at incorporation and held by the Ministry of Finance Incorporated on behalf of the government.
It adds, “The NNPC Limited and any of its subsidiaries shall conduct their affairs on a commercial basis without recourse to government funds and their memorandum and articles of association shall state the restrictions.”
The proposed bill further provides that the cost of winding down the assets, interests and liabilities of NNPC shall be borne by the Federal Government.
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