FG splits PIB, to break NNPC into two companies

The Federal Government has broken up the controversial Petroleum Industry Bill into different versions and is proposing splitting the Nigerian National Petroleum Corporation into two companies – the Nigeria Petroleum Assets Management Company and the National Oil Company – that would be run on commercial lines and partly privatised.

 According to a report obtained from Reuters on Monday, the Federal Government is breaking up the PIB and is replacing it first with a law to overhaul the petroleum sector with the aim of closing loopholes that bred corruption. Under the draft legislation, the report stated that the NOC will be an “integrated oil and gas company operating as a fully commercial entity and will run like a private company”.

 According to the report, the onus would be on the board of the company to make profits and raise its own funding. The NOC would be expected to keep its revenues, deduct costs directly and pay dividends to the government. To start off, the report stated that the NOC will receive about $5 billion or at least the five-year average of the amount of money NNPC had to put into joint venture operations, while 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.

 If passed, the report further stated that the law would also create a Nigeria Petroleum Regulatory Commission 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.

SOURCE: VANGUARD