FG Reviews PIB, Splits NNPC Into 2

Barring any last minute change in plans, the federal government is set to split the Nigerian National Petroleum Corporation (NNPC) into two.

A Reuters report yesterday said the government is putting finishing touches to draft that will also revisit the controversial Petroleum Industry Bill (PIB) which had stalled for years with a view to replacing it first with ‘a law to overhaul the sector which aims to close loopholes that bred corruption’.

The report said under the new plan, the NNPC will be split in two – rather than a series of units as envisaged by the stalled 2012 bill. It added that a National Oil Company, which will be run on commercial lines and partly privatized, will emerge.

Nigeria’s lawmakers have been divided over the contents of the current 200-page PIB.

In November, the petroleum minister said the government was working on a new PIB that would probably be passed in sections, particularly the thorny issue of a new tax regime that has been criticized by major international oil firms.

“The first new bill, drafted by the Senate and overseen by the oil ministry, is entitled ‘Petroleum Industry Governance and Institutional Framework Bill 2012’ and aims to create ‘commercially oriented and profit-driven petroleum entities.” It is expected to be presented to senators this week according to the report.

“The bill repeals the Act that created NNPC that contained legal grey areas that allowed mismanagement to go unchecked and billions of dollars in revenues to go seemingly unaccounted for as operating costs rocketed.

“Some noticeably problematic amendments are absent from this bill, such as allowing the oil minister to decide what to do with any surplus or allowing the Nigerian president to allocate oil blocks for exploration.

“But it remains to be seen whether further add-ons to the bill or later decisions will reconcile the conflict between what the new state oil companies need to run and what they should remit to the treasury,” the report added.

Credit: Leadership

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