*Nigerians to buy shares in new state-oil firm
*As Downstream, Midstream, Upstream sectors to get own agencies
Lagos — The fate of government-owned parastatals such as the Nigerian National Petroleum Corporation, NNPC, and the Petroleum Products Pricing Regulatory Agency, PPPRA, are hanging in a balance as the revised Petroleum Industry Bill, PIB, 2020 recently sent to the National Assembly by President Muhammadu Buhari says Nigeria would no longer be in need of both.
This is because the PIB 2020, now awaiting the approval of the Assembly, proposes that both the NNPC and the PPPRA be scrapped. The NNPC will be replaced by the Nigerian National Petroleum Company Limited, NNPC Limited.
Section 54(1, 2 and3 )) of the bill 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 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.”
President Buhari doubles as the Petroleum Minister.
With the creation of NNPC Limited which would eventually be listed on the Nigerian Stock Exchange, NSE, Nigerians will now have the opportunity of buying shares, attend shareholders meetings, and make input in the management of its affairs just like is being done in other businesses on the stock exchange.
According to the Bill, while the upstream sector will get its own agency known as the Nigerian Upstream Regulatory Commission- to be responsible for the technical and commercial regulation of upstream petroleum operations, the midstream and downstream sector will also get the Midstream and Downstream Petroleum Regulatory Authority, MDPRA known as ‘The Authority’.
However, what is not clear with creation of ‘The Authority’, is whether or not oil marketers would still be allowed to indiscriminately fix prices of petroleum products as is currently being done in line with deregulation.
“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,” Section 4 of the bill states in part.
Section 29 of the bill states in part, “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.”
The old PIB dates back to over two decades ago with futile efforts by former presidents, Obasanjo, Yar’adua, and Jonathan at passing it into law.