NNPC’s GMD backs unbundling of NNPC by new PIG Bill

Group Managing Director of NNPC, Dr. Maikanti Baru, has thrown his weight behind the newly introduced Petroleum Industry Governance Bill (PIGB) by the National Assembly, which splits the corporation into three different entities.

The NNPC boss who made the submissions at the 3-day public hearing on the bill at the National Aseembly complex, Abuja yesterday, gave the Senate some suggestions, which he wanted the National Assembly to incorporate into the bill.

The suggestions include: assigning NPRC the roles of administering royalties, rentals, fees and other petroleum revenues. He also said the Federal Inland Revenue Service (FIRS) should retain its roles as the collector and administrator of the petroleum profit tax (PPT), corporate income tax and other taxes.

He also suggested the need for the bill to clarify the mechanism for provision of NPC’s initial funding requirements, observing that NPAMC should be registered as an asset management agency with huge administrative task.

He advocated the need to delete a provision which empowers NPAMC to sell crude oil and petroleum derivatives, saying assigning NPAMC the role of selling crude oil, which he said should be the responsibility of a department in NPC, would create two competing national oil companies that would both be involved in the sale of crude oil.

Mr. Baru said that the new bill would serve “as necessary prelude to the enactment of subsequent legislations on upstream, midstream and downstream fiscal, commercial and operational framework for the oil and gas industry.”

He also stated that the idea of PIGB, as a separate bill from the fiscal and commercial framework, would hasten the overall consideration of Petroleum Industry Bill (PIB) and also facilitate the “ease of execution when eventually passed into law.”

The support of the NNPC to its unbundling was, however, in contrast to the perception that the initiative might not be acceptable to both the corporation and the Presidency.

National Daily gathered that the PIGB focuses mainly on administration and privatisation of the petroleum industry, and splits the NNPC into three different entities, namely: the Nigeria Petroleum Regulatory Commission (NPRC), National Petroleum Assets Management Company (NPAMC) and Nigeria Petroleum Company (NPC).

The NPRC will serve as a regulatory entity for the entire petroleum industry (upstream, midstream and downstream), while the NPAMC will serve as the “counter-part and administrator of production sharing agreements and such other risk-based agreements as the government may decide to conclude.”

According to the present initiative, NPC’s activities will include joint venture operations, operations of the Nigeria Petroleum Development Company (NPDC), frontier exploration and other upstream/service activities, refinery and petrochemicals, downstream activities and sale and disposal of crude oil and products.