President Muhammadu Buhari has submitted the much-awaited Petroleum Industry Bill (PIB) 2020 to the National Assembly. The President proposed the creation of the Nigerian National Petroleum Company Limited.
The bill also proposes the scrapping of the Nigerian National Petroleum Corporation and the Petroleum Products Pricing Regulatory Agency, the Punch reports.
The NNPC Limited will be incorporated by the Minister of Petroleum, who together with his finance counterparts, will determine NNPC’ s assets and liabilities that will be inherited by the new firm, The bill states.
Section 54 (1, 2 and3) 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.”
The bill also proposes the establishment of an agency known as the Nigerian Upstream Regulatory Commission which will be responsible for the technical and commercial regulation of upstream petroleum operations.
The proposed law also recommends the creation of the Nigerian Midstream and Downstream Petroleum Regulatory Authority known as ‘The Authority’.
The new bill technically scraps the PPPRA with the creation of the new agencies that will now carry out the PPPRA’s functions.
Efforts to reform the oil industry had been made by previous administrations with minimal success.
The decline in crude oil prices globally, from a high of $ 115 per barrel in mid-2014 to $ 28 pb in January 2016, combined with the regulatory uncertainty occasioned by the delay in passing the PIB to worsen the state of the sector.
In Buhari’s first term, the Eighth NASS split the bill into four parts – the Petroleum Industry Governance Bill, Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and Petroleum Host Community Bill — in a bid to fast -track its passage into law. The PIGB was passed by the Senate and the House of Representatives in May 2017 and January 2018 respectively.
After its passage by the NASS, the PIGB was transmitted to Buhari for assent in July 2018, but he eventually declined to sign the bill into law. The Presidency said the provision of the PIGB permitting the Petroleum Regulatory Commission to retain as much as 10 per cent of the revenue generated is one of the reasons Buhari declined to assent to the bill.