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NNPC accepts PIGB, unbundling to 3 bodies, dumps PIB

The Nigeria National Petroleum Corporation (NNPC) has thrown its weight behind the new Petroleum Industry Governance Bill (PIGB) that seeks to unbundle the corporation and create a window for further development in the sector.

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

It also acknowledged that the initiation 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”.

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

While the NPRC will serve as a regulatory entity for the entire petroleum industry (upstream, midstream and downstream), 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.

The bill also envisages NPC to serve as an integrated oil and gas company operating as a fully commercial entity across the value chain.

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

At the presentation during the public hearing, the Group Managing Director of NNPC, Dr. Maikanti Baru, made certain suggestions which he wanted the National Assembly to incorporate into the bill.

Such suggestions included assigning NPRC the role 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 petroleum profit tax (PPT), company income tax and other taxes.

Baru 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 tasks.