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This article summarizes what the controversial Petroleum Industry Governance Bill (PIGB) is about
1. It means Petroleum Industry Governance Bill (to become PIGA when assented to by the president)
2. It is one of the 4 offshoots of PIB – the others are Petroleum Industry Fiscal Bill (to take care of taxes, royalties and other fiscal matters in the petroleum sector), Petroleum Industry Administration Bill (to address issues relating to oil licenses etc) and the Petroleum Host and Impacted Communities Bill (to address the issues of areas producing or impacted by oil producing activities)
3. PIGB sets the structure and institutional framework of the oil and gas industry. Sets out government regulatory and commercial participation in the industry.
4. It merges DPR, PPPRA, and the Petroleum Inspectorate to become one regulatory agency – the Petroleum Regulatory Commission (PRC). This will be the chief regulator and enforcer of the oil and gas industry policies and laws, doing what DPR, PPPRA and PI are doing now.
5. PRC shall be independent of Petroleum Minister and shall be run by a Board consisting of reps from Finance, Petroleum and Environment ministries as well as 8 other members nominated by president and approved by Senate.
6. At the moment, DPR is entirely answerable to the Petroleum Minister who has the right to hire or fire DPR boss. PRC will not allow that. Rep of Petroleum Ministry will only be one of the GC members – just a vote.
7. PIGB scraps NNPC and creates 2 new companies to replace it – the National Petroleum Asset Management Company (NAPAMC) and the Nigeria Petroleum Company (NPC)8. The 3rd successor to NNPC, Nigerian Petroleum Liability Management Company (NPLMC) shall be established to take over the current liabilities of NNPC and DPR. Once it settles these liabilities, it shall be liquidated.
9. NAPAMC shall run like a company (and subject to CAMA and SEC rules) with shares held by Petroleum Ministry (40%), Finance Ministry (40%) and BPE (20%), effectively still owned by government but not the typical government company. 10. NAPAMC shall take over NNPC assets in PSCs (deep offshore contracts with IOCs)
11. NPC shall run like a company (also subject to CAMA and SEC), with initial shareholding structure like that of NAPAMC, but within 10 years, it must divest 40% of its shares to the public through the NSE. In other words, by the 10th year of the passage of PIGB, the private investors will own up to 40% of NPC (one of the 2 replacements to NNPC).
12. NPC takes over the current JV assets of NNPC.
13. Current NNPC employees shall be transferred to NPC and NAPAMC
14. The fact that the 2 successor companies to NNPC will now be subject to CAMA and SEC rules will make them more transparent. The secrecy in its accounting will be over.