NNPC supports unbundling ‎of corporation in new PIB

The Nigeria National Petroleum Corporation on Wednesday supported the proposal in the new Petroleum Industrial Governance Bill to unbundle the corporation into three entities for effective performance.
NNPC made this submission at the beginning of a three-day public hearing on the bill in the Senate.
The corporation said 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”.
The corporation 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 and also facilitate the “ease of execution when eventually passed into law”.
The PIGB, which focuses mainly on administration and privatisation of the petroleum industry, splits the NNPC into three different entities, viz: The Nigeria Petroleum Regulatory Commission, National Petroleum Assets Management Company and Nigeria Petroleum Company.
While the NPRC will serve as a regulatory entity for the entire petroleum industry (upstream, midstream and downstream), the NPAMC will serve as the “counterpart and administrator of production sharing agreements and such other risk-based agreements as the government may decide to conclude”.
On the other hand, the bill designs NPC to serve “as an integrated oil and gas company operating as a fully commercial entity across the value chain”.
Speaking on behalf of the Corporation at the hearing, the Group Managing Director of the NNPC, Dr. Maikanti Baru, ‎suggested that the Federal Inland Revenue Service should retain its roles as the collector and administrator of Petroleum Profit Tax, Corporate Income Tax and other taxes.
Baru also suggested the need for the bill to clarify the mechanism for the provision of NPC’s initial funding requirements, observing that NPAMC should be registered as an asset management agency with huge administrative task.
Baru also suggested the need for NPAMC to de domiciled in the NPC during the transition period until the fist sale of equity at the Nigeria Stock Exchange.
He also advocated the need to delete a provision empowering NPAMC to sell crude oil and petroleum derivatives, adding that 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.
Speaking on behalf of Pan Niger Delta Forum,‎ former Governor of Akwa Ibom State, Obong Victor Attah, kicked against some provisions of another bill, the PIB, including the stoppage of payment of host community fund to any community where petroleum operations are obstructed by activities of vandals.
The PANDEF requested that the section should be deleted from the bill.‎
Attah also criticised the manner of provisions for host community fund in the bill, submitting that the “bill does not state that funds will be allocated to communities based on oil production and/or value of petroleum facilities or assets (such pipelines, flow stations, gas plants, terminals, etc.) located in the communities.”