Reps roll out plans on transfer of defunct NNPC assets to NNPC Limited

The Chief Executive Officer of Nigerian National Petroleum Corporation (NNPC) Limited is expected to meet with the House of Representatives’ Ad-hoc Committee set up to ascertain the total inventory, assets, interests and liabilities of the Corporation.

The Ad-hoc Committee Chairman, Hon Kingsley Uju Chima who presided over the meeting, also stressed the need to interface with the Minister of State for Petroleum Resources, Governor of Central bank of Nigeria (CBN) and Minister of Finance, Budget and National Planning.

According to the brief handed over to the lawmakers, Section 53(2-5) of the PIA provides that the government of the federation shall hold full ownership of the NNPC Limited with the share held by the duo of Federal Ministry of Finance Incorporated and Ministry of Petroleum Incorporated on behalf of the government of the Federation.

However, Section 53(5-8) stipulates the government’s intention to set in motion the process of immediate commercialization and privatization of the operation and future private ownership of NNPC Limited.

Section 54 of the Act further provides that: “all assets and liabilities of the NNPC will be transferred to NNPC Limited. The Minister of Petroleum and Finance are saddled with the responsibility of determining the assets, interests and liabilities of NNPC which are to be transferred within 18 months when the PIA comes to effect.

“Section 54(2) of the Act also stated that any assets, interests or liabilities not transferred shall remain that of NNPC until extinguished or transferred to government six months after the determination in section 54(1).

“The Minister of Finance and AG of the Federation shall develop a framework for payment of liabilities not transferred to the NNPC Limited. If the determination and transfer is not done within the stipulated 18 months, the assets, interests and liabilities are deemed transferred to NNPC Limited,” the document circulated to the lawmakers read in part.

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The Ad-hoc Committee also resolved to request for detailed information on NNPC assets, interests, liabilities and up-to-date audited reports from the CEO of NNPC Limited.

In the bid to achieve its set objectives, the Ad-hoc Committee also resolved request for yearly audited reports of NNPC from Nigeria Extractive Industries Transparency Initiative (NEITI) and juxtaposes the NNPC audited reports with that of NEITI.

In his address, Hon. Chima observed that despite the abundant natural endowment, the oil and gas industry has been plagued with corruption, mismanagement, crisis, environmental degradation, lack of refining capacity, among others.

“The decision of the House is in sync with the provisions of Sections 88and 89 of the 1999 constitution of the Federal Republic of Nigeria [as amended).

“It is also hinged on the provisions of Section 54 of the recently signed Petroleum Industry Act. 2021.

“The legislative intervention is in alliance with section A 1.03 of the introduction part of the Legislative Agenda of the 9th Assembly (2019 – 2023) which states that, ‘the 9th House will seek to undertake reforms of critical sectors of the Nigerian society and economy with a view to improving the conditions that allow for investment, innovation and economic growth.

“Crude oil dominates Nigeria’s economy and account for about 86% of export earnings in our country. We have the largest oil and gas reserves in Sub-Sahara Africa with an estimated 37 billion barrels of oil and 188 trillion cubic feet of gas as of July 2021.

“It is depressing that, despite the abundant natural endowment, the oil and gas industry has been plagued with corruption, mismanagement, crisis, environmental degradation, lack of refining capacity, etc.

“The petroleum Industry Act, 2021 was enacted to cure the maladies of oil and gas industry and provides legal governance, the regulatory and fiscal framework of the Industry.

“It came at a time when fossil fuel-reliant frontier markets are contending with the implications of the global transition to cleaner and renewable energy sources.

“In the last 20 years, multiple governments have attempted to pass an all-encompassing petroleum industry bill which has been successfully done by the 9th Assembly. The PIA is categorized into 5 chapters, 319 Sections and 8 schedules.

“Chapter 1 provides for the governance and Institutions of the industry, it introduces dual regulators, the Nigerian upstream petroleum regulatory commission and the Nigerian midstream and downstream petroleum authority.

“Chapter 2 details the general administration of the oil and gas industry and other related matters.

“Chapter 3 provides for the host community development Chapter 4 introduces the Petroleum Fiscal Industry Framework (PIFF).

“Chapter 5 provides for miscellaneous matters, which deal with legal proceedings relating to any suit and other related matters,” he noted.

According to him, the Committee was mandated to ascertain the total inventory, Assets, Interests and Liabilities of NNPC and its Subsidiaries before transfer to the NNPC Limited to ensure a glossary accounting system and report within eight weeks.