The Federal Government has said that the state-owned oil firm, the Nigerian National Petroleum Corporation (NNPC) is set to turn to a commercial entity as it will become a limited liability company within the next 6 months.
This follows the signing of the Petroleum Industry Bill (PIB) into law by President Muhammadu Buhari on Monday, August 16, 2021, after it had been passed by the 2 chambers of the National Assembly in July.
This disclosure was made by the Minister of State for Petroleum Resources, Timipre Sylva, while speaking at a press conference on Tuesday, August 17, 2021, in Abuja, according to ChannelsTV
Sylva said that a transitional committee is already been put in place to incorporate NNPC Limited adding that all shares in NNPC Limited are expected to be vested in the government at incorporation and held by the Ministry of Finance.
Mr Sylva noted that although the new petroleum act has deregulated the oil sector, subsidy policies will remain in place till further notice.
The Minister said that once the government and the organized labour are able to agree on the process of putting infrastructure in place, Nigeria will then go ahead with the deregulation.
He said an implementation framework for actual deregulation will be established to mitigate the impact on ordinary Nigerians.
What you should know
- The signing of the PIB by President Buhari is expected to bring about major structural changes to the oil and gas industry, including that of NNPC.
- The implementation of the contents of the bill will see to the incorporation of a commercial and profit-focused NNPC Limited under CAMA within 6 months from commencement of the new law with ownership vested in the Ministry of Finance Incorporated (and Ministry of Petroleum Incorporated) on behalf of the Federation to take over assets, interests and liabilities of NNPC.
- This structure is expected to pave the way for the eventual sale of shares to Nigerians. It states that any assets, interest and liabilities not transferred to NNPC Limited will remain with NNPC until extinguished or transferred to the government after which NNPC shall cease to exist. Transfer and sale of the shares are subject to approval by the government and endorsement by the National Economic Council.