The House of Representatives has begun moves to transfer assets belonging to the defunct Nigerian National Petroleum Corporation (NNPC) to the newly established Nigerian National Petroleum Company Limited, in line with the Petroleum Industry Act (PIA). The lawmakers had for this purpose set up an ad-hoc committee to ascertain the total inventory, assets, interests and liabilities of the NNPC before transferring it to NNPC Limited, to ensure a glossary accounting system.
Section 53(2-5) of the PIA stipulates that 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.
Section 53(5-8) of the PIB Act stipulates government’s intention to set in motion the process of immediate commercialisation and privatisation of the operation and future private ownership of NNPC Limited.
Similarly, Section 54 of the Act provides that “all assets and liabilities of the NNPC will be transferred to NNPC Limited.” The ministers 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 of the PIA coming into effect.
Chairman of the committee, Hon. Kingsley Uju Chima, who presided over a meeting of the panel, said there were plans to meet with Chief Executive Officer of NNPC Limited, Mele Kyari, soon. Chima said there would be an interface with Minister of State for Petroleum Resources, Chief Timipre Sylva; Governor of Central Bank of Nigeria (CBN), Godwin Emefiele; and Minister of Finance, Budget and National Planning, Zanaib Ahmed on the matter.
The committee by its mandate would also request yearly audited reports of NNPC from the Nigeria Extractive Industries Transparency Initiative (NEITI) to compare with the NNPC audited reports with that of the agency.
Addressing the meeting, Chima said the oil and gas industry was still faced with corruption, mismanagement, crisis, and environmental degradation, lack of refining capacity.
He said: “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, ‘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 per cent 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.”
He added: “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 Attorney General 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.”