Nigeria’s oil sales should remain the sole responsibility of one company rather than be split between two agencies as a draft of the country’s long-awaited petroleum bill proposes, the head of state oil company NNPC said on Wednesday.
Maikanti Baru, the Nigerian National Petroleum Corporation’s (NNPC) group managing director, told a parliamentary hearing that the draft Petroleum Industry Bill (PIB), which aims to radically overhaul the OPEC member’s oil sector, should be amended so that only one company, the newly created National Petroleum Company (NPC), is allowed to sell the nation’s oil.
The draft had sought to create competition and efficiency in the sector by having two agencies selling oil which the NNPC opposes on the grounds it would muddle responsibilities.
Crude sales account for 70 percent of government revenue, making it the mainstay of Africa’s largest economy. The NNPC has been criticised for managing commercial, policy making and regulatory activities, which analysts say has exacerbated corruption and mismanagement.
Baru said the second agency proposed under the bill, the Nigeria Petroleum Assets Management Company (NPAMC) should serve as an administrative arm overseeing crude production and joint venture agreements with oil companies.
Baru acknowledged that by providing the NPAMC with a mandate to sell crude oil, the bill will create two competing national oil companies. But he stressed it would be “best practice” for the NPC to sell oil on behalf of all agencies and the new bill to clearly define responsibilities.
The overhaul bill, which has been stuck in parliament for more than a decade, aims to stamp out corruption and inefficiency at state oil giant NNPC and turn it into a commercial agency. Part of the current bill includes plans to sell stakes of at least 40 percent of the newly created NPC and eventually list it on the stock exchange.
Baru did not object to plans in the bill to hand the regulation of Nigeria’s oil sector over to a third agency, named the Nigeria Petroleum Regulatory Commission (NRPC).
Last month the Senate gave initial approval in the second reading to the draft bill, a procedural move that allowed it to move forward.
The next step is for parliamentary committees to provide a report, after which the Senate will go through the final version of the bill clause by clause.
Senate President Bukola Saraki said they aimed to have the bill “signed, sealed and delivered for the benefit of the Nigerian public early in 2017.”
Baru said the split responsibilities between the NPC, NPAMC and the NPRC would ensure transparency, but that the NPC should also “publish annually a detailed report on all petroleum revenue payments made to government.”