After years of delay, the Senate on Thursday, 25th day of May, 2017 passed the Petroleum Industry Governance Bill. Nevertheless, the Bill still has to go through the House of Representatives and the President to be law.

If it succeeds as presently drafted, then Nigeria will have five new commercial and governance organizations to replace existing ones, such as the Nigerian National Petroleum Corporation and the Department of Petroleum Resources.

A copy of the Petroleum Industry Governance Bill 2017 may be found here. The Bill is in a report format and shows the changes made to the Bill after the Joint Committee’s review.

It will be recalled that this Bill has gone through 5 sessions of the National Assembly, beginning from the 4th Assembly which was inaugurated in 1999 under President Olusegun Obasanjo.

With the passage of the Bill, a new regulatory agency, known as Nigeria Petroleum Regulatory Commission, NPRC, would take over the functions of Petroleum Inspectorate, PI, the Department of Petroleum Resources , DPR, and the Petroleum Products Pricing Regulatory Agency, PPPRA. The new Nigeria Petroleum Regulatory Commission, among other things, will also administer and enforce policies, laws and regulations relating to all aspects of petroleum operations which are assigned to it under the provisions of the Act.

Additionally, when the Bill is signed into law, two new companies, Nigeria Petroleum Assets Management Company and National Petroleum Company, would be established with certain assets and liabilities of Nigerian National Petroleum Corporation, NNPC, while the National Petroleum Company, for instance, would operate as a full independent commercial entity.

According to the Bill, the two companies shall be created and supervised by the Ministry of Petroleum Incorporated.

It provides that “the Minister shall, within six months after the Effective Date, take such steps as are necessary under the Companies and Allied Matters Act to incorporate two entities – the first may be called the Nigeria Petroleum Assets Management Company, or such other name as may be available and the other may be called the National Petroleum Company, or such other name as may be available, as companies limited by shares, which shall be vested with certain assets and liabilities of the Nigerian National Petroleum Corporation (“NNPC”).

“Upon incorporation and the transfer of assets pursuant to this Act: the Nigeria Petroleum Assets Management Company (hereinafter called the “Management Company” in this Act) shall be responsible for the management of assets currently held by the Nigeria National Petroleum Corporation (NNPC) under the Production Sharing Contracts and Back-in Right Provisions under the Petroleum Act 1969 as amended;

“The National Petroleum Company shall be responsible for the management of all other assets held by NNPC except the Production Sharing Contract and Back-in Right assets currently held by the NNPC;

“At the time of its incorporation, the initial shares of the National Petroleum Assets Management Company shall be held in the ratio of 20% by the Bureau for Public Enterprises, 40% by the Ministry of Finance Incorporated and 40% by the Ministry of Petroleum Incorporated on behalf of the Government.

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