Agenda for NNPC Limited

The directive last week by President Muhammadu Buhari for the incorporation of the Nigerian National Petroleum Company Limited is not only timely but also a commendable move to give effect for the immediate operation of the Petroleum Industry Act, PIA, which was passed in July this year by the National Assembly and signed shortly after by Mr President after some grey areas had been resolved.

A statement issued by Special Adviser to the President (Media and Publicity), Femi Adesina, said the president gave the order in his capacity as Minister of Petroleum. “This is in consonance with Section 53(1) of the Petroleum Industry Act 2021, which requires the Minister of Petroleum Resources to cause for the incorporation of the NNPC Limited within six months of commencement of the Act in consultation with the Minister of Finance on the nominal shares of the Company”.

The statement said the Group Managing Director of the NNPC, Mr Mele Kolo Kyari, had been directed to take necessary steps to ensure that the incorporation of the NNPC Limited is consistent with the provisions of the PIA 2021. President Buhari also approved the appointment of the Board and Management of the NNPC Limited, with effect from the date of incorporation of the company.

The president named Senator Ifeanyi Ararume as chairman of the board while Mele Kolo Kyari and Umar I. Ajiya were appointed as chief executive officer, and chief financial officer, respectively. Other board members are; Dr Tajudeen Umar (North-east), Mrs Lami O. Ahmed (North-central), Mallam Mohammed Lawal (North-west), Senator Margaret Chuba Okadigbo (South-east), Barrister Constance Harry Marshal (South-south), and Chief Pius Akinyelure (South-west).

The president had, shortly after constituting the board of the Nigeria National Petroleum Company Limited, requested the Senate to amend the Petroleum Industry Act 2021. Buhari’s request was contained in a letter dated September 16, 2021, and read during plenary by the Senate President.

President Buhari in the letter explained that the appointment of two non-executive members as provided for by the Act to the board of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NPRA) and Upstream Regulatory Commission (URC) does not reflect balanced geopolitical representation.

He, therefore, requested amendment to Sections 11(2)(b) and 34(2)(b) which provides for the Administrative Structure of the PIA 2021, to increase the number of the non-executive members from two to six on the boards of the NPRA and URC.

According to him, doing so would foster national unity and “provide a sense of participation and inclusion to almost every section of the country in the decision making of strategic institutions such as the oil industry”.

In addition, the president proposed a deletion of Sections 11(2)(f), 11(2)(g), 34(2)(f) and 34(2)(g) from the Petroleum Industry Act, which would see to the removal of the Ministries of Petroleum and Finance form the Board of the Nigerian Petroleum Regulatory Authority and Upstream Regulatory Commission.

He explained that, “the proposed amendment will increase the membership of the board from nine (9) to thirteen (13) members that is representing 44 percent expansion of the board size. “This composition would strengthen the institutions and guarantee national spread and also achieve the expected policy contributions.

“The two ministries already have constitutional responsibilities of either supervision or inter-governmental relations. They can continue to perform such roles without being in the board. It is also important to note that, administratively, the representatives of the ministries in the board will be directors – being same rank with directors in the institution. This may bring some complications in some decision making especially on issues of staff related matters.”

He also sought an amendment to Sections 11(3) and 34(3) to be replaced with a new section that provides that appointments to the Board of the Commission or Authority under section 2 shall be made by the President, while those made pursuant to subsection (2)(a), (b) and (c) of section shall be subject to confirmation by the Senate.

The president in the amendment proposal underscores the need to exempt serving public officers from the established confirmation process for political appointments.

This, he noted, will ensure effective management of the regulatory institutions through uniform implementation of public service rules for employees of the authority.

The NNPC had, hitherto, carved a notoriety as the most corrupt government agency in Nigeria with so much disregard and impunity for financial propriety and fiscal discipline. Consequently, its corporate headquarters in Abuja, NNPC Towers, was derisively nicknamed the ‘Towers of Corruption’.

But, evidently, with the signing of the PIB, which had been lying at the senate for decades, into law by President Buhari, the gory picture of Nigeria’s main petroleum industry regulatory agency will now be confined to the dustbin of history. The agency is set to have a new lease of life with high expectations from Nigerians, For instance, Nigerians would like to see greater efficiency and transparency, higher productivity and profitability of the NNPC Limited that will result in the local refining of petroleum products.

We wish the management and board of the new company success in the task to reposition Nigeria’s petroleum sector in line with global best practices.

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