FG Scraps NNPC - Sets Up 5 Subsidiary Companies & A National Council On Energy

The Federal Government approved the unbundling of the Nigeria National Petroleum Corporation (NNPC) into five new organisations within the next six months. The decision is aimed at making the country’s energy sector more efficient and is in line with the new National Oil and Gas Policy.

The five agencies created to handle activities in the sector are the National Petroleum Directorate, the National Oil Company, the Petroleum Inspectorate Commission, the Petroleum Products Distribution Agency, and the National Oil and Gas Assets Holding and Management Company.The NPD replaces the Ministry of Energy, while the NOC takes over the core roles of the NNPC. The Department of Petroleum Resources (DPR), which had the responsibility of policing the oil sector as a department in the Ministry of Petroleum, has been replaced with an autonomous body to be called Petroleum Inspectorate Commission (PIC). The Pipeline Products Marketing Company (PPMC) will be replaced with a new body to be called Product Distribution Authority (PDA) while the National Oil and Gas Assets Holding Company (NOGAHC) will replace NAPIMS to handle the management of assets of the former NNPC.

The government also constituted the National Energy Council to be headed by the President and Vice-President Goodluck Jonathan as the deputy chairman to overhaul and reorganise the NNPC and the entire energy sector with the aim of making it work again.Other members of the council are the Minister of State for Energy (Petroleum), Mr. Odein Ajumogobia, his counterparts in charge of Gas, Mr Olusina Emmanuel; and Power, Mrs. Fatima Ibrahim. Also included in the Council are the Attorney-General and Minister of Justice, Mr. Michael Aondoakaa; the Minister of Finance, Dr. Shamsudeen Usman; the Minister of National Planning, Senator Sanusi Daggash; the Honorary Strategic Adviser to the President on Energy, Dr. Rilwanu Lukman; and the National Security Adviser, Gen. Ibrahim Mukhtar. Four other members are to be appointed by the President.

The minister said said, “The Council today (Wednesday) put an end to the speculation as regards the new oil and gas policy. “The Council received memorandum on the proposed National Oil and Gas policy, the recommendation arising from the sector reform implementation committee, which was inaugurated in 2000 under the chairmanship of Lukman. “That committee was charged with the responsibility of restructuring Nigeria ’s oil and gas sector. “The National Council on Privatisation received the report of the committee in 2005. It has been five years of work within which experts in the industry have come together to put together this report that was presented to the council.

“Almost simultaneously, the NCP had also set up a committee to look at the oil and gas industry. “Those two reports came up at about the same time and a committee was set up under the then Minister of Petroleum Resources to harmonise the reports because there were significant overlap. “Those two reports were presented to the council today (Wednesday) with a working document, including the one that came from the NCP.“The only thing that was added to that report was the creation of the National Energy Council.

“The Council also approved the implementation of the National Oil and Gas Policy within a period not exceeding six months. “One of the highlights of the new policy is the unbundling of the NNPC. This means creating five new organisations out of the existing structure. “A new Petroleum Directorate is to be set up.

A National Oil Company, that is NNPC itself as it is now known, is to be reorganised to empower it to conduct itself like any other oil and gas company. “It will be isolated from some of its other functions. For example, the Department of Petroleum Resources currently is a department in the Ministry of Energy and this will be replaced by a commission known as Petroleum Inspectorate Commission that would be independent and empowered to monitor the industry effectively.

“There is Petroleum Product Distribution Authority, which is another new organisation. There is also the NOGAHMSC which will effectively replace NAPIMS to manage the assets that are currently being managed under the umbrella of the NNPC. “The Council approved the constitution of the energy council which will work within the six months time frame to implement the policy”

It is expected that the constitution of the energy council will herald the declaration of emergency in the country’s energy sector.“The President had revealed in his address at the opening session of the recently-concluded presidential retreat that emergency will be declared after the establishment of the Council, which he said would work out ways to realise self-sufficiency in the energy sector.”