The Special Seminar Series organized by the Centre for Petroleum, Energy Economics and Law (CPEEL), at the University of Ibadan on the Petroleum Industry Governance Bill (PIGB) currently before the lower arm of the National Assembly has ended with useful recommendations.
Director of CPEEL, Professor Adeola Adenikinju said this seminar was yet another attempt in the seminar series by CPEEL “to provide recommendations that will further deepen the discourse on the bill, so that eventually what we will have is a law that meets the aspirations of Nigerians.”
Guest speaker at the recent seminar, was a professor of law, Professor Emeka Duruigbo of the Thursgood Marshall Law School, University of Houston, USA, who spoke on the topic, “Allocation and Acquisition of Shares Under the Petroleum Industry Governance Bill: Social, Economic and Legal Implications.”
Part of the provisions within the PIGB is to commercialize NNPC by breaking it into two, one of which is named the National Petroleum Company (NPC) that shall focus on Joint Ventures and be an integrated oil and gas company operating as a fully commercial entity across the energy value chain.
The PIGB further provides that “the Government shall within five years from the date of incorporation of the National Petroleum Company, divest, in a transparent manner not less than 10 per cent of the shares of the National Petroleum Company and within 10 years from the date of incorporation divest not less than an additional 30 per cent of the shares of the National Petroleum Company to the public in a transparent manner.”
Professor Duruigbo, however, recommended that the government should hold a lesser stake in the NPC than what is being proposed. In this manner, the NPC can be run in a more efficient manner similar to what obtains with NLNG.
He recommended that, “Government should relinquish control and hold a minority of the shares in the NPC. This will increase faith that the government is committed for the long haul in privatization of the company. More important, it’ll increase prospects of proper management, as we’ve seen in NLNG where NNPC holds a minority 49 per cent stake.
“Government should retain 40 per cent of the shares in the NPC and transfer the other 20 per cent to a Trust that will hold the shares on behalf of oil-producing communities.
“Ownership by host communities will bring a sense of belonging, minimize or eliminate agitations and increase managerial accountability in the NPC. It may even dispense with the need for a Host Community Bill.”
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