Highlights Of Aspects Of The Petroleum Industry Bill A Presentation To The Nigerian Association Of Energy Economics Conference 2009
1. Highlights of Aspects the Petroleum
Industry Bill
Dr. Adeoye Adefulu
Odujinrin & Adefulu
Barristers, Solicitors & Notaries Public
Barristers Solicitors & Notaries Public
Lagos – Abuja – Port‐Harcourt
3. Background
– Thrust of the reform is to:
• Clearly separate the government functions in the oil
industry – policy, regulatory and commercial
• Create a stronger National Oil Company modeled after
Statoil, Petronas etc with more independence to invest
St t il P t t ith i d d t i t
in local production as well as foreign markets
Odujinrin & Adefuluestd. 1972
4. NNPC Ltd.
NNPC Ltd.
• NNPC to be corporatised
– All assets and liabilities of NNPC to be transferred
(s.137)
• Except PSC assets
Except PSC assets
– How will it be funded?
• Certain moneys to be retained by the government
Certain moneys to be retained by the government
under law‐ would it apply?
Odujinrin & Adefuluestd. 1972
5. IJV
• Should they be created by negotiation or
g
legislation?
• No provisions as to transfer of assets &
liabilities
– Stamp duties issues
– How will the assets be held?
– Will transfer of OMLs require ministerial consent?
q
– Will JV companies be able to book assets
Odujinrin & Adefuluestd. 1972
6. Licensing
• Sections 4 & 257 empowers minister to grant
licenses
– PPL & PML
• May only be granted to indigenous oil
May only be granted to indigenous oil
companies
– Not less than 60% shareholding by Nigerians
– Must be ratified by the Inspectorate or Directorate
y p
Odujinrin & Adefuluestd. 1972
7. Licensing (contd.)
Licensing (contd.)
• Minister grants licenses on the
recommendation of NPD
• NPD to conduct licensing rounds
–NNo more discretionary awards
di ti d
– No explicit link between power of the Minister to
award licences and NPD bid rounds
Odujinrin & Adefuluestd. 1972
8. Environmental Matters
Environmental Matters
• Requirement to conduct environmental
p g
programmes or environmental quality
q y
management programmes
– No distinction between the two
No distinction between the two
• This appears to be in addition to the EIA
requirements
• EP/EQMP regime under Inspectorate while EIA
EP/EQMP regime under Inspectorate while EIA
regime under Ministry of
Environment/NESREA
Odujinrin & Adefuluestd. 1972
9. Institutional Framework
Institutional Framework
• Creation of NPD, NPI, NAPAMA amongst
others
• Regulatory functions not fully separated
–SSeveral references to functions to be carried out
l f t f ti t b i d t
by NPD or NPI
– Should a policy body hold acreage?
• PSC
• Is there a need for NAPAMA
Odujinrin & Adefuluestd. 1972