NNRC: Revised PIB Should Allow NNPC Raise Capital Via IPO
By Chineme Okafor
The Nigeria National Resource Charter (NNRC) has advised the National Assembly to ensure that the Petroleum Industry Bill (PIB) currently before it for legislation will allow the Nigerian National Petroleum Corporation (NNPC) raise funds for its operations from the capital market through Initial Public Offers (IPOs) when passed into law.
NNRC, a not-for-profit organisation which is at the forefront of advocacy for efficient use of Nigeria’s natural resources wealth for public good, commended the recent efforts of the National Assembly towards ensuring the passage into law of the PIB in 2021 after years of protracted delay, but asked that it makes the final law worth the wait.
It explained in a recent statement sent to THISDAY by its Programme Coordinator, Tengi George-Ikoli that it made a number of key recommendations on the bill’s legislative process to the National Assembly in which the need for the NNPC to chart a commercially viable path in the current energy market dynamics was underlined.
It said it wanted, “clarity on the capitalisation of NNPC to enable it to adapt a commercially focused framework that allows it to operate in a competitive space and explore the possibility of an initial public offering (IPO) with more private sector and possible citizen participation as practiced in other countries.”
This it added will allow the corporation to operate with greater transparency and accountability to Nigerians.
The NNRC also called for the PIB to allow for meaningful participation of host communities in decision-making processes of managing trusts set up to compensate and engender a conducive operating environment for operating oil companies.
Additionally, it advocated for the liberalisation of Nigeria’s midstream oil sector and incentivisation of gas investments through non legislation on base gas price.
Instead, it asked the assembly to allow gas prices to be determined by the practical framework that considers cost of production and pipeline transportation.
NNRC which has produced comprehensive reports on the state of governance, strengths, and weaknesses in Nigeria’s management of its petroleum resources – the Benchmarking Exercise Report (BER), noted its belief in the commitments and promises of the National Assembly to pass the PIB soon.
“There is need to ride [on] the momentum and get all stakeholders on board to achieve what undoubtedly would be the most profound piece of legislation for the transformation of the Nigerian economy.
“Having consistently highlighted the weaknesses in two significant aspects of resource management in Nigeria, namely, the contentious issues surrounding the management of host communities impacted by extraction, and the management of the Nigerian National Oil Corporation (NNPC), the NNRC urges the federal government to finally resolve the pervasive issues facing the petroleum sector,” it added.
According to it, the government has to do this to ensure that Nigeria is able to meet up with increasing demands for best practices and efficiency in the global oil market, as well as prepare for the country for a future energy market that accommodates and encourages the adoption of renewable energy sources in support of fossil fuel.