By Udeme Akpan, Energy Editor
Members of the Board of NNPC Limited have been threatened by redundancy as President Bola Tinubu authorised the amendment of the nation’s Petroleum Industry Act, PIA.
The PIA, Nigeria’s comprehensive petroleum legislation, grants enormous power to the board members as the highest decision making organ of the organisation.
The current board members of the company include, Adedapo Segun (North West), Bello Rabiu (North West), Yusuf Usman (North East), Babs Omotowa (North Central), former Managing Director of Nigeria Liquefied Natural Gas, Austin Avuru (South-South), Non-Executive Director, David Ige (South-West) and Henry Obih (South-East).
According to Africa Oil+Gas report, Nigeria’s Attorney General has already notified some federal agencies, of President Ahmed Tinubu’s approval of the proposed amendment to the PIA.
The report said the planned amendment was originated by the Minister of Finance, with the aim of closing the “escalating fiscal leakage and revenue loss confronting the Federation.”
However, reacting in an interview with Vanguard, yesterday, a Petroleum Economist, Wumi Iledare, said: “Every Act eventually undergoes amendments, and the PIA cannot be an exception. However, it should have been allowed to run its course while the Tinubu Administration focused on tackling the real root of the matter: corruption.
“What is most worrisome in these proposed amendments is the idea of the Ministry of Finance strategizing for NNPCL. If this happens, I fear board members may consider resigning, since their role would be rendered redundant. In my experience with IOCs, the board is always the highest strategic and planning organ.
“Before making these changes, one would expect lessons to be drawn from institutions like Petronas, Petrobras, Aramco, ADNOC, and Statoil. Surely, those who crafted the PIA must have done extensive studies before rolling it out. In the end, we must let the truth speak for itself.”
The report, stated: “The most consequential part of the proposed amendment is the overhaul of Section 8, which currently outlines the commercial regulatory functions of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). In addition to its existing roles of reviewing and approving the commercial aspects of field development plans in upstream petroleum operations and developing cost studies and benchmarks for evaluating upstream petroleum operations, the amendment proposes that:
“The NUPRC will act as the government representative in all model contracts attached to licenses and leases contemplated in Section 85. The NUPRC will replace the Nigerian National Petroleum Company Limited (NNPCL) as the concessionaire in all subsisting Production Sharing Contracts, Profit Sharing Contracts, and Risk Service Contracts.
“In this role, the NUPRC will be responsible for evaluating and approving all relevant work programs and verifying and approving all contractor costs to determine cost-recoverable expenditure under these contracts.”
It also stated: “The amendment also seeks to oust the Ministry of Petroleum Incorporated (MOPI) as a co-equal shareholder of NNPCL with the Ministry of Finance Incorporated (MOFI). To achieve this, Section 53 of the PIA will be amended to read: “Ownership of all shares in NNPC Limited shall be vested in the Federation at Incorporation and held by the Ministry of Finance Incorporated as the sole bare agent of the Federation.
“The amendment calls for a reversal of a settlement from the early days of the Tinubu administration, regarding the delineation of duties between the NUPRC and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on integrated joint operations. The current law states that “where in such facilities or fixed or floating platforms or vessels provide for fully integrated upstream and midstream petroleum operations, the Commission shall consider and the Commission shall be in charge of such integrated operations and petroleum operations may be considered integrated where there is a joint use of utilities used exclusively for the upstream and midstream operations.
“The amendment proposes a deletion of this provision and instead proposes the constituting of a joint project team of NUPRC and NMDPRA to be responsible for the technical regulation of integrated operations.
“The amendment introduces significant changes to the governance structure of the NNPCL, raising serious concerns about its operational autonomy and strategic direction. By transferring the responsibility of setting the strategic direction and objectives of the NNPCL board and corporation to the Ministry of Finance Incorporated (MOFI) as a single agent, the amendment risks undermining the principles of modern corporate governance. This shift positions MOFI as a “bare agent” of the Federation, effectively weakening the NNPCL Board’s autonomy in steering the corporation. Such a move could open the door to excessive political influence over corporate priorities, eroding the separation of ownership from management that is critical for effective governance.”
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