NIGERIA – The Nigerian National Petroleum Corporation (NNPC), the Nigerian agency mandated to regulate Nigeria’s oil and gas sector, will be commercialized if the new Petroleum Industry Bill (PIB), is passed by Nigerian Parliament.

According to a statement by Minister of State for Petroleum Resources, Timipre Sylva, the Petroleum Industry Bill which was just submitted by President Muhammadu Buhari to the National Assembly seeks to commercialize the Nigerian National Petroleum Corporation (NNPC) rather than scrap it.

Under the bill, a new entity by the name, Nigerian National Petroleum Company Limited will be created to take over the over the assets and liabilities of NNPC.

The Federal Government is expected to pay cash for shares of the company, which would operate as a commercial entity without access to state funds.

The PIB also proposes that new regulatory bodies be created to take over some of the regulatory functions currently being undertaken by the NNPC.

A section of the bill proposes an amendment to controversial changes to deep offshore royalties made late last year.

This involves reducing the royalty that oil companies pay the Federal Government for offshore fields producing less than 15,000 barrels per day from 10% to 7.5%.

The bill also proposed a change to be made on the price-based royalty too so that it kicked in when oil prices climbed above $50 per barrel, rather than the initial $35.

The Petroleum Industry Bill would also codify in law that companies cannot deduct gas flaring penalties from taxes, a practice that was the subject of a court case.

The Nigerian Minister for Petroleum while speaking to journalists at the National Assembly complex also revealed that the government would also be introducing is the development of the midstream, that is the pipeline sector so as to promote robust growth in the entore oil sector.

Mr. Timpre Silva in his parting shot said that, “Through commercialization (of NNPC), the required competitiveness in the sector will be achieved.”

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