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Nigeria plans new institutional structures in oil industry
The Federal Government of Nigeria has decided to implement the Oil and
Gas Industry Committee (OGIC) report which proposes new institutional
structures slightly different from what currently exist. The aim is to
create operational autonomy and minimize undue interference.
The government's decision to restructure the oil and gas industry was
largely responsible for the appointment of Dr Emmanuel Ebogah, a reputed
international oil industry expert. Sources said Dr Funsho Kupolokun may
be the last substantive Group Managing Director of the Nigerian National
Petroleum Corporation (NNPC) as currently constituted.
In the OGIC report, the proposed restructuring was based on the need to
create a vibrant industry where the public sector is more efficient,
effective, and cost conscious. Operational autonomy, removal of
bureaucratic bottlenecks and minimization of undue government
interference shall ensure effectiveness and result-oriented performance.
The proposed institutional structures make room for: Minister of
Petroleum Resources; National Petroleum Directorate (NPD); Petroleum
Inspectorate Commission (PIC); National Oil Company (NOC); National
Petroleum Research Centre (NPRC); and Petroleum Product and Distribution
Authority (PPDA).
The Minister of Petroleum Resources
The Minister shall co-ordinate the activities of the NPD, PIC, NOC,
NPRC, and PPDA, whose CEOs shall report directly to him. The Minister
shall be the signatory, on behalf of government, to the performance
contract between the government and the National Oil Company.
The Minister shall have the following responsibilities: Updating the
Federal Executive Council (FEC) on developments in the sector and
advising the Council on Policy issues; Administering the National Oil &
Gas sector through strategies developed by the NPD; Representing the
nation at OPEC and other international fora; Overseeing and co-ordinating
the roles of the NPD, PIC, NOC, NPRC and the PPDA; and advising the
President and Federal Executive Council on key appointments, subject to
the independent approval of the Senate.
The National Petroleum Directorate (NPD)
The National Petroleum Directorate shall be responsible for the
initiation, formulation and development of oil and gas sector policy for
the nation emanating from the Minister of Petroleum Resources.
A Director General (DG) of the rank of Managing Director/Chief Executive
Officer who shall have the cognate industry expertise shall head the
NPD. He in turn shall be responsible to the Minister for the public
sector roles of government and shall be charged with policy formulation,
co-ordination and medium/long term plans for the oil and gas sector of
the national economy as are delegated to it by the Minister. The
conditions of Service in NPD shall be similar to those in PIC and NOC.
The President, subject to the approval of Senate, shall appoint the
Director-General of NPD. The DG shall serve for a four-year term in the
first instance, renewable for another term.
NPD shall have a clear policy mandate to maximize the economic benefit
from Nigeria's oil and gas resources, distinct from the role of the
Petroleum Inspectorate Commission, which is charged with technical
regulation and licensing. NPD's decision-making shall be primarily on
economic criteria.
NPD shall be responsible for the planning and allocation of production
quotas to production companies within the OPEC quota.
