The Nigerian National Petroleum Corporation (NNPC) is to be incorporated within 6 months if the Petroleum Industry Bill (PIB) is to be signed into law by President Muhammadu Buhari, following passage of the bill by the Senate yesterday.
Part five of a draft copy of the bill seen by MoneyCentral says: “the Minister of Petroleum shall within 6 months from the commencement of this Act, cause to be incorporated under the Companies and Allied Matters Act, a limited Company Limited liability company, which shall be called Nigerian National Petroleum Company Limited (NNPC Limited).”
The Petroleum Minister is expected at the incorporation of NNPC Limited, to consult with the Minister of Finance to determine the number and nominal value of the shares to be allotted, which shall form the initial paid-up share capital of NNPC Limited and the Government shall subscribe and pay cash for the shares.
According to the bill, Ownership of all shares in NNPC Limited shall be vested in the Government at incorporation and held by the Ministry of Finance Incorporated and the Ministry of Petroleum Incorporated in equal portions on behalf of the Federation.
Shares held by the Government in NNPC Limited are also not transferable including by way of sale, assignment, mortgage, or pledge unless approved by the Government and endorsed National Economic Council on behalf of the Federation.
“NNPC Limited and any of its subsidiaries shall conduct their affairs on a commercial basis in a profitable and efficient manner without recourse to government funds and their memorandum and articles of association shall state these restrictions; NNPC Limited shall operate as a CAMA entity, declare dividends to its shareholders and retain 20% of profits as retained earnings to grow its business,” the PIB reads in part.
“The Minister and the Minister of Finance shall within 18 months of the effective date determine the assets, interests and liabilities of NNPC to be transferred to NNPC Limited or its subsidiaries and upon the identification, the Minister shall cause such assets, interests and liabilities to be transferred to NNPC Limited.”
NNPC Limited and other parties to joint operating agreements in respect of upstream, may also on a voluntary basis restructure their joint operating agreement as a joint venture carried out by way of a limited liability company, each referred to as an “incorporated joint venture company” (IJV).
The incorporated joint venture companies shall not be subject to the provisions of the Fiscal Responsibility Act and the Public Procurement Act, according to the PIB.
The House of Representatives had earlier passed bill.