Nigeria plans new institutional structures in oil industry

Aug 13, 2007 02:00 AM

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 minimise 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.

Source / Vanguard
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