Group managing director of the Nigerian National Petroleum Corporation (NNPC) Maikanti Baru has sought for clarification on the funding structure for the proposed Nigerian Petroleum Asset Management Company (NPAMC) in the Petroleum Industry Governance Bill (PIGB).
Baru who spoke at the 2018 conference of the National Association of Energy Correspondents (NAEC) in Lagos said though the Bill is focused on the key governing institutions in Nigeria’s oil and gas industry and aims to separate the regulatory, policy and commercial roles of public sector agencies and allocate respective roles to agency properly positioned to perform them, it is important to adequately clarify funding pattern for the proposed NPAMC and the Liability Management Company (NPLMC).
The GMD who was represented by Roland Ewubare, group general manager, Nigerian Petroleum Investment Management Services (NAPIMS), suggested that the NPAMC should be structured in the form of an agency rather than a company in consideration of its limited role in the administration of Production Sharing Contract (PSC) assets, as similar institutions across the world are structured as agencies like Petoro in Norway.
He noted that the National oil company has historically experienced frequent board and management leadership changes which has impacted on the Corporations performance.
He said though the Bill defined tenure for non-executive directors, there are currently no provisions that help to ensure stable tenure for the executive directors and insulate them from changing dynamics of the political context as far as possible.
“The issuance of well-defined contract terms to the executive directors may address this issue. The newly established commercial entities are expected to be governed in line with the provisions of the Code of Corporate Governance issued by the Securities and Exchange Commission.
However, the Bill does not include recommendations to address possible conflicts that may arise between its provisions and those of the Securities and Exchange Commission (SEC) Code”, he observed.
To prevent this possible ambiguity, Baru said there is need to emphasize the superiority of the provisions of the Bill over those of the SEC Code, where such conflicts arise.
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