In the ongoing debate over proposed amendments to Nigeria’s Petroleum Industry Act (PIA),industry analysts have called for separating the Nigerian Upstream Investment Management Services (NUIMS) from the Nigerian National Petroleum Company (NNPC) as a crucial step toward enhancing transparency and efficiency in the sector.
This suggestion arises amid government considerations to amend parts of the 2021 Petroleum Industry Act, which aimed to delineate and clarify roles within Nigeria’s petroleum sector but left some grey areas unresolved.
The CEO of AHA Consultancies, Ademola Henry Adigun, emphasised that NUIMS should not remain a division within NNPC but rather operate independently, ideally as a department under the Ministry of Finance. He argued that this structural shift would foster better transparency and reduce the inefficiencies and corruption perceived to be embedded in the current setup. According to Adigun, “NUIMS should have been a department under the Ministry of Finance. With NUIMS under the Ministry of Finance, you would have better managed it, and then all of those assets would have better transparency.” He warned against blurring the lines between regulator and operator roles, stating, “You can’t make a regulator an operator,” underscoring the risks in the proposal to merge roles further.
Speaking with the LEADERSHIP, Adigun questioned the motive of the proposed amendment, stating that when you want to make a PIA amendment that took Nigeria many years to pass, and that’s not implemented correctly, what is driving the changes?
“Are you making changes because you think that what we have is not working? What is really changing if we take the ownership structure or the constitutional amendment from NNPC and put it in any policy? Is ownership the issue, or is amendment the issue? Or are there transparency issues or a lack of understanding? I’m asking what its effect is.
The question is, why can’t you do it first of all? Then we can also start thinking about the outcomes of the date. As far as I’ve seen, I do not see any reason for it. You can’t make a regulator an operator. What should have been done, ab initio, was to have taken the NNPC Upstream Investment Management Service (NUIMS) away and kept it separate from NNPC. NUIMS should have been a department under the Ministry of Finance. With NUIMS under the Ministry of Finance, you would have had better management of it, and then all of those assets would have had better transparency. But what you’re trying to do is just the same thing. And the regulator shouldn’t be an operator.
“Let me tell you what I think the government will do. The government is planning a divestment. So they’re invested in divesting Nigerian equity ownership in these assets. So what you’re looking at is a use of divestment. That’s the move now. On affecting our investment as a potential, nobody cares who owns the asset. What drives investments in the country are the fiscals policies, investment climate, and the government structure?
“How should the government go about this to make the industry better ? Keep the regulator as a regulator. Keep the operator as an operator. If you want to change the ownership structure or diversify assets, separate NUIMS from NNPC, not NUIMS based on the land. And NUIMS doesn’t even have a staff to run it. It doesn’t need to be a full department under the NNPCL where there’s a lot of corruption issues, and padding in it. It’s a very costly area. And a lot of people are making a lot of money and a lot of inefficiencies.” he added.
Also speaking, Captain Emmanuel Iheanacho, executive chairman of Integrated Oil and Gas Ltd and Genesis Shipping Worldwide, said he saw nothing wrong with strengthening the law where such adjustments are required to promote efficiency and transparency.
Iheanacho, a former minister of the Interior and Distinguished Maritime Personality (DMP), said caution must be applied to ensure that the law, whose implementation has just started, is not amended without proper consideration of critical issues.
He argued that nothing is wrong with considering an amendment at this point if the need arises.
Also, the managing director of DEEPSHORES Energy Limited, Mrs Nneka Zainabu Obi, said, “Bringing in more bureaucratic regulations and making decision-making more difficult make it look more politicised. This will in turn drive away prospective investors, because no one wants instability in any country, especially one like ours that has a lot of negative publicity already.”
She added that the PIA had put Nigeria in the limelight, and investors were already seeing the country as a place for fruitful investment.
“What is the main reason for the amendment? Yes to decentralise power, but at the same time, it will make business slower in the fast-moving industry like ours.
“And when it comes to us indigenous companies it will make it more difficult for decisions to be made and make the process even longer than it already is.
“Let us leave the PIA as it is and let the regulators do what they are meant to do and not start the interference into policy making,” she stressed.
Also in his reaction, Chukwuebuka Ibeh, an Energy Lawyer, said that the decision to leave MOFI as the sole shareholder and agent of NNPCL is troubling.
According to Ibeh, MOFI’s expertise is financial management, not the technical or commercial operations of a national oil company. and that by placing NNPCL entirely under MOFI’s control, Nigeria risks sending the wrong signal: that the priority is squeezing revenue out of the company, not building sustainable systems, processes, and technical capabilities. This approach shows a tilt toward short-term money making rather than long-term sector organisation.
In practical terms, it erodes checks and balances and diminishes the independence that NNPCL needs to operate as a credible, competitive oil company, he argued.
“What NNPCL requires is a degree of independence, free from heavy-handed government interference. “The politicisation of its decisions, whether in contracting, investment, or project execution will weaken its corporate governance and deter the kind of investment Nigeria desperately needs, especially in deepwater projects and frontier exploration. Investors put their money where there is clarity, predictability, and professionalism. “If NNPCL is perceived as a tool of government revenue collection rather than a business-minded partner, capital will flow elsewhere,” he explained.
He further added that it was important to address revenue leakages, but reducing NNPCL to an appendage of the Ministry of Finance, the better approach would be to strengthen the systems already in place, improve fiscal monitoring, enforce transparency in cost recovery and production reporting, and empower regulators to hold operators accountable without fear or favour. Nigeria should be building the credibility of its institutions, not weakening them through conflicting mandates.
“Globally, successful national oil companies thrive because they combine commercial agility with a clear separation from regulators and political influence. Nigeria was moving in that direction in the PIA 2021.
“Rolling back those gains now not only risks our reputation but also undermines the very purpose of the reforms: to make the industry more attractive, transparent, and investment-friendly.” Ibeh noted.
He warned that this amendment, if passed as it stands, will speak poorly of Nigeria’s commitment to building a strong and independent NNPCL.
He warned that it risks turning the company into a politically controlled revenue collector rather than the globally competitive player it was intended to become.
“The government must tread carefully. Plugging leakages is important, but it must not come at the cost of transparency, accountability, and investor confidence. Nigeria cannot afford to send the message that it values quick cash over building a modern, efficient petroleum sector.” he opined.
Another energy expert who is also a lawyer but wouldn’t want to be named said, “I don’t think there is any valid legal or economic basis for this. The MoF should focus on managing the country’s finances and economic policies. And NUPRC cannot be a regulator and an operator simultaneously. This is one of the anomalies the PIA set out to cure.”
He said it’s never too early to amend a law. Still, the key question to ask is whether the amendment is necessary, i.e., what is the mistake or gap in the law that the amendment is intended to deal with, saying “And I don’t see that transferring matters relating to petroleum or converting the NUPRC (a regulator) to operate as a regulator and an operator (I categorise an asset holder as an operator.) addresses any gap or mistake in the PIA. On the contrary, the proposed amendments will create problems.”
He argued that the MoF is not equipped to deal with matters relating to petroleum, adding, “And there’s really no special nexus between the MoF and matters relating to petroleum as between the MoF and matters relating to solid minerals. Or will the MoF also take over matters relating to solid minerals development?”
