This paper presented at the Nigerina Association of Energy Economics conference highlights the upstream aspects of the Petroleum Industry Bill

1. Highlights of Aspects the Petroleum
Industry Bill
Dr. Adeoye Adefulu
Odujinrin & Adefulu
Barristers, Solicitors & Notaries Public
Barristers Solicitors & Notaries Public
Lagos – Abuja – Port‐Harcourt

2. Outline
• Background
• NNPC Ltd.
NNPC Ltd.
• IJVs
• Upstream Licensing
• Environmental matters
Environmental matters
• Institutional Framework
Odujinrin & Adefuluestd. 1972

3. Background
– Thrust of the reform is to:
• Clearly separate the government functions in the oil
industry – policy, regulatory and commercial
• Create a stronger National Oil Company modeled after
Statoil, Petronas etc with more independence to invest
St t il P t t ith i d d t i t
in local production as well as foreign markets
Odujinrin & Adefuluestd. 1972

4. NNPC Ltd.
NNPC Ltd.
• NNPC to be corporatised
– All assets and liabilities of NNPC to be transferred
(s.137)
• Except PSC assets
Except PSC assets
– How will it be funded?
• Certain moneys to be retained by the government
Certain moneys to be retained by the government
under law‐ would it apply?
Odujinrin & Adefuluestd. 1972

5. IJV
• Should they be created by negotiation or
g
legislation?
• No provisions as to transfer of assets &
liabilities
– Stamp duties issues
– How will the assets be held?
– Will transfer of OMLs require ministerial consent?
q
– Will JV companies be able to book assets
Odujinrin & Adefuluestd. 1972

6. Licensing
• Sections 4 & 257 empowers minister to grant
licenses
– PPL & PML
• May only be granted to indigenous oil
May only be granted to indigenous oil
companies
– Not less than 60% shareholding by Nigerians
– Must be ratified by the Inspectorate or Directorate
y p
Odujinrin & Adefuluestd. 1972

7. Licensing (contd.)
Licensing (contd.)
• Minister grants licenses on the
recommendation of NPD
• NPD to conduct licensing rounds
–NNo more discretionary awards
di ti d
– No explicit link between power of the Minister to
award licences and NPD bid rounds
Odujinrin & Adefuluestd. 1972

8. Environmental Matters
Environmental Matters
• Requirement to conduct environmental
p g
programmes or environmental quality
q y
management programmes
– No distinction between the two
No distinction between the two
• This appears to be in addition to the EIA
requirements
• EP/EQMP regime under Inspectorate while EIA
EP/EQMP regime under Inspectorate while EIA
regime under Ministry of
Environment/NESREA
Odujinrin & Adefuluestd. 1972

9. Institutional Framework
Institutional Framework
• Creation of NPD, NPI, NAPAMA amongst
others
• Regulatory functions not fully separated
–SSeveral references to functions to be carried out
l f t f ti t b i d t
by NPD or NPI
– Should a policy body hold acreage?
• PSC
• Is there a need for NAPAMA
Odujinrin & Adefuluestd. 1972

10. Questions?
Dr Adeoye Adefulu
adeoye.adefulu@odujinrinadefulu.com
Odujinrin & Adefulu
Barristers, Solicitors & Notaries Public
Lagos – Abuja – Port‐Harcourt
Odujinrin & Adefuluestd. 1972