Towards an Efficient Nigerian National Oil Company - Legal Reform

ABSTRACT

If each resource (petroleum) rich nation was a living cell, the national oil company (NOC) would be the nucleus. NOCs are that important. They are the economic engine rooms of resource dependent nations. Nigeria’s NOC; the Nigeria National Petroleum Corporation (NNPC) is however yet to fulfill this role in the Nigerian economy. Since its establishment in 1977, a steady stream of reports and reviews have documented NNPC’s dismal legacy of lost revenues, inefficiency and corruption. Despite the lost earnings and the glaring performance failures—fundamental reform is yet to take place within the NNPC and recently President Buhari refused to Assent to the Petroleum Industry Governance Bill (PIGB) 2018, citing the whittling down of his powers as the Minister of Petroleum. The persistent absence of political will to reform the NNPC is again demonstrated in the President’s rejeciont of the 2018 PIGB and further illustrates just how deeply NNPC is embedded in the power structures of Nigeria, and how difficult a job true reformers face. For Nigeria to secure full value from her petroleum resources, this thesis will propose a two track reform agenda. The first track of reforms to be put forward in this thesis focuses on Statutory reforms which includes; removal of regulatory functions from the NNPC, NNPC privatization & commercialization, overhauling of Petroleum Industry legislations among others. These structural reforms are aimed at a total overhaul of the NNPC to position the organization for growth and profitability. For the second track, recommended reforms focus on fixing institutional problems within the NNPC itself which may not require legislative intervention. In the end this thesis argues that to position the NNPC on the right path reform Bills including the 2018 PIGB, the Petroleum Industry Administration Bill (PIAB), Petroleum Industry Fiscal Bill (PIFB), Petroleum Host & Impacted Communities Development Bill (PH&ICDB) all of 2018 must be signed into law. The Executive and Legislative arms of government are therefore advised to work together to reach a compromise on the Bills for the greater good of Nigeria and NNPC.