In Full Compliance With PIA, Buhari, Finance Minister Sign Off Transfer Of Assets To NNPC Ltd

As the country awaits the formal unveiling of the Nigerian National Petroleum Company Ltd on July 19, President Muhammadu Buhari who is himself the Minister of Petroleum Resources, and the Minister of Finance Budget and National Planning, Mrs Zainab Ahmed have signed off the Transfer of Assets from the Nigerian National Petroleum Corporation to the NNPC Ltd, THE WHISTLER can report.

THE WHISTLER authoritatively gathered that the signing off by the President and the Minister of Finance effectively means that all such assets, interests and liabilities of the Corporation has been transferred to NNPC Limited in line with the Provisions of the Petroleum Industry Act.

It was learnt, by this Website that the President appended his signature on the instrument of transfer last week in preparation for the formal unveiling of the NNPC Ltd on July 19.

This is in line with Section 54 of the PIA which stated that Bonds, Hypathecations, Securities, Deeds, Contracts, Instruments, Documents and working arrangements with regards to assets, interests or liabilities transferred to NNPC Limited or any of its subsidiary under subsection (1) will be effective and enforceable against or in favour of NNPC Limited.

Specifically, Section 54 of the Act stated that “The Minister (of Petroleum Resources) and the Minister of Finance shall within 18 months of the effective date determine the assets, interests and liabilities of NNPC to be transferred to NNPC Limited or its subsidiaries and upon the identification, the Minister shall cause such assets, interests and liabilities to be transferred to NNPC Limited.

“Assets, interests and liabilities of NNPC not transferred to NNPC Limited or its subsidiary under subsection (1), shall remain the assets. interests and liabilities of NNPC until they become extinguished or transferred to the Government and six months following the determination under section 54 (1) of this Act, the Minister, the Minister of Finance and the Attorney-General of the Federation shall develop a framework for the payment of the liabilities not transferred to NNPC Limited and if such determination of which assets, interests and liabilities to be transferred has not been concluded within the stipulated period of 18 months. all the assets, interests, liabilities of NNPC is deemed to be transferred to NNPC Limited after 18 months from the effective date.

“NNPC shall cease to exist after its remaining assets, interests and liabilities other than its assets, interests and liabilities transferred to NNPC. Limited of its subsidiaries under subsection (1) shall have been extinguished of transferred to the Government.”

The legislation added that any pending action of proceeding brought by or against NNPC before the transfer date with regard to assets, interests or liabilities transferred to NNPC Limited under subsection (1) may be enforced of continued by or against NNPC Limited as the successor of NNPC.

The NNPC LTD on July 1, fully transformed into a Company whose operations will be regulated under the Companies and Allied Matters Act following the implementation of the Petroleum Industry Act.

The Corporate Affairs Commission had on September 21 last year, completed the incorporation of the NNPC Ltd in accordance with the provisions of the Petroleum Industry Act 2021.

The PIA was signed into law by President Muhammadu Buhari on 16th August, 2021, following its passage by the National Assembly in July of the same year. With the registration by the CAC, the NNPC Ltd was floated with an initial capital of N200bn making history as the company with the highest share capital in the country.

Between when the PIA was signed into law in August last year and now, the management of the NNPC Ltd had taken proactive steps to prepare it for the take-off as a CAMA company.

For instance, several engagements have taken place between the NNPC, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the Nigerian Upstream Petroleum Regulatory Commission, the Ministry of Petroleum Resources, Ministry of Finance, Governors, legislators, host communities and other key stakeholders to understand the impact of the changes the PIA brings.

Also, a PIA transition committee was set up to drive the transitioning of NNPC into a full CAMA Company.

The NNPC had also set up an in-house committee supported by renown reputable consultants (McKinsey, KPMG, PWC, Wood McKenzie and Olaniwun Ajayi LP) to define and implement the transition roadmap.

This roadmap includes valuation of the assets and liabilities, development of corporate governance frameworks, rebranding of NNPC to NNPC Ltd and change management.

Flowing from the PIA, findings showed that one of the things that will be different following the NNPC transitioning is that it is expected to become a commercially oriented and profit-driven national petroleum company independent of government and audited annually.

What this means is that in terms of operations, the NNPC would be managed like a private sector enterprise and unlike previously when it was owned by the government, the NNPC is expected to become more efficient in its operations.

This will enable the Company to effectively maximize returns on investment for the 200 million Nigerians, ensure returns for shareholders and pay taxes to the government.

Where there is an impact of its operations on prices of petroleum products, the government will be expected to determine how the differential will be managed. What this implies is that impact of prices will not automatically be transferred to the citizens as the government remains committed to providing energy security and sustaining the economy.

Going by the transitioning, the NNPC’s operations will not be subsidized by the government because as a CAMA Company, it would be expected to pay dividends to shareholders which in this case is the government.

Speaking last week at the 21st Nigeria Oil and Gas (NOG) Conference and Exhibition with the theme: “Funding the Nigerian Energy Mix for Sustainable Economic Growth,” Kyari maintained that the mode of operation of the national oil firm would be no different from the private firms.

He said the transition of the NNPC LTD into an entity that would be regulated in line with the provisions of the Companies and Allied Matters Act will position it as a partner of choice to all oil and gas companies globally.

Kyari said, “On 1st of July, we crossed over to the NNPC Limited both technically and financially on every aspect. Not only that, on the 19th of July, I’m inviting all of you to be present. Mr. president will unveil the NNPC Limited to all of us on the 19th of July, and I’m inviting you.

“The meaning of this to our industry is that you’re going to have the partner of choice, the partner that will support you, the partner that will be the largest capitalized company in Africa. Not only that, a partner that will be born of best practice, of everything that you can think of because we’re going to be a CAMA company. We are going to be another Shell, decision making would be easy, finances will also be easy.”