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Experts divided over NNPC board as Buhari writes Senate to amend PIA

Barely one month after assenting to the Petroleum Industry Act (PIA) 2021, President Muhammadu Buhari is asking the Senate to amend the act that was passed by the National Assembly on July 1.

The PIA is expected to grow investors’ confidence in the sector and create more employment opportunities for residents in host communities. The President’s fresh request was contained in a letter dated September 16, and read during plenary, yesterday, by the Senate President, Ahmad Lawan.

Buhari, in the letter, explained that the appointment of two non-executive members as provided for by the Act to the board of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NPRA) and Upstream Regulatory Commission (URC) does not reflect balanced geopolitical representation.

He, therefore, requested amendment to Sections 11(2)(b) and 34(2)(b), which provides for the Administrative Structure of the PIA, to increase the number of the non-executive members from two to six on the boards of the NPRA and URC. According to him, doing so would foster national unity and “provide a sense of participation and inclusion to almost every section of the country in the decision making of strategic institutions such as the oil industry.”

In addition, the President proposed a deletion of Sections 11(2)(f), 11(2)(g), 34(2)(f) and 34(2)(g) from the Petroleum Industry Act, which would see to the removal of the Ministries of Petroleum and Finance from the Board of the Nigerian Petroleum Regulatory Authority and Upstream Regulatory Commission. He explained that, “the two ministries already have constitutional responsibilities of either supervision or inter-governmental relations. They can continue to perform such roles without being in the board.”

He also sought an amendment to Sections 11(3) and 34(3) to be replaced with a new section that provides that appointments to the Board of the Commission or Authority under Section 2 shall be made by the President, while those made pursuant to subsection (2)(a), (b) and (c) of section shall be subject to confirmation by the Senate.

The President, in his proposed amendment, underscored the need to exempt serving public officers from the established confirmation process for political appointments.

Buhari further requested the Senate to confirm the nominations of members of the Board of the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

The nominees for confirmation included: Idaere Gogo Ogan (Chairman); Engr. Sarki Auwalu (Chief Executive); Abiodun A. Adeniji (Executive Director, Finance and Accounts); and Ogbugo Ukoha (Executive Director, Distributions Systems, Storage and Retail Infrastructure).

In a separate letter, President Buhari while relying on the provision of Section 11(3) of the Petroleum Industry Act 2021, requested the Senate to confirm the appointment of four nominees to the Board of the Upstream Regulatory Commission.

The nominees for confirmation included: Isa Ibrahim Modibo (Chairman); Engr. Gbenga Komolafe (Chief Executive); Hassan Gambo (Executive Commissioner, Finance and Accounts); and Ms Rose Ndong (Executive Commissioner, Exploration and Acreage Management).

According to the President, both requests for the confirmation of the board’s membership were made “in order to fast track the process for the establishment of the Commission.”

HOWEVER, disappointment and cautious optimism were expressed yesterday over the progress being made on the implementation of the PIA, especially, the directive by President Buhari for the incorporation of Nigerian National Petroleum Corporation (NNPC) Limited as well as announcement of a board for the yet to be company.

While the PIA, signed into law in August stipulated that NNPC Limited should be created in six months, a commercial oriented board remained critical to ensure success, especially providing confidence to investors.

Although most stakeholders saw the move by the President as timely, they felt disappointed over what they described as political board against expectations that technocrats would be appointed into the board to drive growth, given the rapid changes in global oil and gas sector. 

Considering that the country has lost billions of naira due to delay in reforming the sector, prevailing development shows that the country may have settled for business as usual despite the new law.

The industry experts noted that while the board somewhat reflects federal character, the capacity of the directors to upturn the gloomy state of the sector in the face of rapidly declining revenue and huge debt remained a mirage.

The board chairman is Senator Ifeanyi Ararume, while Mele Kolo Kyari and Umar I. Ajiya are Chief Executive Officer, and Chief Financial Officer.

Other members are Dr. Tajudeen Umar (North East), Mrs. Lami O. Ahmed (North Central), Mallam Mohammed Lawal (North West), Senator Margaret Chuba Okadigbo (South East), Constance Harry Marshal (South South) and Chief Pius Akinyelure (South West).

The PIA had recommended that appointees into the board must have experience in the oil and gas or related areas. The Chairman of the board, Ararume, currently pursuing his Imo North 2019 senatorial election in court, has practically no experience in the oil and gas sector apart from once serving in committees like Communications, Police Affairs, Federal Character, Finance & Appropriation, Information and Niger Delta.

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