The Federal Government, on Thursday, said the new Petroleum Industry Act had given it the power to hold the equities of the country’s oil firm in trust for the federation.
It stated this in response to concerns raised by state governors on the ownership of the Nigerian National Petroleum Corporation, which was transformed to the Nigerian National Petroleum Company Limited in the new Act.
The governors had argued that the new oil sector law would deny states their fair share of revenue accruing to the Federation Account because it favoured the Federal Government and the NNPC Limited.
They expressed concerns about the provision for the incorporation of the NNPC Limited under the Companies and Allied Matters Act, stressing that rather than reforming the sector, the Act had made the successor firm to the NNPC a more powerful oil company.
The governors also faulted the removal of the requirement to transfer funds generated by the NNPC into the Federation Account, describing it as unconstitutional.
Reacting to the grievances of the governors at a briefing in Abuja on Thursday after inaugurating the committee for the implementation of the PIA, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said the Federal Government would now hold the NNPC in trust for Nigeria.
He said, “We are having an understanding. I do not want to pre-empt our discussions. But we are having an understanding. However, you must agree that in this country, there is a Federal Government and a federation.
“The Federal Government can always hold something in trust for the federation. However, I can assure you that we are already discussing and clarifying some of these issues.”
The minister added, “In this case, what the Federal Government is doing is to hold this equity in trust for the federation. This is not the first time that this has happened.
“The Federal Government is also holding the equity in trust for the federation in the NLNG (Nigeria Liquefied Natural Gas Company). There are a lot of other examples I can give. So, this is not the first time it is happening.
“And so, if the Federal Government holds the equity in trust for the federation, it means that it is holding it in trust for the states and for the local governments, and by extension, for the communities. That is what the Federal Government is doing.”
In the PIA, which the President, Major General Muhammadu Buhari (retd.), directed the committee to implement by 2022, the transformation of the NNPC from a corporation into a limited liability company.
The Act read in part, “The minister shall within six months from the commencement of this Act, cause to be incorporated under the Companies and Allied Matters Act a limited liability company, which shall be called the Nigerian National Petroleum Company Limited (NNPC Limited).
“The minister shall at the incorporation of the NNPC Limited, consult with the Minister of Finance to determine the number and nominal value of the shares to be allotted, which shall form the initial paid-up share capital of the NNPC Limited and the government, shall subscribe and pay cash for the shares.”
Sylva also on Thursday announced the constitution of the nine-man PIA implementation committee, which has seven of its members from the North and two from the South.
SOURCE: nigerianewspapersonline.com