While Nigeria's President Muhammadu Buhari is said to be withholding signing the country's new petroleum bill into law over concerns that it strips the president of powers over the industry, a former manager at the Nigerian National Petroleum Corporation (NNPC) warns that Nigeria could lose its membership in OPEC if the bill becomes law.
If the Petroleum Industry Governance Bill (PIGB) becomes law, it would contravene an OPEC text stipulating that governments need to own at least 55 percent of a country's oil wealth if they want to exercise influence over it, Joseph Ellah, former Group General Manager, Corporate Planning and Development Division at the NNPC, said in a new report, 'Implication of the PIGB for Nigeria', seen by Nigeria's outlet The Guardian.
The NNPC will float 40 percent of its stock on the local stock exchange once the President signs the Petroleum Industry Governance Bill, Nigerian media reported earlier this month. The PIGB is at the heart of an energy sector overhaul aimed at making the corruption-ridden state company profitable. To do this, NNPC group managing director Maikanti Baru said, the company needs to be more commercially driven. For this, it needs cash, which will be raised through the listing.
As part of the overhaul, the NNPC will be split into two: the Nigerian Petroleum Company, which will be an integrated oil company taking all assets of the NNPC with the exception of the production-sharing contracts, and the Nigerian Petroleum Assets Management Company.
While former NNPC manager Ellah argues that divesting part of the NNPC would be handing Nigeria's oil wealth in the hands of multinationals and private foreign capital, other executives and analysts disagree with this position and say that a new oil law-which Nigeria has been trying to adopt for 17 years-shouldn't affect the country's OPEC membership and in fact doesn't have anything to do with the cartel policies.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More