Dennis Mernyi Abuja
With the Federal Government finally announcing the sack of chief executives of agencies affected by the provisions of the Petroleum Industry Act (PIA), the coast is clearer for the full implementation of the PIA. The Act was signed by President Muhammadu Buhari.
The Act, which replaced the extant Petroleum Act 2004, has created an array of provisions and innovations that will impact generally the sector’s rejuvenation.
The PIA was enacted to provide legal governance, regulatory and fiscal framework for the Nigerian Petroleum Industry. It is also provided for the establishment and development of host communities and other related matters in the upstream, midstream, and downstream sectors of the petroleum industry.
The affected agencies repealed by the PIA under Section 310 of the Act include the Petroleum Products Pricing and Regulatory Agency (PPPRA), the Department of Petroleum Resources (DPR), and the Petroleum Equalisation Fund (PEF).
It was gathered that some chief executives of the agencies affected by the act were not willing to vacate their offices. Rather, some have resorted to seeking tenure extension and the renewal of their appointments for a second term.
The PPPRA Executive Secretary, Abdulkadir Saidu Umar, was said to have lobbied and gotten a reappointment by the Presidency to stay for another four-year tenure when his first term ended in April this year. It was gathered that he proceeded on a three-month leave from April, the date his term expired, and returned three months after when his reappointment was announced by the Presidency.
But yesterday, the Minister of Petroleum Resources, Timipre Sylva announced that all those chief executives whose agencies were repealed by the new Petroleum Industry law are illegally occupying their offices.
The DPR, the PPPRA, and the PEF have all been officially scrapped and do not exist anymore, the Federal Government said last Monday in Abuja. It also said while workers of the three agencies would be protected, their chief executives have been relieved of their various appointments.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, who spoke on the side-line of the inauguration of the boards of the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Nigerian Upstream Regulatory Commission in Abuja, explained that with the passage of the Petroleum Industry Act, the NPRA and the NURC has taken over the functions of the DPR, the PPPRA, and the PEF.
Responding to a question on what would happen to DPR following the inauguration of the board of NURC, Sylva said: “It is now a matter of law. The law states that all the assets and even the staff of the DPR are to be invested on the commission and also in the authority. So that means the DPR doesn’t exist anymore. “And, of course, the law specifically repeals the DPR Act, the Petroleum Inspectorate Act, the Petroleum Equalisation Fund Act, and the PPPRA Act. The law specifically repeals them. It is very clear that those agencies do not exist anymore.”
On what would happen to the chief executives and employees of DPR, PEF, and PPPRA, the minister replied: “The law also provides for the staff and the jobs in those agencies to be protected. But I’m sure that, that doesn’t cover, unfortunately, the chief executives, who were on political appointments.” He said the process for aligning the workers of the defunct agencies with the new regulatory bodies had already commenced, as the staff had to be rationalised.
Sylva said: “The authority has its staff coming from the defunct PEF, PPPRA, and DPR. The commission has staff coming over from DPR and the process is going on for the next few weeks. According to him, the inauguration of the boards last Monday marked the beginning of the successor.
He said: “The PIA provides for the upstream regulatory commission and the establishment of the midstream and downstream authority. So far, the chief executives of these agencies have not been in place, but of course, Mr President in his wisdom made the appointment a few weeks ago and they went through a rigorous process of confirmation at the National Assembly. The agencies have now taken off because they now have clear leadership and today’s event marks that beginning for the new agencies.”
With the passage of the PIA into law after spending over 20 years in the process, he said the coast was now clear for investors to fully invest in Nigeria’s oil sector. “Today, the PIA has clarified the legal framework around the sector and the agencies are now in place. So I don’t see anything now stopping investors from coming,” the minister said.
He said competent hands were now handling the business, adding: “Nigerians should brace for exponential growth in the oil and gas sector.” Since the PIA recommended the repeal of some agencies in the Oil and Gas industry, and that such agencies should no longer exist, which means heads of those affected shall henceforth not function in such capacities rather, under new board and headship.
It was gathered that the chief executives of those defunct agencies, who are still holding on to their positions, will under the new law constitute a clog in the wheel of the full take-off of the implementation of the Act aimed at repositioning the Petroleum sector.
The NNPC’s board has, however, been inaugurated with the Group Managing Director (GMD), Mele Kyari been retained as Nigeria’s giant oil company’s chief executive.
The PPPRA also got a new Board chairman in the person of Atuonwo A. Obinna, whose appointment was announced on the same day with the Executive Secretary, Abdulkadir Saidu Umar, who got reappointed after his earlier four-year tenure expired early April this year.
But with the latest development, it is expected that the appointments will be nullified. Under section 310, Chapter 5 of the Petroleum Industry Act (PIA) as provided in sub-Section (1) that those agencies repealed by the provisions of the Act cease to exist under Section 54 (3) of the Act from the date the Act became operational and gazetted.
The PIA was gazetted on August 27, 2021. According to the Act, “from the effective date of the Act, the following enactments and regulations are repealed. “Among others are (e) NNPC Act (NNPC) 1977 no. 33, Cap N124 Laws of the Federation of Nigeria as amended when NNPC ceases to exist under section 54 (3) of this Act.
(f) Petroleum Products Pricing Regulatory Agency (Establishment) Act No 8, 2003.
Similarly, functions of the Petroleum Equalisation Fund (PEF) under the second schedule of the section are split into different authorities.
The provisions of the Act calls for an effective end to the existence of the affected agencies. It is expected that a windup process should have commenced instead of the present chief executives griping on to offices or insisting on either their transforming or converting into the new arrangement provided for in the new law aimed at strengthening transparency in the Petroleum Industry.
