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NNPC transformation: Lukman worries about global credit discrimination

By Oscarline Onwuemenyi
ABUJA— The Minister of Petroleum Resources, Dr. Rilwanu Lukman, has asked international financial organizations not to discriminate against the Nigeria National Petroleum Corporation (NNPC) when it fully transforms into the Nigerian National Petroleum Company Limited (NNPC Ltd) as recommended by the Petroleum Industry Bill.

Lukman, who expressed the concern on Friday when he hosted a delegation of the World Bank in Abuja , observed that the government ownership of the transformed national oil corporation might expose it to a phenomenon known internationally as ‘Negative Pledge.’

He said, “As you know, with the coming into law of the PIB, our National Oil Company, the NNPC, will become a fully commercial entity, incorporated under the Companies and Allied Matters Act of Nigeria. “Although government-owned, it is going to be subjected to the same rules applicable to private commercial entities.

“We believe that our national oil company, which is going to be run as a commercial, profit-oriented business, should not be discriminated against in the international credit market, simply on account of who owns it.”

According to Lukman, the company should be given the opportunity to compete favourably with other fully privately-owned companies operating in the sector.  He noted that the visit by the World Bank group was a follow-up to the one the ministry officials undertook to Washington DC , in November 2009.

“During the visit, our delegation and that of the World Bank discussed a number of issues relating to the on-going reform programme in the Nigerian oil and gas industry and we had sought the technical assistance of the Bank in the implementation of the programme,” he addd.

Rilwan further noted that the visit was aimed at initiating discussions with various stakeholders, especially those who would be directly involved in the implementation of the reform programme, with a view to determining the nature of the technical assistance required.

“I will like to appeal to all stakeholders that are scheduled to meet with the team in the next few days to give them all the support they need to make their mission very successful. The reformation of the Nigerian oil and gas industry cannot be delayed any longer,” Lukman stressed.

Lukman pointed out that given the fundamental changes proposed for the Nigerian oil and gas industry in the PIB, it is natural to expect some reservations from some corners.

He said, “I must state that having reviewed the report of the International Monetary Fund on the proposed bill, we had engaged various stakeholders who had expressed misgivings about aspects of the bill, with a view to addressing their concerns.

“Several public hearings were conducted by the National Assembly. I am pleased to say that we have succeeded in reaching a broad consensus on most of the areas of concern.”

The minister stressed that “the objective of government in the reform programme is to create the most conducive environment for the nation’s oil and gas industry to thrive in an increasingly challenging global energy scene.”

He added, “The global nature of our industry dictates that we should run it according to international best practices; anything else will not be acceptable.”

Responding to the Minister’s remarks, the head of the World Bank delegation, Mr. Charles McPherson, said his group was in the country “to follow-up on areas of possible cooperation between the Nigerian government and the World Bank.”

According to him, the oil and gas industry remained the most critical towards the economic growth and development of Nigeria , adding that that the World Bank was committed to helping the government achieve its objectives for the industry.

He said, “We are here primarily to listen, and we hope to be in regular contact with the stakeholders to explore in more details areas of cooperation and technical assistance. We’ve already had several rewarding meetings and we hope this meeting will further enhance the discussions.”


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