The Petroleum and Industry Bill 2012 (Part ii)

The Agency shall be structured into departments as its Board, with the approval of the Minister, may from time to time deem appropriate for the effective discharge of its functions.

Published

12 years ago

July 25, 2012

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(1) There is established under this Act the Downstream Petroleum Regulatory

Agency (“the Agency”) a body corporate with perpetual succession, a common

seal and which may sue or be sued in its corporate name.

(2) The Agency shall have power to –

(a) enter into contracts and incur obligations;

(b) acquire, hold, mortgage, purchase and deal with property, whether movable

or immovable, real or personal; and

functions and duties under this Act. 32

(3) The assets and liabilities relating to the downstream petroleum sector functions

hither to perform by the Department of Petroleum Resources of the Ministry and

the Petroleum Products Pricing and Regulatory Agency shall be vested in the

Agency.

(4) The Agency shall be structured into departments as its Board, with the approval of the Minister, may from time to time deem appropriate for the effective discharge of its functions.

44. Objectives of the Agency

The objectives of the Agency are to –

(a) promote the efficient, safe, effective and sustainable infrastructural development

of the downstream sector of the petroleum industry;

(b) promote the healthy, safe and efficient conduct of all downstream petroleum

operations;

(d) regulate commercial activities within the downstream sector as designated by the

Minister;

(e) promote the efficient development of transportation infrastructure for crude oil to

downstream facilities, gas and petroleum products;

(f) determine and ensure the implementation and maintenance of technical

standards and specifications applicable to the downstream petroleum sector;

(g) execute Government policies for the downstream petroleum sector as may be

assigned by the Minister;

(h) facilitate an enabling environment for investments in the downstream petroleum

sector; and

(i) pursue such other objectives consistent with the objectives of this Act as may be

determined from time to time by the Minister.

45. Functions of the Agency

(1) The functions of the Agency in collaboration of other relevant Government

institutions where applicable are to:

(a) administer and enforce policies, laws and regulations relating to all aspects

of downstream petroleum operations as may be assigned to it by law; 33

(b) ensure and enforce compliance with the terms and conditions of all

licences, permits and authorizations issued in respect of downstream

petroleum operations;

operation and maintenance for all plant, installations and facilities pertaining

to downstream petroleum operations;

(d) ensure adherence to national and applicable international environmental

standards by all persons involved in downstream petroleum operations;

(e) establish, monitor and regulate health and safety measures relating to all

aspects of downstream petroleum operations;

(f) keep registers of all licences, permits, and other authorizations issued by

the Agency or granted by the Minister for downstream petroleum

operations, and any renewals, amendments, suspensions and revocations

thereof;

(g) carry out enquiries, tests, audits or investigations and take such steps as

may be necessary to monitor the activities of the holders of licences,

permits and other authorizations and to secure and enforce compliance

with the terms and conditions thereof;

(h) publish reports and statistics on the downstream petroleum sector;

(i) issue, and renew licences, permits or other authorizations, and modify,

amend, extend, suspend, review, cancel and reissue, revoke or terminate

such licences, permits or other authorizations;

(j) regulate the activities of the downstream petroleum sector inNigeriain a

non-discriminatory and transparent manner;

(k) set cost benchmarks for downstream petroleum operations;

(l) regulate bulk storage, transportation and transmission and set rules for the

common carrier systems for crude oil, gas and petroleum products in

downstream petroleum sector;

(m) promote sustainable infrastructural development in the downstream

petroleum sector;

(n) promote competition and private sector participation in the downstream

petroleum sectors;

(o) facilitate the satisfaction of all economic and strategic demands for

downstream gas; 34

(p) monitor and enforce the actual application of tariff and pricing framework as

specified by regulation ;

(q) monitor market behaviour including the development and maintenance of

competitive markets in addition to the regulation of tariffs in the downstream

petroleum sectors;

(r) arrest situations of abuse of dominant power and restrictive business

practices in the downstream petroleum sector;

(s) establish and implement appropriate dispute settlement mechanisms

relating to parties engaged in downstream petroleum operations as may be

prescribed by regulations;

(t) inspect measurement equipment and any other facilities for downstream

petroleum operations and ensure compliance with safety standards as

prescribed by regulation ;

(u) issue clean certificates of inspection at the oil terminals to exporters of

crude oil upon satisfaction that the requirements as to quality and quantity

have been complied with;

(v) facilitate the supply of gas to the strategic sectors, in accordance with the

approved national gas pricing framework;

(w) issue, and renew downstream licences or permits or authorizations, and

modify, amend, extend, suspend, review, cancel and reissue, revoke or

terminate such licences or permits or authorizations and the licences or

permits or authorizations shall be for activities connected with but not

limited to the following:

(i) downstream gas distribution;

(ii) petroleum products;

(iii) storage;

(iv) retail outlets;

(v) transportation; and

(vi) design and construction of all facilities including those for gas and

petrochemicals;

(vii) establish the methodology for calculating the fair market value of

petroleum products as may be prescribed by regulations; 35

(viii) regulate bulk storage and distribution and implement rules for

petroleum products, petroleum product pipelines and regional storage

depots as may be prescribed by regulations; and

(ix) promote security of fuel supply in the downstream petroleum sector;

(x) subject to the approval of the Minister, develop and implement market rules

for trading in wholesale gas supplies to downstream gas distributors;

(y) implement consumer protection measures in accordance with the provisions

of this Act;

(z) undertake consultation with customers, licensees and industry participants

where necessary;

(aa) promote and protect the interests of consumers;

(ab) promote the principles of sustainable resource and infrastructural

development through the efficient supply and use of downstream gas and

other petroleum products;

(ac) regulate and ensure the supply, distribution, marketing and retail of

petroleum products as may be prescribed by regulations;

(ad) administer and monitor the national operating and strategic stocks of

petroleum products as set by the Minister;

(ae) monitor and ensure the quality and process of conversion or blending of

whatever material by whatever method to fuels, bio-fuels or derivatives for

automotive use inNigeria; as may be prescribed by regulations; and

(af) do such other things as are necessary and expedient for the effective and

full discharge of any of its functions under this Act.

46. Powers of the Agency

In carrying out its functions under this Act, the Agency shall have power to –

(a) modify, extend, renew, suspend and revoke any licence or permit issued by it

pursuant to the provisions of this Act ;

(b) monitor and enforce the application of its tariff and pricing framework for third

party access to facilities in the upstream petroleum sector in accordance with the

provisions of this Act;

document concerning licensed activities in the downstream petroleum sector

from any licensee or permit holder whether or not it contains business secrets; 36

(d) where it considers it to be in the public interest:

(i) publish information relating to downstream petroleum operations provided

by licensees and permit holders;

(ii) require licensees and permit holders to publish certain information relating

to downstream petroleum operations;

(e) impose and enforce relevant licence or permit conditions and enforce the

specific requirements of this Act;

(f) institute legal proceedings against any licensee, lessee or permit holder for

failure to comply with licence or permit conditions or other requirements of this

Act;

(g) enforce the provisions of any enactments or regulations applicable to downstream

petroleum operations made prior to the commencement of this Act; and

(h) to enforce the provisions of any regulations hitherto administered by the

Department of Petroleum Resources of the Ministry in the downstream sector.

47. Board of the Agency

(1) There shall be for the Agency, a Board (in this Act referred to as “the Board”),

responsible for the administration of the affairs and business of the Agency.

(2) The Board shall consist of the following members appointed by the President on

the recommendation of the Minister:

(a) the Chairman, who shall be a person of high integrity and , substantial

professional experience;

(b) the Director-General of the Agency;

(d) two representatives from the Ministry of Petroleum Resources each not

below the rank of a director;

(e) a representative of the Federal Ministry of Finance, not below the rank of a

director;

(f) a representative of the National Union of Petroleum and Natural Gas

Workers (NUPENG);

(g) a representative of the Petroleum and Natural Gas Senior Staff Association

(PENGASSAN); and 37

(h) three other persons who shall be of high integrity and substantial

professional experience.

(3) The persons appointed in paragraph (a) and (h) of subsection (2) of this section

shall hold office for a term of four years in the first instance which term may be

renewed for another term of four years only, on such terms and conditions as

may be specified in the letter of appointment.

(4) Appointments to the Board in respect of persons appointed pursuant to

paragraphs (a), (f), (g) and (h) of subsection (2) of this section shall be on part-

time basis.

(5) The proceedings of the Board of the Agency and other ancillary matters shall be

in accordance with the provisions of the Second Schedule to this Act.

(6) Subject to subsection (5) of this section, the Board shall have the power to make

standing orders for the regulation of its proceedings and meetings and acts of the

Board shall be deemed to be acts of the Agency.

(7) The conflict of interest provisions contained in the Second Schedule to this Act

shall apply to all members of the Board.

48. Functions of the Board.

The Board shall ensure that the Agency performs its statutory functions under this Act

by –

(a) providing general guidelines related to the functions of the Agency;

(b) reviewing and approving the strategic plans of the Agency;

(d) subject to the approval of the Minister, structuring the Agency into such number

of departments as it deems fit for the effective discharge of the functions of the

Agency; and

(e) carrying out such other acts or things which in the opinion of the Directors are

necessary to ensure the efficient performance of the Agency under this Act or as

may be delegated to the Agency by the Minister.

49. Remuneration of members of the Board

Members of the Board shall be paid from the Fund of the Agency such remuneration

and allowances as may be specified by the Government from time to time by

guidelines issued by the Government. 38

50. Removal of a member of the Board

A member of the Board may be suspended, or removed from office by the President if

the member –

(a) is found to have been unqualified for appointment as a member of the Board

pursuant to paragraphs (a) and (h) of section 47(2) of this Act or is in breach of

section 56 of this Act after his appointment;

(b) has demonstrated inability to effectively perform the duties of his office;

consent of the Chairman and where the Chairman is involved without the

consent of the Minister except for good reason is shown for such absence;

(d) is guilty of serious misconduct ;

(e) in the case of a person possessed of professional qualifications, he is

disqualified or suspended from practicing his profession in any part of the world

by an order of a competent authority; or

(f) is in breach of the conflict of interest rules set out in the Second Schedule to this

Act.

51. Resignation of a member of the Board

A member of the Board may resign his appointment by giving three months written

notice addressed to the President through the Minister.

52. Vacancy on the Board

(1) A vacancy on the Board shall occur if a member of the Board—

(a) dies;

(b) is removed from office in accordance with section 51 of this Act;

(d) completes his tenure of office.

(2) A vacancy on the Board shall be filled by the appointment of another person to

the vacant office by the President in accordance with section 48 of this Act, as

soon as is reasonably practicable after the occurrence of such vacancy. 39

53. The Director-General and Directors

(1) There shall be for the Agency a Director-General and such other Directors as

may be approved by the Minister.

(2) The persons to be appointed Director-General and the Directors shall have

extensive technical or professional knowledge of the petroleum industry with a

minimum of ten years experience at management level and shall be selected

through a transparent merit-based recruitment process.

(3) The Director-General shall be the chief executive and accounting officer of the

Agency responsible for the day-to-day running of the affairs of the Agency with

the support of the Directors.

(4) The Director-General and the Directors shall perform such other functions as the

Board may determine from time to time.

54. Tenure, remuneration and conditions of service of the Director-General

and Directors

(1) The Director-General shall serve for a term of four years from the date of his

appointment at the expiration of which the President may renew his term for a

further period of four years and no more and on such terms and conditions as

may be specified in his letter of appointment.

(2) The remuneration and conditions of service of the Director-General shall be at a

level sufficient to attract qualified professionals within the petroleum industry.

(3) The conflict of interest provisions contained in the Second Schedule to this Act

shall apply to all members of the Board.

55. Disqualification

A person shall not be appointed as Director-General or Director of the Agency unless

the person –

(a) is a Nigerian citizen;

(b) has not, in terms of the laws in force in any country-

(i) been adjudged or declared bankrupt or insolvent;

(ii) made an assignment to, or arrangement or composition with his creditors

which has not been rescinded or set aside;

(iii) been declared to be of unsound mind;

(iv) been convicted of an offence involving fraud or dishonesty; or 40

(v) been disqualified or suspended from practising his profession in any part of

the world by the order of a competent authority made in respect of him

personally.

56. Removal of a member of the Board, the Director General and Directors

from office

The President may remove the Director-General or a Director from office if –

(a) he recommits an act of gross misconduct;

(b) he has demonstrated inability to effectively perform the duties of the office;

that the member Director General or Director should continue in office.

57. Secretary

(1) The Board shall appoint a Secretary for the Agency.

(2) The Secretary shall report to the Director-General of the Agency and shall be

responsible for –

(a) making arrangements for Board meetings and preparing the agenda and

minutes of such meetings;

(b) communicating the decisions of the Board to the Board members;

(d) arranging for payment of fees and allowances of meetings and all other

matters affecting members of the Board; and

(e) any other duties affecting the Agency as may be assigned to the Secretary

, by the Chairman or the Director-General of the Agency.

(2) The Secretary shall be a lawyer with a minimum of ten years post qualification

experience.

58. Other staff, etc

(1) The Board may appoint for the Agency such other persons as employees as it

may deem necessary for the effective performance of the functions of the

Agency.

(2) The employment of the Agency’s staff, including the Secretary, shall be subject

to such terms and conditions as may from time to time be stipulated by the Board

and contained in the respective employment contracts. 41

(3) The Board shall determine and review from time to time, the remuneration and

allowances, payable to the Agency’s staff.

(4) The Board shall make staff regulations generally relating to the conditions of

service of its employees, and in particular, but without prejudice to the generality

of the foregoing, such regulations may provide for –

(a) the appointment, promotion, dismissal and discipline of employees;

(b) appeals by the employees against dismissal or other disciplinary measures;

and

employees.

(5) Staff of the Agency shall be public officers as defined in the Constitution of the

FederalRepublicofNigeria, 1999.

(6) For the purpose of this section, appointment shall include secondment, transfer

and contract appointments.

59. Specific provisions on conditions of service

The conditions of service of staff of the Agency shall be at a level sufficient to attract

qualified professionals within the petroleum industry and shall take into account –

(a) the specialised nature of work to be performed by the staff;

(b) the need to ensure financial prudence of the Agency; and

responsibilities, expertise and skills.

60. Pensions

(1) Employment in the Agency shall be subject to the provisions of the Pensions

Reform Act and officers and employees of the Agency shall be entitled to

pension and other retirement benefits as prescribed under the Pensions Reform

Act.

(2) Nothing in subsection (1) of this section shall prohibit the Agency from appointing

a person to any office on terms that preclude the grant of a pension or other

retirement benefits in respect of that office.

(3) Subject to the Pensions Reform Act, and notwithstanding the provisions of this

section, the Agency shall continue to fulfil all obligations in respect of pensions

schemes to which the Department of Petroleum Resources of the Ministry and 42

the Petroleum Products Pricing and Regulatory Agency prior to the transfer of its

assets and liabilities to the Agency.

61. Financial provisions

(1) The Agency shall not later than 30th September or such other date to be

determined by the Ministry of Finance in each financial year, prepare and present

through the Minister for appropriation, a statement of estimated income and

expenditure for the following financial year.

(2) Notwithstanding the provisions of subsection (1) of this section, the Agency may

also, in any financial year, submit supplementary or adjusted statements of

estimated income and expenditure through the Minister for appropriation.

(3) The financial year of the Agency shall be a period of twelve calendar months

commencing on the 1st of January in each year.

62. Funding

(1) The Agency shall establish and maintain a fund (‘the Fund’) from which all

expenditures incurred by the Agency shall be defrayed..

(2) The Fund shall comprise monies derived from the following sources:

(a) such monies as may be appropriated to the Agency from time to time by the

National Assembly ;

(b) fees charged for services rendered to holders of downstream licences,

permits and authorizations;

time to time on persons engaged in downstream petroleum operations;

(d) fees charged in respect of services performed by the Agency;

(e) income received from publications produced by the Agency and from

reviews of environmental impact assessment reports, environmental

evaluation reports and other related activities;

(f) fees for services rendered to non-petroleum marketing companies and

service companies and for other services performed generally;

(g) gifts, loans, grants and grants-in-aid; and

(h) such money as may be received by the Agency either in the course of its

operations, in relation to the exercise of its powers and functions under this

Act or in respect of any property vested in the Agency. 43

(3) The Agency shall apply the proceeds of the Fund established pursuant to

subsection (1) of this section:

(a) to meet the administrative and operating costs of the Agency;

(b) to provide for the payment of salaries, wages, fees or other remuneration or

allowances, pensions and other retirement benefits payable to staff or

employees of the Agency;

(d) for purposes of investment, as prescribed by the Trustee Investments Act

or any other relevant legislation subject to the approval of the Minister; and

(e) in connection with the carrying out of its functions under this Act.

(4) For any particular year, if monies accruing to the Fund from appropriation

established pursuant to subsection (2) of this section, has not been fully applied

for the purposes pursuant to subsection (3) of this section, such monies shall be

paid into the Consolidated Revenue Fund.

63. Power to accept gifts

(1) The Agency may accept gifts of money or other property upon such terms and

conditions as may be specified by the person or organisation making the gift

provided such gifts are not inconsistent with the objectives and functions of the

Agency under this Act.

(2) Nothing in subsection (1) of this section or in this Act shall be construed to allow

any member of the Board or staff of the Agency to accept gifts for their personal

use.

64. Accounts and audit

The Agency shall keep proper accounts of its income and expenditure in respect of

each financial year and shall cause its accounts to be audited within six months after

the end of each year by auditors appointed by the Agency from a list and in

accordance with the guidelines supplied by the Auditor-General for the Federation.

65. Mid-year and annual reports

(1) The Agency shall submit to the Minister a mid-year report of its operations and

finances not later than 31st August of each year and an annual report of its

operations, performance and audited financial report of the preceding year not

later than 31st May of the following year. 44

(2) A summary of the annual report and audited financial report of the Agency for the

previous year shall be published on the website of the Agency for public notice

not later than 31st of July of each year.

66. Exemption from income tax

(1) The provisions of any enactment relating to the taxation of companies or trust

funds shall not apply to the Agency.

(2) Where contributions to the Fund of the Agency are made by a person subject to

tax under the provisions of any law in force inNigeria, all such contributions shall

be tax deductible.

67. Limitation of suits against the Agency, etc

(1) Subject to the provisions of this Act, the provisions of the Public Officers

Protection Act shall apply in relation to any suit instituted against the Agency, the

Director General, an officer or employee of the Agency.

(2) No suit shall lie against the Agency, the Director General or any other officer or

employee of the Agency for any act done in pursuance or execution of this Act or

any other law or enactment, or of any public duty or authority in respect of any

alleged neglect or default in the execution of this Act or any other law or

enactment, duty or authority, or be instituted in any court unless it is

commenced—

(a) within three months next after the act, neglect or default complained of ; or

(b) in the case of a continuation of damage or injury, within six months next

after the ceasing thereof.

(3) No suit shall be commenced against the Agency, the Director General or any

officer or employee of the Agency before the expiration of a period of one month

after written notice of the intention to commence the suit shall have been served

on the Agency by the intending plaintiff or his agent.

(4) The notice referred to in subsection (3) of this section shall clearly and explicitly

state the cause of action, the particulars of the claim, the name and address of

the intending plaintiff and the relief which he claims.

68. Service of court processes on Agency

A notice, summons or other document required or authorised to be served on the

Agency under the provisions of this Act or any other law or enactment may be served

by delivering it to the office of the Director General of the Agency or any of its

Directors. 45

69. Restriction on execution against the Agency’s property

(1) In any action or suit against the Agency, no execution or attachment of its

physical property shall be issued and any judgment against the Agency may be

enforced through garnishee proceedings provided that not less than three

months notice of the intention to commence the garnishee proceedings shall

have been given to the Agency.

(2) Any sum of money which may by the judgment of any court be awarded against

the Agency shall, subject to any direction given by the court where no notice of

appeal against the judgment has been given, be paid from the Fund of the

Agency.

70. Special powers

The Agency shall have power to investigate any person or organisation in relation to

any of its functions or powers under this Act to ascertain any violation of the provisions

of this Act.

71. Special Investigation Unit

(1) For the effective conduct of its functions, the Agency shall have a Special

Investigation Unit.

(2) The Special Investigation Unit or an officer authorised on its behalf shall have

powers, with respect to matters under the authority of the Agency in this Act, to:

(a) investigate acts which may constitute offences under this Act;

(b) collaborate with other government agencies and persons in relation to the

detection or prosecution of offences under this Act;

where it has reasons to believe that illegal petroleum operations are going

on;

(d) enter and search any premises or carrier, including vehicles or any other

instrumentalities whatsoever which is reasonably believed to be connected

with the commission of an offence;

(e) seize any item or substance which is reasonably believed to have been

used in the commission of an offence under this Act.

(f) arrest without warrant any person who is found committing any offence

under this Act or any regulations made under this Act, and shall hand over

any person so arrested to a police officer immediately; and46

(g) in conjunction with the Nigerian Police force and other relevant law

enforcement agencies arrest with a warrant obtained from a judicial officer

any person whom he reasonably believes to have committed an offence

under this Act;

72. Indemnity of Board and employees

(1) Every member of the Board and every employee of the Agency shall be

indemnified out of the assets of the Agency against any liability incurred in

defending any proceeding against the Agency, whether civil or criminal, if such

proceedings are brought against the member of the Board or employee in their

official capacity.

(2) Notwithstanding the provisions of subsection (1) of this section, the Agency shall

not indemnify any member of the Board or employee of the Agency for any

liability incurred as a result of the wilful negligence of the member or employee,

as the case may be, or conduct or acts which such person knew or ought to have

known to be unlawful.

E. PETROLEUM TECHNOLOGY DEVELOPMENT FUND

73. Establishment of the Petroleum Technology Development Fund

(1) There shall continue to be the Petroleum Technology Development Fund (“the

Development Fund”) a body corporate with perpetual succession and a

common seal.

(2) The development Fund may sue and be sued in its corporate name.

(3) The Development Fund shall have power to-

(a) enter into contracts and incur obligations;

(b) acquire, hold, mortgage, purchase and deal with property, whether movable

or immovable, real or personal; and

functions and duties under this Act.

74. Sources of the Development Fund

There shall be paid into the Development Fund, monies, comprising: 47

(a) the balance of monetary assets outstanding as at the Effective Date in the

accounts of the Petroleum Technology Development Fund established by the

Petroleum Technology Development Act, 2004;

(b) funds and grants accruing from multilateral agencies, bilateral institutions and

related sources dedicated partly or wholly to the development of technology,

capacities and capabilities in the Nigerian petroleum industry;

Government or the Development Fund for development of petroleum technology,

capacities and capabilities or the training and education of Nigerians in the

petroleum industry; and

(d) monies in the accounts of the Development Fund together with interest payable

in respect of such monies.

75. Reserve account

(1) The Inspectorate or any other bodies responsible for the collection of the

monies listed under section 74 of this Act shall pay all such sums directly into the

Development Fund’s Reserve Account with the Central Bank ofNigerianot later

than sixty days after such sums have been received.

(2) All monies paid into the Development Fund’s Reserve Account in accordance

with subsection (1) of this section shall be under the control of the Board of the

Development Fund.

(3) The Board of the Development Fund shall not later than 30th September in each

financial year, approve the Development Fund’s Programme of Action with its

cost implications and a statement of estimated income and expenditure for the

following financial year.

(4) The monies in the Development Fund’s Reserve Account which are not

disbursed to the Development Fund in accordance with subsection (3) of this

section shall be held or invested in such manner as may be determined by the

Board subject to the Minister’s approval.

(5) The Development Fund shall maintain operational accounts with any bank as

may from time to time be approved by the Accountant General of the Federation.

(6) The annual audited account of the Reserve Account with the Central Bank of

Nigeriashall be prepared by the Board in consultation with the Accountant

General of the Federation and submitted to the Auditor General of the Federation

within six months of the end of the financial year to which they relate.

(7) The certified annual accounts of the Reserve Account and the audit report

thereon, together with a report on the operations of the Development Fund, shall

be submitted to the National Assembly through the Minister. 48

76. Purpose of the Development Fund

(1) The Development Fund shall be used for the purposes of training Nigerians to

qualify as graduates, professionals, technicians and craftsmen in the fields of

engineering, geology, science and management and other related fields in the

petroleum industry and in particular, and without prejudice to the generality of the

foregoing, the funds shall be utilised to –

(a) provide scholarships and bursaries, wholly or partially in universities,

institutions and in petroleum undertakings inNigeriaor abroad;

(b) maintain, supplement, or subsidise such training or education as specified

in this subsection;

institutions as may be approved by the Board;

(d) initiate, design and implement effective indigenous research and capacity

development forNigeria’s petroleum industry;

(e) liaise with research centres inNigeriaand abroad on the adaptation of

technology and innovations appropriate for the needs of the Nigerian

petroleum industry;

(f) use existing human resources development facilities inNigeriafor purposes

of expanding manpower development programme in the petroleum

industry;

(g) where applicable, support skill acquisition programmes aimed at enhancing

employment in the petroleum industry inNigeria;

(h) periodically compute, evaluate and update the basic needs ofNigeria’s

petroleum industry in terms of skills, expertise and know-how;

(i) enhance and develop infrastructure in tertiary institutions that provide

courses of study relevant to the petroleum industry;

(j) make available suitable books and training equipment in the Nigerian

tertiary institutions;

(k) sponsor visits to oilfields, refineries and petrochemical plants for the

purpose of training;

(l) arrange attachments of trainees and other personnel to establishments

connected with the development of the petroleum industry;

(m) sponsor or finance participation of Nigerians in petroleum related seminars,

workshops and conferences within or outsideNigeria; and 49

(n) engage in any other activity incidental to the Development Fund’s mandate

as may be approved from time to time by the Board.

77. Establishment of the Board

(1) There shall be for the Development Fund a Board(in this Act referred to as “the

Board”).

(2) The Board shall consist of—

(a) the Minister who shall be the chairman.

(b) one representative of the Federal Ministry of Finance not below the rank of

a director;

(d) one representative from the Nigerian Content Development and Monitoring

Board;

(e) the Executive Secretary of the Development Fund;

(f) the Principal, Petroleum Training Institute;

(g) a representative of the Society of Petroleum Engineers;

(h) a representative of the Nigerian Society of Engineers; and

(i) six persons to be appointed by the President from the six geopolitical zones

on the recommendation of the Minister who shall possess a minimum of

fifteen years professional experience in the Nigerian petroleum industry

five years of which shall be at senior management level.

(3) The persons appointed pursuant to subsection (2)(i) of this section shall hold

office for a term of four years in the first instance which may be renewed for

another term of four years only, on such terms and conditions as may be

specified in the letter of appointment.

(4) Members of the Board referred to in subsection (2)(i) of this section shall be on

part-time basis.

(5) The proceedings of the Board of the Development Fund and other ancillary

matters shall be in accordance with provisions of Second Schedule to this Act.

(6) The conflict of interest provisions contained in the Second Schedule to this Act

shall apply to all members of the Board. 50

78. Functions of the Board

The Board shall:

(a) provide general guidelines relating to the functions of the Development Fund;

(b) approve the annual programme of action for the Development Fund;

(d) approve the appointment, promotion and discipline of staff of the Development

Fund;

(e) provide annual reports on its activities and progress to the Minister for

presentation to the President; and

(f) do such other things as are necessary, expedient, and in conformity with the

provisions of this Act for the efficient performance of and in connection with all

or any of the functions of the Board under this Act.

79. Remuneration of members of the Board

Members of the Board shall be paid from the funds of the Development Fund such

remuneration and allowances as the Board may determine, in accordance with the

guidelines issued from time to time by the Government.

80. Disqualification

A person shall not be appointed as a member of the Board unless the person –

(a) is a Nigerian citizen;

(b) has not, in terms of the laws in force in any country:

(i) been adjudged or declared bankrupt or insolvent; or

(ii) made an assignment to, or arrangement or composition with his creditors

which has not been rescinded or set aside;

(iii) been declared to be of unsound mind;

(iv) been convicted of an offence involving fraud or dishonesty; or

(v) been disqualified by a competent authority from carrying out any

assignment, responsibility or function in his professional capacity. 51

81. Removal of a member of the Board

(1) A Member of the Board may be suspended or removed from office by the

President if the member –

(a) is found to have been unqualified for appointment as a member of the

Board after his appointment;

(b) has demonstrated inability to effectively perform the duties of his office;

consent of the Chairman except for good reason shown for such absence;

(d) commits an act of serious misconduct;

(e) in the case of a person possessed of professional qualifications, is

disqualified or suspended from practicing his profession in any part of the

world by an order of a competent authority; or

(f) is in a breach of the conflict of interest rules set out in the Fourth Schedule

to this Act.

82. Resignation of a member of the Board

A member of the Board may resign his office by giving three months written notice

addressed to the President through the Minister.

83. Vacancy on the Board

(1) A vacancy on the Board shall occur if a member of the Board—

(a) dies;

(b) is removed from office in accordance with section 81 of this Act; or

(d) completes his tenure of office.

(2) A vacancy on the Board shall be filled by the appointment of another person to

the vacant office by the President in accordance with section 77 of this Act, as

soon as is reasonably practicable after the occurrence of such vacancy.

84. The Executive Secretary

(1) There shall be for the Development Fund an Executive Secretary appointed by

the President on the recommendation of the Minister. 52

(2) The Executive Secretary shall be a person with vast knowledge and cognate

professional experience in management and selected through a transparent

merit-based recruitment process.

(3) The Executive Secretary shall be the chief executive and accounting officer of

the Development Fund and shall be responsible for the day-to-day administration

of the affairs of the Development Fund subject to the direction of the Board.

85. Tenure, remuneration and conditions of service of the Executive

Secretary

(1) The Executive Secretary shall serve for a term of four years from the date of his

appointment at the expiration of which the President may renew his term for a

further term of four years and no more and on such terms and conditions as may

be specified in the letter of appointment.

(2) The remuneration and conditions of service of the Executive Secretary shall be

at a level sufficient to attract qualified professionals within the petroleum industry.

86. Disqualification

A person shall not be appointed as Executive Secretary of the Development

Fund unless the person –

(a) is a Nigerian citizen;

(b) has not been adjudged or declared bankrupt or insolvent;

his creditors which has not been rescinded or set aside;

(d) has not been declared to be of unsound mind;

(e) has not been convicted of an offence involving fraud or dishonesty;

(f) has not been disqualified by a competent authority from carrying out any

assignment, responsibility or function in his professional capacity in any part

of the world;

87. Removal of the Executive Secretary from office

The President may remove the Executive Secretary from office if –

(a) he commits an act of serious misconduct in relation to his duties as

Executive Secretary;

(b) he has demonstrated inability to effectively perform the duties of the office;

or53

or the public that the Executive Secretary should continue in office.

88. Other staff

(1) The Board may appoint such other persons as employees of the Development

Fund as it deems necessary.

(2) The employment of staff of the Development Fund shall be subject to

such terms and conditions as may from time to time be stipulated by the

Board and contained in the respective staff’s employment contracts.

(3) The Board of the Development Fund shall make staff regulations generally

relating to the conditions of service of its employees, and in particular, but

without prejudice to the generality of the foregoing, such regulations may

provide for –

(a) the appointment, promotion, dismissal and discipline of employees;

and

(b) appeals by the employees against dismissal or other disciplinary

measures; and

employees;

(4) Staff of the Development Fund shall be public officers as defined in the

Constitution.

(5) For the purpose of this section, appointment shall include secondment, transfer

and contract appointments

89. Remuneration

(1) The Board of the Development Fund shall develop and implement appropriate

conditions of service for its staff with particular regard to the issues of

remuneration, pension scheme and other service benefits, sufficient for the

Development Fund to attract and retain highly qualified manpower.

(2) The Board shall determine and review from time to time, the remuneration and

allowances, payable to the staff of the Development Fund in accordance with

guidelines prescribed by Government from time to time.

90. Pensions

(1) Employment in the Development Fund shall be subject to the provisions of the

Pensions Reform Act and officers and employees of the Development Fund shall 54

be entitled to pension and other retirement benefits as prescribed under the

Pension Reform Act.

(2) Subsection (1) of this section shall not prohibit the Development Fund from

appointing a person to any office on terms that preclude the grant of a pension or

other retirement benefits in respect of that office.

91. Financial provisions

(1) The Development Fund shall not later than 30th September or such other date to

be determined by the Minister in each financial year, prepare and present to the

National Assembly for appropriation, a statement of estimated income and

expenditure for the following financial year.

(2) Notwithstanding the provisions of subsection (1) of this section, the Development

Fund may also, in any financial year, submit supplementary or adjusted

statements of estimated income and expenditure to the National Assembly for

appropriation.

(3) The financial year of the Development Fund shall be a period of twelve calendar

months commencing on the 1st of January in each year.

92. Power to accept gifts

(1) The Development Fund may accept gifts of money or other property upon such

terms and conditions as may be specified by the person or organisation making

the gift provided such gifts are not inconsistent with the objectives and functions

of the Development Fund under this Act.

(2) Nothing in subsection (1) of this section or in this Act shall be construed so as to

allow any member of the Board or staff of the Development Fund to accept gifts

for their personal use.

93. Accounts and audit

The Development Fund shall keep proper accounts of its income and expenditure in

respect of each financial year and shall cause its accounts to be audited within six

months after the end of each year by auditors appointed by the Development Fund

from a list and in accordance with the guidelines supplied by the Auditor-General for

the Federation.

94. Mid-year and annual reports

(1) The Board shall submit to the Minister a mid-year report of its operations and

finances not later than 31st August of each year and an annual report of its

operations, performance and audited financial report of the preceding year not

later than 31st May of the following year. 55

(2) A summary of the annual report and audited financial report of the Development

Fund for the previous year shall be published on the website of the Development

Fund for public notice not later than 31st of July of each year.

95. Exemption from income tax

(1) All income derived by the Development Fund from the sources specified in

section 74 of this Act shall be exempt from income tax and all contributions to the

Development Fund made by persons subject to the payment of tax shall be tax

deductible.

(2) The Development Fund may, subject to the approval of the Board and the

conditions of any trust created in respect of any property, invest all or any of its

funds in any security prescribed by the Trustees Investment Act subject to the

approval of the Minister, or in such other securities as the Minister may approve.

96. Legal proceedings

(1) Subject to the provisions of this Act, the provisions of the Public Officers

Protection Act shall apply in relation to any suit instituted against the

Development Fund, the Executive Secretary, a member of the Board, an officer

or employee of the Development Fund.

(2) No suit shall lie against the Development Fund, a member of the Board, the

Executive Secretary or any other officer or employee of the Development Fund

for any act done in pursuance or execution of this Act or any other law or

enactment, or of any public duty or authority in respect of any alleged neglect or

default in the execution of this Act or any other law or enactment, duty or

authority, or be instituted in any court unless it is commenced—

(a) within three months next after the act, neglect or default complained of ; or

(b) in the case of a continuation of damage or injury, within six months next

after the ceasing of the act complained of.

(3) No suit shall be commenced against the Development Fund, a member of the

Board, the Executive Secretary or any officer or employee of the Development

Fund before the expiration of a period of one month after written notice of the

intention to commence the suit shall have been served on the Development Fund

by the intending plaintiff or his agent.

(4) The notice referred to in subsection (3) of this section shall clearly and explicitly

state the cause of action, the particulars of the claim, the name and address of

the intending plaintiff and the relief which he claims. 56

97. Service of court processes on the Development Fund

A notice, summons or other document required or authorised to be served on the

Development Fund under the provisions of this Act or any other law or enactment may

be served by delivering it to the office of the Executive Secretary of the Development

Fund or any of its Directors.

98. Restriction on execution against the Development Fund’s property

(1) In any action or suit against the Development Fund, no execution or attachment

of its physical property shall be issued and any judgment against the

Development Fund may be enforced through garnishee proceedings provided

that not less than three months notice of the intention to commence the

garnishee proceedings shall have been given to the Development Fund.

(2) Any sum of money which may by the judgment of any court be awarded against

the Development Fund shall, subject to any direction given by the court where no

notice of appeal against the judgment has been given, be paid by the Fund .

99. Indemnity

(1) Every member of the Board and every employee of the Development Fund shall

be indemnified out of the assets of the Development Fund against any liability

incurred in defending any proceeding against the Development Fund, whether

civil or criminal, if such proceedings are brought against the member of the

Board or employee in their official capacity.

(2) Notwithstanding the provisions of subsection (1) of this section, the Development

Fund shall not indemnify any member of the Board or employee of the

Development Fund for any liability incurred as a result of the wilful negligence of

the member or employee, as the case may be, or conduct or acts which such

person knew or should have known to be unlawful.

F. PETROLEUM EQUALISATION FUND

100. Establishment of the Petroleum Equalisation Fund

(1) There shall continue to be the Petroleum Equalisation Fund (“the Equalisation

Fund”) into which shall be paid:

(a) any net surplus revenue recovered from petroleum products marketing

companies pursuant to this Act; and

(b) such sums as may be provided for purpose of the Equalisation Fund by the

Federal Government. 57

(2) The Equalisation Fund is a body corporate with perpetual succession, a common

seal and which may sue and be sued in its corporate name.

(3) The Equalisation Fund shall have power to acquire, hold and dispose of property

and subject to this Act perform all acts that corporate bodies may perform by

law.

(4) Where the Government decides that petroleum product markets have been

effectively deregulated, the Minister shall take the required actions to ensure that

the Equalisation Fund ceases to exist and its assets and liabilities transferred

to the Government to be controlled and managed by the Ministry and at such

time the provisions of the sections of this Act relating to the Equalisation Fund

shall stand repealed.

101. Establishment of the Petroleum Equalisation Fund Management Board

(1) There shall be for the Equalisation Fund a Board to be known as the Petroleum

Equalisation Fund Management Board (in this Act referred to as “the Board”)

which shall manage the Equalisation Fund.

(2) The Board shall consist of –

(a) the Minister who shall be the chairman.

(b) a representative of the Ministry of Petroleum Resources;

(d) a representative of the Agency;

(e) a representative of National Association of Road Transport Owners;

(f) a representative of the Major Marketers Association of Nigeria;

(g) a representative of the Independent Petroleum Marketers Association of

Nigeria;

(h) a representative each of the Nigerian Labour Congress and the Trade

Union Congress ofNigeria;

(i) three other persons who shall be of high integrity and substantial

professional experience appointed by the President on the

recommendation of the Minister; and

(j) the Executive Secretary of the Equalisation Fund. 58

(3) Membership of the Board shall be on a part-time basis..

(4) The provisions of the Second. Schedule to this Act shall have effect with respect

to the proceeding of the Board and other matters contained therein.

102. Powers of the Board

The Board shall have power to –

(a) determine the method by which net surplus revenue shall be collected from

petroleum products marketing companies;

(b) recover the net surplus revenues from the sale of petroleum products from

petroleum products marketing companies, as may be prescribed by the Agency;

and

petroleum products and to that extent, inspect books and facilities, take

measurements, and inquire into the correctness of information provided in

support of claims for reimbursement.

103. Functions of the Board

The Board shall –

(a) receive any net surplus revenue recovered from petroleum products marketing

companies in accordance with the provision of section 102 of this Act;

(b) receive any such sums as may be provided for the purpose of the Equalisation

Fund by the Government;

petroleum products marketing companies suffering loss solely and exclusively as

a result of the sale by them of petroleum products at uniform benchmark prices

throughout the country, being benchmark prices set by the Agency pursuant to

this Act;

(d) make payment of all disbursements of the Equalisation Fund authorised under or

by virtue of this Act;

(e) account for all money collected, paid or otherwise expended in relation to the

Equalisation Fund and pursuant to the provisions of this Part;

(f) keep proper public accounts and records of transactions on the Equalisation

Fund;

(g) prepare in respect of each financial year a statement of accounts in such form as

the Minister may direct; 59

(h) ensure the proper administration of the Equalisation Fund in accordance with the

provisions of this Part;

(i) make rules and regulations for carrying out the functions of the Equalisation

Fund; and

(j) do such other things as are necessary, expedient, legal, and in conformity with

the provisions of this Act for the efficient performance of and in connection with

all or any of the functions of the Board as specified under this Part.

104. Utilisation of the Equalisation Fund

The Equalisation Fund shall be utilized for:

(a) the proper administration of the Equalisation Fund;

(b) the reimbursement of petroleum products marketing companies for any loss

sustained by them solely and exclusively as a result of sales by them of

petroleum products at uniform prices throughoutNigeria, being benchmark prices

set by the Equalisation Fund; and

105. Executive Secretary

(1) There shall be for the Equalisation Fund an Executive Secretary, appointed by

the President on the recommendation of the Minister.

(2) The Executive Secretary shall be a person with vast knowledge and cognate

professional experience in management and selected through a transparent

merit-based recruitment process. The Executive Secretary shall be the chief

executive and accounting officer of the Board and shall be responsible for

running the day-to-day administration of the Equalisation Fund under the

direction of the Board.

106. Responsibilities of the Executive Secretary

The Executive Secretary shall –

(a) determine the net surplus revenue recoverable from any petroleum products

marketing company and accruing to such company from the sale by the

company of petroleum products at such prices, as may be sold in accordance

with the methodology established by the Agency;

(b) determine the amount of reimbursement due to any petroleum products

marketing company which has suffered loss as a result of the operation of any

enactment or law;

(d) account for all monies collected, paid or otherwise expended under this Act and

publish same in the way and manner prescribed by the Board in consultation with

the Agency; and

(e) carry out such other functions as may, from time to time, be specified by the

Board.

107. Other officers of the Board

The Board may, on the advice of the Executive Secretary, appoint as employees of

the Equalisation Fund such number of persons as may be necessary for the

administration of the Equalisation Fund, who shall be subject to the general control of

the Executive Secretary and perform such duties as the Executive Secretary may

direct.

108. Collection of net surplus revenue

(1) Net surplus revenue due and payable by petroleum products marketing

companies shall be payable to the Equalisation Fund in accordance with

directives issued by the Board from time to time,

(2) The Equalisation Fund shall have no obligation to issue a demand notice in

respect of the outstanding net surplus revenue and the failure to issue a demand

notice shall not constitute a defence for non-payment of outstanding sums.

109. Bridging and equalisation allowances

Nothing in section 103 of this Act shall derogate from the right of any petroleum

products marketing company maintaining storage facilities to collect bridging and

equalization allowances prior to the release of petroleum products to petroleum

products marketing companies and to remit same to the Board in accordance with

such directives as may be issued by the Board.

110. Claims by petroleum products marketing companies

(1) Petroleum products marketing companies may, as necessary, bring claims for

the recovery of losses sustained under paragraph (b) of section 106 of this Act in

the manner prescribed by the Board.

(2) Where a company brings a claim under sub-section (1) of this section, the Board

shall with the written request of the Executive Secretary, and with or without

notice, have the right to enter upon, inspect and inquire about any activity

relating to the movement or storage of petroleum products and to that event, to

inspect books and facilities, take measurements, and inquire into the correctness

of information provided in support of claims for reimbursement.

(3) The Board shall have the power to- 61

(a) demand details of production, supplies, loading and dispatches from

refining companies, import terminals and storage facilities; and

(b) gain unimpeded access to information relating to petroleum product

imports, refining and sales collated and maintained by any government

agency, including third party monitoring agencies, with authority to monitor

or inspect petroleum products.

(4) The power provided under subsection (3) of this section is limited to refining

facilities, reception terminals, storage facilities and retail outlets.

(5) Decisions as to payment of claims shall be made by the Board within thirty days

from the date on which the claim was first made and where the claim is

successful, payments shall be made within ten working days from the date of the

decision.

(6) Where a claim is successful and the Board fails to pay the claim to the company

in accordance with the terms and conditions of this section, the Board shall pay a

penalty to be prescribed by the Minister.

111. Calculation of surplus revenue recoverable

The net surplus revenue recoverable from a petroleum products marketing company

under this Act shall be calculated by reference to the volume of the affected products

sold on zonal basis and to the amount by which the uniform prices at which the

products were sold exceeded, or were less than, the prices of those products

prevailing immediately before the fixing of the uniform prices of the products.

112. Prescribed dates for payment and penalty for non-payment

(1) The Board shall by notice served on the petroleum products marketing company

concerned, specify the date on which any surplus revenue due from that

petroleum products marketing company shall be paid to the Board.

(2) If any sum is not paid within twenty-one days of the specified date, a sum equal

to ten per centum of the amount unpaid shall be added for each month or part of

a month after the date on which payment should have been made.

(3) The Board may for just cause, waive in whole or in part any penalty imposed

under this section.

(4) Where the Board waives a penalty under the provisions of subsection (3) of this

section, the Board shall give its reasons in writing.

113. Certificate as evidence 62

A copy of an entry in the accounts of the Board or other extract from the records of

the Board shall, when certified by the Executive Secretary, be received in all courts

as prima facie evidence of the truth of the contents thereof and as the case may be,

of the debt to the Board by any petroleum products marketing company.

114. Reporting obligations

(1) All petroleum product importers, including the National Oil Company, and

petroleum products marketing companies shall, prior to but not later than twentyone days following each importation, report details of all petroleum products

imported intoNigeriato the Equalisation Fund, and the reports shall include

quantities, date of delivery and place of discharge.

(2) All licensed petroleum product storage facilities, including storage facilities

belonging to the National Oil Company, shall on a monthly basis, deliver to the

Board:

(a) logs of product movements into and out of the facilities; and

(b) returns of bridging and equalization allowances collected from petroleum

products marketing companies and remitted to the Board.

(3) Marketing companies shall deliver quarterly statements of all petroleum products

lifted and discharged, including details of load and discharge points, dates and

times of loading and discharge to the Board.

(4) The Executive Secretary may, with the approval of the Board –

(a) require any petroleum products marketing company to furnish returns and

keep records or any other relevant information as may be determined to be

necessary for the proper administration of the provisions of this Act; and

(b) produce the records for examination by the Executive Secretary or any

authorized officer of the Board necessary for the proper administration of

the provisions of this Part.

115. Dispute resolution

(1) Disputes between a company and the Equalisation Fund in respect of any matter

under this Part shall be referred to the Agency and shall be subject to the dispute

resolution mechanism referred to in subsection (2) of this section.

(2) Where the Equalisation Fund is a party to a dispute under this Part, the relevant

provisions of the Arbitration and Conciliation Act, shall apply.

G. PETROLEUM HOST COMMUNITIES FUND 63

116. Establishment of the Petroleum Host Community Fund

There is established a fund to be known as the Petroleum Host Communities Fund (in

this Act referred to as ‘the PHC Fund’).

117. Purpose of the PHC Fund

The PHC Fund shall be utilized for the development of the economic and social

infrastructure of the communities within the petroleum producing area.

118. Beneficial entitlements to the communities

(1) Every upstream petroleum producing company shall remit on a monthly basis ten

percent of its net profit as follows -.

(a) for profit derived from upstream petroleum operations in onshore areas and

in the offshore and shallow water areas, all of such remittance shall be

made directly into the PHC Fund; and

(b) for profit derived from upstream petroleum operations in deepwater areas,

all of the remittance directly in to the Fund for the benefit of the petroleuml

producing littoral States.

(2) For the purpose of this section ‘net profit’ means the adjusted profit less royalty,

allowable deductions and allowances, less Nigerian Hydrocarbon Tax less

Companies Income Tax.

(3) At the end of each fiscal year, each upstream petroleum company shall reconcile

its remittance pursuant to subsection (1) of this section with its actual filed tax

return to the Service and settle any such difference.

(4) The contributions made by each upstream petroleum company pursuant to

subsection (1) of this section, will constitute an immediate credit to its total fiscal

rent obligations as defined in this Act.

(5) Where an act of vandalism, sabotage or other civil unrest occurs that causes

damage to any petroleum facilities within a host community , the cost of repair of

such facility shall be paid from PHC Fund entitlement unless it is established that

no member of the community is responsible. .

(6) The Minister shall, subject to the provisions of section 8 of this Act, make

regulations on entitlement, governance and management structure with respect

to the PHC Fund established under this Act.

H. NATIONAL PETROLEUM ASSETS MANAGEMENT CORPORATION

120. Establishment of the National Petroleum Assets Management

Corporation

(1) There is established under this Act the National Petroleum Assets Management

Corporation (“the Corporation”), as a body corporate with perpetual succession,

a common seal and which may sue or be sued in its corporate name.

(2) The Corporation shall be a holding company operating fully on commercial

principles.

(3) The Corporation shall have power to-

(a) enter into contracts and incur obligations;

(b) acquire, hold, mortgage, purchase and deal howsoever with property,

whether movable or immovable, real or personal;

Corporation may determine; and

(d) do all such things as are necessary for or incidental to the carrying out of its

functions and duties under this Act.

(4) Subject to the provisions of this Act, the functions of the Corporation are to –

(a) acquire and manage investments of the Government in the Nigerian

upstream petroleum industry; and

(b) undertake such other activities as are necessary or expedient for giving full

effect to the performance of its functions under this Act.

121. Funding

(1) The Corporation shall maintain a fund (‘the Fund’) into which shall be paid –

(a) such sums as may be made available by the Government for the purpose of

funding the subsidiaries of the Corporation established pursuant to the

provisions of subsection (3) of section 120 of this Act; and

(b) such monies as may be received by the Corporation in the course of its

operations or in the exercise of its functions under this Act

122. Utilization of the Fund of the Corporation

The Corporation shall utilize the proceeds of the Fund established under section 121

of this Act for –

(a) funding the first two years work programme of its subsidiary to be established

pursuant to this Act; and65

(b) defraying all expenses incurred by the Corporation.

123. Incorporation of Nigerian Petroleum Assets Management Company

Limited

(1) The Minister shall not later than three months after the Effective Date take such

steps as are necessary under the Companies and Allied Matters Act to

incorporate a company limited by shares which may be known as Nigerian

Petroleum Assets Management Company Limited (‘the Management Company’)

or such other name as shall be available, and be vested with certain assets and

liabilities of NNPC.

(2) At the time of its incorporation, the initial shares of the Management Company to

be established shall be held in the ratio of 99% by the Corporation and 1% by the

Permanent Secretary of the Ministry in trust for the Corporation.

124. Exemption from certain existing laws

The Management Company to be established shall not be subject to the provisions of

the Fiscal Responsibility Act, 2007 and the Public Procurement Act, 2007.

125. Transfer of Assets and Liabilities

(1) Following the incorporation of the Management Company the assets and

liabilities comprising exclusively the interests in all the unincorporated joint

ventures held by NNPC on behalf of the Government and excluding any asset

that the Government may have vested in the National Oil Company shall be

vested in the Management Company within twelve to twenty-four months from

the Effective Date.

(2) The Government may thereafter vest in the Management Company any

upstream asset as the Government may from time to time deem fit.

(3) The transfer of liability or obligation under this section without any further

assurance other than this section releases NNPC from any further liability or

obligation in respect of the assets or liabilities.

(4) The Management Company shall without further assurance be entitled to enforce

or defend all obligations for or against NNPC in respect of the portion of interests

mentioned in subsection (1) of this section as if the Management Company were

the original party to such obligations.

(5) The relevant transferred assets, all bonds, loans, financing agreements,

alternative financing agreements, joint operating agreements, sole risk

agreements, hypothecations, securities, deeds, contracts, instruments,

documents and working arrangements subsisting immediately before the initial

transfer date and to which NNPC was a party shall, on and after the initial date,

be as fully effective and enforceable against or in favour of the Management 66

Company as if, instead of NNPC, the Management Company had been named

therein.

(6) Any pending action or proceeding in relation to the transferred assets, brought

by or against NNPC immediately before the initial transfer date may be enforced

or continued, as the case may be, on and after that date by or against the

Management Company in the same way as if this Act had not been passed.

(7) Notwithstanding the provision of subsection (3) of this section

(a) no action or other proceeding shall be commenced against the

Management Company in respect of any employee, asset, liability, right or

obligation if, had there been no transfer, the time for commencing the action

or other proceeding would have expired; and

(b) the transfer of assets and liabilities to the Management Company under

subsection (2) of this section shall not be deemed to –

(i) constitute a breach, termination, repudiation or frustration of any

contract, including a contract of employment or insurance;

(ii) constitute a breach of any Act, regulation or by-law;

(iii) constitute an event of default or force majeure;

(iv) give rise to a breach, termination, repudiation or frustration of any

licence, permit or other right;

(v) give rise to any right to terminate or repudiate a contract, licence,

permit or other right; or

(vi) give rise to any estoppel.

(8) Subsection (7) of this section shall not apply to such contracts as may be

prescribed by any regulation made for that purpose..

(9) Subject to subsection (8) of this section, nothing in this Act and nothing done as

a result of a transfer under subsection (2) of this section shall create any new

cause of action in favour of a –

(i) holder of a debt instrument issued by NNPC before the transfer date; or

(ii) party to a contract with NNPC that was entered into before the transfer

date.

(10) Any guarantee or surety which was given or made by the Government or any

other person in respect of any debt or obligation of NNPC, and which was 67

effective immediately before the initial transfer of the principal debt or obligation,

shall remain fully effective against the guarantor or surety on and after the initial

transfer date in relation to the repayment of the debt or the performance of the

obligation, as the case may be, by the Management Company to which the

principal debt or obligation was transferred.

126. Exemption from Stamp Duty

(1) Stamp duty shall not be chargeable under the Stamp Duties Act in respect of any

transfer made or transaction entered into pursuant to this Part on which, except

for the exemption granted under this section, stamp duty would have been

payable.

(2) Stamp duty shall not be chargeable –

(a) during the incorporation of any subsidiary of the Management Company

and or any subsequent increase to their authorised share capital of any

such subsidiary prior to the transfer of a majority interest there to the public

or private investors; or

(b) in respect of any other transfer of rights and assets pursuant to this Part.

127. Transfer of employees of NNPC

The transfer of employees of NNPC to the Management Company shall be in

accordance with the provisions of section 358 of this Act.

128. Directions to NNPC on matters related to transition

Prior to the vesting of assets and liabilities of NNPC in the Management Company,

the Minister may give the Board of Directors of NNPC directions in writing to ensure

the proper transfer of the assets and liabilities of NNPC to the Management

Company, and the Board of Directors shall, without delay, comply with every such

direction.

129. Certain exemption from rates

(1) Oil pipelines and other installations transferred to the Management Company

shall not be regarded as hereditaments or tenements to be valued for rating

purposes.

(2) For the purpose of this subsection, the expression “oil pipelines and other

installations” include oil rigs, refineries, power generating plants, pumping

stations, tank farms and similar installations but shall not include office or

residential buildings.

(3) Except as provided in subsection (1) of this section, nothing in this Act shall

be deemed to exempt the Management Company from liability for any tax, 68

duty, rate, levy or other charge whatsoever, whether general or local; provided

that the Management Company shall not be liable to pay any such tax, duty,

rate, levy or charge unless every company liable to tax under the Part VIII of

this Act is also liable for such payment.

130. Borrowing Powers

(1) Subject to the provisions of this section, the Corporation may, from time to

time, borrow by way of overdraft or by any other means such sums of monies

as it may require in the exercise of its functions under this Act.

(2) The Corporation shall not without the approval of the President, borrow any

sum of money whereby the amount in aggregate outstanding on any loan or

loans at any time exceeds such amount as is for the time being approved by

the President.

(3) Notwithstanding the provisions of subsection (2) of this section, a person

lending to the Corporation shall not be bound to enquire whether the

borrowing is within the power of the Corporation or not.

(4) Where any sum of money required to be borrowed by the Corporation –

(a) is to be in a currency other than Naira; and

(b) is to be borrowed by the Corporation other than temporarily, the

Corporation shall not borrow such sum without the approval of the

President.

(5) Subsection (4) of this section, shall not apply to any money borrowed by the

Corporation from any of its subsidiaries or by a subsidiary of the Corporation

from the Corporation or any other subsidiary.

131. Establishment of the Board

(1) There is established for the Corporation, a Board of Directors (in this Part

referred to as “the Board”).

(2) The Board shall comprise of—

(a) the Minister of Petroleum, who shall be the chairman;

(b) the Permanent Secretary, Federal Ministry of Finance;

company to be established by the Corporation pursuant to this Part; 69

(d) two persons to be appointed by the President, who shall be persons of

high integrity, substantial corporate experience and professional

accomplishment from the private sector.

(3) The persons appointed pursuant to paragraph d) of subsection (2) of this

section shall hold office for a term of four years in the first instance which term

may be renewed for another term of four years only, on such terms and

conditions as may be specified in the letter of appointment.

(4) The proceedings of the Board of the Corporation and other ancillary matters

shall be as provided in the Second Schedule to this Act.

(5) The conflict of interest provisions contained in the Second Schedule to this Act

shall apply to all members of the Board.

132. Functions and powers of the Board

The Board shall:

(a) provide general guidelines on the functions of the Corporation;

(b) approve the annual programme of action and budget for the Corporation;

(d) do such other things as are necessary, expedient, and in conformity with the

provisions of this Act for the efficient performance of and in connection with all

or any of the functions of the Board under this Act.

133. Remuneration of members of the Board

Members of the Board shall be paid from the funds of the Corporation such

remuneration and allowances in accordance with the guidelines of the Government.

134. Disqualification

(1) No person shall be appointed as a member of the Board unless the person –

(a) is a Nigerian citizen;

(b) has not, in terms of the laws in force in any country:

(i) been adjudged or declared bankrupt or insolvent; or

(ii) made an assignment to, or arrangement or composition with his

creditors which has not been rescinded or set aside;

(iii) been declared to be of unsound mind;70

(iv) been convicted of an offence involving fraud or dishonesty;or

(v) been disqualified by a competent authority from carrying out any

assignment, responsibility or function in his professional capacity

in any part of the world.

135. Removal of a member of the Board

(1) A member of the Board may be suspended or removed from office by the

President if the member –

(a) is found to have been unqualified for appointment as a member of the

Board after his appointment;

(b) has demonstrated inability to effectively perform the duties of his

office;

the consent of the Chairman except for good cause shown for such

absence;

(d) commits an act of serious misconduct;

(e) in the case of a person possessed of professional qualifications, he is

disqualified or suspended from practicing his profession in any part of

the world by an order of a competent authority; or

(f) is in a breach of the conflict of interest rules set out in the Second

Schedule to this Act.

136. Resignation of a member of the Board

A member of the Board may resign his office by giving three months written notice

addressed to the President through the Minister.

137. Vacancy on the Board

(1) A vacancy on the Board shall occur if a member of the Board—

(a) dies;

(b) is removed from office in accordance with section 159 of this Act; or

(d) completes his tenure of office. 71

(2) A vacancy on the Board shall be filled by the appointment of another person

to the vacant office by the President in accordance with the provision of

section 131 of this Act, as soon as is reasonably practicable after the

occurrence of such vacancy.

138. Administrative support by Management Company

The Management Company, to be established as a subsidiary of the Corporation,

shall provide full administrative support for the work of the Board of the Corporation.

139. Power to accept gifts

(1) The Corporation may accept gifts of money or other property upon such terms

and conditions as may be specified by the person or organisation making the

gift provided such gifts are not inconsistent with the objectives and functions

of the Corporation under this Act.

(2) Nothing in subsection (1) of this section or in this Act shall be construed to

allow any member of the Board or staff of the Corporation to accept gifts for

their personal use.

140. Accounts and audit

The Corporation shall keep proper accounts of its income and expenditure in respect

of each financial year and shall cause its accounts to be audited within six months

after the end of each year in accordance with International Financial Reporting

Standards consistent with guidelines supplied and auditors approved by the AuditorGeneral of the Federation. .

141. Mid-year and annual reports

(1) The Corporation shall submit to the Minister, a mid-year report of its

operations and finances not later than 31st August of each year and an annual

report of its operations, performance and audited financial report of the

preceding year not later than 31st May of the following year.

(2) A summary of the annual report and audited financial report of the Corporation

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

Published

1 month ago

October 2, 2024

Ozuem Udoka Joy

In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.

The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.

The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.

These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.

The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.

This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.

These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.

The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.

Business

Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

Published

1 month ago

October 2, 2024

yemi adeoye

By Yemie Adeoye

NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.

The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.

“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”

The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.

“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.

Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.

Oil

ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

Published

1 month ago

September 26, 2024

Ozuem Udoka Joy

As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.

Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”

This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.

Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.

We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.

“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.

On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.

Biztellers

The Petroleum and Industry Bill 2012 (Part ii)

Oil

The Petroleum and Industry Bill 2012 (Part ii)

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Oil

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

Business

Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

Oil

ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

Why LCCI Considers DIL A Pillar Of Strength For Nigeria’s Industrial Growth

Increased Crude Oil production: NCDMB Advocates Annual FID Week

AMCON Not In Dispute With Heyden Petroleum

Obama Congratulates Trump, Applauds Extraordinary Harris

Yul Edochie Lashes Out At Critics Over His Personal Life On Social Media

Ruger Criticises Nigerian Music Industry

OSSG Raises Alarm Over Murder Plot By APC Chieftain

NCC, SMEDAN, NAICOM, SEC, Others Set for SUPERNEWS SMEs Conf June 13

Sahara’s Tonye Cole resigns from GPHCDA

Oando opens ultra-modern petrol station in Lagos

Niger Delta Avengers: President Buhari Reads riot Act …considers the carrot and stick option

Adeosun: We are investing in infrastructure to grow the private sector

Biztellers

The Petroleum and Industry Bill 2012 (Part ii)

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Leave a Reply

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Oil

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

Business

Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

Oil

ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

Why LCCI Considers DIL A Pillar Of Strength For Nigeria’s Industrial Growth

Increased Crude Oil production: NCDMB Advocates Annual FID Week

AMCON Not In Dispute With Heyden Petroleum

Obama Congratulates Trump, Applauds Extraordinary Harris

Yul Edochie Lashes Out At Critics Over His Personal Life On Social Media

Ruger Criticises Nigerian Music Industry

OSSG Raises Alarm Over Murder Plot By APC Chieftain

NCC, SMEDAN, NAICOM, SEC, Others Set for SUPERNEWS SMEs Conf June 13

﻿Sahara’s Tonye Cole resigns from GPHCDA﻿﻿﻿

﻿Oando opens ultra-modern petrol station in Lagos

﻿﻿ Niger Delta Avengers: President Buhari Reads riot Act …considers the carrot and stick option

﻿ Adeosun: We are investing in infrastructure to grow the private sector

Sahara’s Tonye Cole resigns from GPHCDA

Oando opens ultra-modern petrol station in Lagos

Niger Delta Avengers: President Buhari Reads riot Act …considers the carrot and stick option

Adeosun: We are investing in infrastructure to grow the private sector