Wednesday, December 02, 2009              

NNPC lists objectives in industry reform, proposes new legislation for extractive industries
By Taiwo Hassan

THE Nigerian National Petroleum Corporation (NNPC) has listed four key areas of focus as the main objective for the ongoing reform in the nation's petroleum industry.

The areas include growth in oil reserves and managed expansion in production capacity; repositioning gas for rapid domestic, regional and export penetration; revitalising downstream capacity to support domestic energy needs and reforming key institutions to anchor sustained growth in the industry.

Stating this at the just concluded Nigerian Gas Association (NGA)'s 10th anniversary symposium in Abuja recently, the Group Managing Director, NNPC, Mohammed Sanusi Barkindo, said government is keen on reviving the oil and gas industry to make it more proactive and commercial purpose, adding that the industry reform would bring the desired result in the sector.

According to him, the Petroleum Industry Bill (PIB) was designed to create framework for separating policy, regulation, commercial and monitoring.

Enumerating the fundamental objectives of the PIB, Barkindo listed the following: Creation of transparent framework to ensure good governance; accountability and the promotion of sustainable development for Nigeria; support for international and local best practices with respect to environmental obligations; promotion of host community participation and development; support for Nigerian content initiative and indigenous participation.

Others are: Establishment of enabling environment for foreign direct investment; enhancement of government oil and gas revenues; and separation policy, regulatory and commercial activities.

Barkindo, who delivered a paper titled: "Strategies, issues and challenges associated with oil and gas sector reform," hinted that Nigeria's subscription to Extractive Industries Transparency Initiatives (EITI) required a significant review of provisions under current legislation to make them compliant with EITI commitments.

Commenting on the need to enhance petroleum activities through effective acreage management, the GMD stated that the following steps should be considered, vesting all unallocated acreages in National Petroleum Directorate (NPD) and transfers leases held by NNPC to NNPC Limited; creating new national grid system with 2x2 km parcels; Institute transparent license award process; and creates exploration and prospecting licenses and petroleum mining leases.