The Senate Thursday threw its weight behind the Minister of Petroleum Resources,(State) Dr. Ibe Kachikwu’s decision to restructure the Nigeria National Petroleum Corporation(NNPC).
Senators said that they are satisfied with the measures taken by the minister to restructure the corporation especially when no law was breached in the process of carrying out the restructuring.
The lawmakers however scolded Kachikwu for his failure to consult the National Assembly before carrying out the controversial exercise.
Three standing committees of the Senate grilled Kachikwu on the motive behind the restructuring of the NNPC.
Senator Tayo Alasoadura, Chairman Senate Committee on Petroleum (Upstream) and Vice Chairman, Senate Committee on Petroleum (Downstream), Senator Jibrin Barau and Chairman, Senate Committee on Gas, Senator Bassey Albert Akpan, conducted the session which later moved into a closed session.
Alasoadura told reporters after the closed session that they are satisfied with the measures taken by the minister aimed at making units of the NNPC more functional.
The Ondo Central lawmaker added that Kachikwu did not breach any law in carrying out the restructuring,
Senate Chief Whip, Senator Olusola Adeyeye (Osun central) who led the question-and-answer session noted that the Act that established the NNPC especially cap1, 23© 1d gave the NNPC management free hand to operate as an entity.
Adeyeye said that the Act however did not give them the power to create autonomous firms that would be independent of the NNPC.
He also said that the Act clearly stated that the affairs of the NNPC must be conducted by a board.
A member of the committee, Senator, Chukwuka Utazi (Enugu North), urged the minister to go head with far reaching restructuring of the NNPC.
Senator Utazi who insisted that change in the NNPC was long over due, said the Minister should not mind vested interests in the oil and gas sectors who were working to compromise necessary changes in the NNPC.
Utazi said, “Mr. Minister, you must understand the sort of resistance that would come when you want to change things. But you must continue doing what you are doing. Don’t be deterred; don’t be tired of the reforms you are carrying out. We understand what you are doing. Just go on with what you are doing we are behind you.”
Another member of the Committee, Senator Biodun Olujimi, said that government must have human face in its actions.
Olujimi said that there was no doubt that the minister by his action has effectively pre-empted the passage of the Petroleum Industry Bill (PIB).
She wondered why the restructuring was conducted without recourse to the National Assembly.
Senator Emmanuel Paulker in his contribution said that the minister should have carried unions in the industry along.
Paulker noted that if the NNPC was shut down for any reason, the economy of the country would be adversely affected.
He said that there was no reason for the minister not to have consulted the National Assembly before carrying out the measures.
Senator Stella Oduah, (Anambra North) wondered why such huge restructuring of the NNPC would be carried out without the knowledge of the National Assembly.
She also underscored the issue of aging equipment in the oil and gas industry.
Kachikwu insisted that what his ministry did was not unbundling, but restructuring.
He also said that it is not true that the exercise was carried out without the approval of a board and the Federal Executive Council, as stated in the Act.
He said that the approval process began long age.
The minister said that the real chairman of the NNPC Board is the Minister of Petroleum.
He said that with the measures taken by the ministry, there will slightly be less control from the head office.
He noted that other than aging equipment, the refineries, for instance, have not been given the independence they required to operate.
“He said, “You cannot bring in loanable funds into the refineries because for you to bring loanable funds you have to have the cash flow to fund the loan.”
The minister said that there is already a committee of staff and management in the NNPC looking at the measures being taken by the ministry.
The NNPC Act Part 1, states in part that:
“It shall be the duty of the Corporation, from time to time, when the National Council of Ministers so requires or the Corporation considers it appropriate to undertake a general review of the affairs of the Corporation and of any subsidiaries thereof for the purpose of determining how the management of the activities of the Corporation or any subsidiary thereof can most efficiently be organised and, where appropriate, to make a report to the National Council of Ministers upon the Corporation’s conclusions arising from the review.
6.(1)The Corporation shall have powers to do anything which in its opinion is calculated to facilitate the carrying out of its duties under this Act including, without limiting the generality of the following, the power –
(a)to hold, manage and alienate movable and immovable property;
(b)to purchase or otherwise acquire or take over all or any of the assets, businesses, properties, privileges, contracts, rights, obligations and liabilities of any other company, firm or person in furtherance of any business engaged in by the Corporation;
(c)to enter into contracts or partnerships with any company, firm or person which in the opinion of the Corporation will facilitate the discharge of the said duties under this Act;
(d)to establish and maintain subsidiaries for the discharge of such functions as the Corporation may determine; and
(e) to train managerial, technical and such other staff for the purpose of the running of its operations and for the petroleum industry in general.(2) Notwithstanding subsection (1) of this section, any contract relating to any project of a value of more than N5,000,000 (or such higher limit as may be directed from time to time by the National Council of Ministers) shall be referred by the Corporation to the National Council of Ministers for approval before the award of any such contract is made by the Corporation.