Federal Executive Council, FEC, has approved the national Petroleum Policy, NPP.
The decision was reached at the cabinet meeting presided by Acting President, Prof. Yemi Osinbajo, on Wednesday.
The Minister of
State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, addressing newsmen immediately after the meeting, said it is a
very comprehensive 100-page document that deals with the entire spectrum
in the industry.
The minister further reiterated that apart from the fluidity in
pricing and uncertainty in terms of the price regime in crude, the
Ministry of Petroleum Resources is pushing for a refining processing
environment and moving away from exporting to refining petroleum
products.
He said the National Petroleum Policy defines the strategy of the
Federal Government with respect to Nigeria’s oil resources. It
establishes the medium to long-term targets for oil reserves growth, and
utilization and record strategies to be pursued to ensure the
successful implementation of the policy in accordance with Nigeria’s
national socio-economic development priorities.
The policy articulates the vision of the Federal Government of
Nigeria for the petroleum (specifically oil) sector, sets goals and
strategies, promotes a level playing field between State
Owned-Enterprises and the private sector, proposes fundamental reforms
to improve the operational efficiency and performance of NNPC and
proposes a long-needed overhaul and modernization of the existing
petroleum industry legislation.
It is intended to remove the barriers affecting investment and
development of the sector. The policy will be reviewed and updated
periodically to ensure consistency in Government policy objectives at
all times.
The main aspects of the petroleum policy are:
1. Governance (Legal and Regulatory Framework)
a. Institutional Reforms
b. Regulatory Framework
c. Commercial Framework
d. Fiscal Framework
e. Sector Financing
f. PSC – Plus Cost Structures
2. Industry Structure
a. Clean Break from the Past
b. Establishment of a new National Oil Company of Nigeria (NOCN)
c. Restructuring of NNPC: Into autonomous business units
d. Gain more of the value from downstream export markets
e. Procurement for Projects: Fundamental overhaul to bring efficiency, transparency and cost control
f. Asset Management: Work existing assets much harder, professional and
modern asset management methods to be introduced, cost control methods
need to improve substantially
3. Upstream – Developing Resources
a. Maximising Production of Hydrocarbons within Nigeria
b. Maximise additions to reserves and future production
c. Diversify resource base, and identify low cost resources
d. Allocation of Oil Licences and Leases
e. Minimise Environmental Footprint: “Name and Shame” + “Polluter Pays”
f. Balance Petroleum Resources with Renewable Energy
4. Midstream Operations – Infrastructure (transportation and processing)
a. Develop Operating Oil Product Midstream Facilities
a. Refining: Strong refining sector a basic requirement of Petroleum Policy
b. Jetties: Potential areas of risk, physical and commercial
a. Proposed Commercial Framework for Midstream Oil
5. Downstream – Infrastructure and Markets
a. Commercialisation and Liberalisation of Downstream
b. Petroleum Products Pricing Policy
6. Developing National Human Resources
a. Problems of developing local content in a depressed economy
b. Nigeria must be able to Export Skills
c. Developing local content and implementing Local Content Act
d. Install institutional capacity building
e. Introduce a maintenance and safety culture
7. Communications: Internal and external communications strategy
8. Roadmap and Action Plan
a. Action plan for short term (months)
b. Implementation Plan for medium term (1-2 years)
c. Implementation Plan for long term (over two years)
d. Critical milestones