Oil Licensing Guidelines Beyond NNPC Powers By Mohammed Bougei Attah

My attention has been drawn to a cover page story captioned ‘NNPC’s Oil Lifting Guidelines Violate Nigerian Content Law’ published in ThisDay Newspaper of Tuesday April 10, and quoting several sections of the Local Content Act (LCA) to buttress the position of local oil companies.

While the LCA is applicable in this case, the agitators should be conscious of the fact that there exist other Nigeria laws that supersede this law which must be read together to make meaning. In other words, those advocating for the reversal of the Guidelines by the Nigeria National Petroleum Company (NNPC) to favour local companies should note that no law works independently.

For example and as published exclusively in the Daily Trust Newspaper of Tuesday March 20 and captioned ‘Questions Over Oil Licensing Round’ and NewsDiaryOnline captioned ‘New Oil Licensing Round, Due Process and Influence of Corruption’, Section 55 of the Public Procurement Act (PPA) 2007 is fundamental to licensing of oil blocks vis-à-vis the guidelines. Thus the power to approve the Guidelines for the allocation and lifting of oil blocks in Nigeria lies with the yet-to-be-inaugurated National Council on Public Procurement (NCPP). This is because licensing and lifting of oil block falls under disposal of public assets, exclusively capture under the PPA.

As maintained in the said publications above, “The potency of Section 55 is very clear on the role of Ministries, Departments and Agencies (MDAs) of government. This section provides further that only the National Council on Public Procurement (NCPP) has the powers to approve the Guidelines for the Disposal of Public Assets. Additionally, Section 16 (3) gives the Bureau of Public Procurement (BPP) the powers to issue ‘No Objection Certificate’ before any such transactions is carried out”

In my opinion therefore, whatever the nature of guidelines that are currently in use by the NNPC is only a draft document that is subject to approval by the Procurement Council at the appropriate time. Even if the local oil companies decide to contest this Guideline in the court of law, there are other parties, such as the civil society groups that will also be interested in the interpretation of the laws as regard these two Acts.

It should be made clear that the Group Managing Director (GMD) of NNPC, Engr. Austin Oniwon as being accused has no legal authority to approve any Guideline for the disposal of oil blocks. Here also, the local companies will be violating the PPA if a reversal is effected that favours their lifting of the oil without recourse to the PPA.

Ii is important to note also that all foreign oil giants, such as Chevron, Shell, and AGIP where the Federal Government has  60% stake under the Joint Venture Agreement are subject to the law, as contained in Section 15 (a) and (b) of the PPA

Mohammed Bougei Attah is the National Coordinator of Procurement Observation and Advocacy Initiative (PRADIN)

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