Nigerian Legislation

Part III

First Schedule

Part I

1.    (1)            There shall be established a corporation by the name of the Nigerian National Petroleum Corporation (hereinafter in the Act referred to as "the Corporation") which shall be a body corporate with perpetual succession and a common seal and may sue or be sued in its corporate name.

(2)            The affairs of the Corporation shall, subject to Part II of this Act, be conducted by a Board of Directors of the Corporation which shall consist of a Chairman and the following other members, that is-

(a)             the Director-General, Federal Ministry of Finance and Economic Development;

(3)            The Chairman shall be a Minister in the Government of 1979 No. 44 the Federation to be known and styled as the Minister of Petroleum Resources.

(4)            The supplementary provisions set out in the First Schedule to this Act shall have effect with respect to the tenure of office of the members of the Board (other than the Chairman), proceedings of the Board, certain duties of the members thereof and the other matters mentioned therein.

2.    (1)           There may be appointed by the President an Alternate Chairman who may, pursuant to any general or special delegation given in that behalf by the Minister exercise the powers conferred upon the Minister or Chairman under this Act:

(2)           The provisions of the Ministers' Statutory Powers and Duties (Miscellaneous Provisions) Act shall not apply to any delegation made under this section and the question whether any delegation has been made hereunder shall not be inquired into except at the instance of the Minister.

3.    (1)           There shall be appointed by the National Council of Ministers, a Managing Director of the Corporation who shall be the chief executive officer of the Corporation and shall, subject to Part II of this Act, be responsible for the execution of the policy of the Corporation and the day-to-day running of the Corporation's activities and its associated services.

(2)           There shall be appointed by the Corporation a Secretary to the Corporation who shall not be a member of the Board and who shall keep the records and conduct the correspondence of the Board and perform such other duties as the Chairman or Managing Director may from time to time direct.

4.    (1)        Subject to this Act, the Corporation may appoint staff such persons as members of staff of the Corporation as it generally. considers necessary and may approve conditions of service, including provision for the payment of pensions.

(2)            If the Corporation thinks it expedient that any vacancy in the staff of the Corporation should be filled by a person holding office in any of the public services in the Federation, it shall inform the appropriate Civil Service Commission to that effect and thereafter the Corporation may cause such vacancy to be filled by way of secondment or transfer.

(3)           Where a member of any of the civil services in the Federation is seconded under subsection (2) of this section, he shall be notified of the terms and conditions of the secondment; and the secondment shall be without prejudice to any pension rights which, but for the secondment, would still accrue to him.

(4)           A person seconded under subsection (2) of this section may elect to be transferred to the staff of the Corporation, in which case any previous service in the public service concerned shall count as service for the purposes of pensions subsequently payable by the Corporation.

5.    (1)        Subject to the provisions of this Act, the Corporation shall be charged with the duty of-

(a)            exploring and prospecting for, working, winning or otherwise acquiring, possessing and disposing of petroleum;

(b)            refining, treating, processing and generally engaging in the handling of petroleum for the manufacture and production of petroleum products and its derivatives;

(c)            purchasing and marketing petroleum, its products and by-products;

(d)            providing and operating pipelines, tanker-ships or other facilities for the carriage or conveyance of crude oil, natural gas and their products and derivatives, water and any other liquids or other commodities related to the Corporation's operations;

(e)           constructing, equipping and maintaining tank farms and other facilities for the handling and treatment of petroleum and its products and derivatives;

(f)           carrying out research in connection with petroleum or anything derived from it and promoting activities for the purpose of turning to account the results of such research;

(g)          doing anything required for the purpose of giving effect to agreements entered into by the Federal Government with a view to securing participation by the Government or the Corporation in activities connected with petroleum;

(h)           generally engaging in activities that would enhance the petroleum industry in the overall interest of Nigeria; and

(i)           undertaking such other activities as are necessary or expedient for giving full effect to the provisions of this Act.

(2)         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.

7.    (1)         The Corporation shall keep proper accounts and proper records in relation thereto in a form which shall conform with the best commercial standards.

(2)         The Corporation shall as soon as may be after the end of the financial year to which the accounts relate cause its accounts to be audited by auditors appointed by the Corporation, with the approval of the National Council of Ministers, from the list of auditors and in accordance with the guidelines laid down by the Auditor-General of the Federation.

(3)        The auditors shall, on the completion of the audit of the accounts of the Corporation for each financial year, prepare and submit to the Corporation reports setting out-

(a)            general observations and recommendations of the auditors on the financial affairs of the Corporation for the year and on any important matters which the auditors desire to bring to the notice of the Corporation; and

(b)            detailed observations and recommendations of the auditors on all aspects of the operations of the Corporation for that year.

(4)         The Corporation shall maintain a fund which shall consist of-

(a)            such moneys as may from time to time be provided by the Federal Government for the purposes of this Act by way of grants or loans or otherwise howsoever; and

(b)           such moneys as may be received by the Corporation in the course of its operations or in relation to the exercise by the Corporation of any of its functions under this Act, and from such fund there shall be defrayed all expenses incurred by the Corporation.

(5)         The Corporation shall submit to the National Council of Ministers not later than three months before the end of each financial year estimates of its expenditure and income relating to the next following financial year.

8.   (1)         Subject to the other provisions of this section, the Corporation may from time to time borrow by overdraft or otherwise howsoever such sums as it may require in the exercise of its functions under this Act.

(2)        The Corporation shall not, without the approval of the National Council of Ministers, 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 specified by the National Council of Ministers.

(3)         Notwithstanding 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 required aforesaid-

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

(b)          is to be borrowed by the Corporation otherwise than temporarily, the Corporation shall not borrow the sum without the prior approval of the National Council of Ministers.

(5)         For the purposes of this section, any money borrowed by the Corporation from a subsidiary thereof or by any such subsidiary from the Corporation or any other subsidiary thereof shall be disregarded.

10.   (1)         There shall be established a department to be known as the Petroleum Inspectorate which shall, subject to the other provisions of this Part, be an integral part of the Corporation.

(2)           The Minister may delegate to the Alternate Chairman (where one is appointed) or the chief executive of the Inspectorate such of the powers conferred upon him under the Oil Pipelines Act, the Petroleum Act or any other enactment as he may deem necessary and in particular, but without prejudice to the generality of the foregoing, responsibility for the following matters, that is-

(a)           issuing permits and licences for all activities connected with petroleum exploration and exploitation and the refining, storage, marketing, transportation and distribution thereof; and

(b)           acting as the agency for the enforcement of the provisions of the said Acts and any relevant regulations made there under by the Minister;

(c)           carrying out such other functions as the Minister may direct from time to time,

(3)           In the exercise of the powers conferred upon the chief executive of the Inspectorate under this Act, he shall not be subject to the direction or control of any other person or authority in the Corporation except the Minister.

  (4)           For the avoidance of doubt, the Inspectorate shall not exercise any commercial functions in respect of any activities of the Government of the Federation relating to the petroleum industry.

11.    (1)         There shall be appointed by the Minister, with the approval of the National Council of Ministers, a person to be the chief executive of the Inspectorate to be known by such designation as the Minister may determine.

  (2)          There shall be appointed by the Corporation such other employees as may be necessary to assist the chief executive officer in the efficient discharge of the functions conferred on him under or pursuant to this Act.

12.     (1)         Notwithstanding anything in any other enactment, no suit against the Corporation, a member of the Board or any employee of the Corporation for any act done in pursuance or execution of any enactment or law, or of any public duties or authority, or in respect of any alleged neglect or default in the execution of such enactment or law, duties or authority, shall lie or be instituted in any court unless it is commenced within twelve months next after the act, neglect or default complained of or, in the case of a continuance of damage or injury, within twelve months next after the ceasing thereof.

(2)            No suit shall be commenced against the Corporation before the expiration of a period of one month after written notice of intention to commence the suit shall have been served upon the Corporation by the intending plaintiff or his agent; and the notice shall clearly and explicitly state the cause of action, the particulars of the claim, the name and place of abode of the intending plaintiff and the relief which he claims.

Part IV

16.     (1)         Oil pipelines and other installations belonging to the Corporation shall not be regarded as hereditaments or tenements to be valued for rating purposes; and for the purposes of this subsection, the expression "oil pipelines and other installations" includes oil rigs, refineries, power generating plants, pumping stations, tank farms and similar installations but does not include office or residential buildings.

  (2)          Except as provided in subsection (1) of this section, nothing in this Act shall be deemed to exempt the Corporation from liability for any tax, duty, rate, levy or other charge whatsoever, whether general or local:

Provided that the Corporation shall not be liable to pay any such tax, duty, rate, levy or charge unless every company liable to tax under the Petroleum Profits Tax Act is also liable for such payment.

17.     (1)         Subject to the provisions of this Act, the Criminal Justice (Miscellaneous Provisions) Act or any other enactment, the Corporation may make bye-laws –

(a)            prohibiting or restricting the access of members of the public or of any class of members of the public to any premises vested in, occupied by or under the control of the Corporation;

(b)            regulating the hours during which, the means whereby, the purposes for which and the conditions subject to which members of the public or any class of members of the public may have access to or egress from any such premises or portion thereof;

(c)            for ensuring the maintenance of good order and discipline amongst members of the public at any time when upon any such premises;

(d)            prohibiting or restricting the use of land over, underneath or near which the Corporation has any installation and for preventing the unauthorised or improper use of or willful or negligent acts occasioning injury to any property owned, vested in, occupied by or under the control of the Corporation.

  (2)          Bye-laws made under the provisions of this section shall not come into force until they have been approved by the Minister and published in such manner as he shall direct or until such later date as may be specified in the bye-laws.

  (3)          Bye-laws made under this section may provide that for the contravention of such bye-laws there may be imposed on the conviction of any person for any such contravention a fine not exceeding N500 or, in default of payment thereof, imprisonment for a term not exceeding twelve months.

  (4)          For the purposes of this section, members and employees of the Corporation shall not be deemed to be members of the public.

  (5)          In this section, "premises includes lands, plants and ancillary works.

(a)             the payment of compensation in respect of any loss or damage that may have been suffered in consequence of the operation of the provisions of this Act; and

(b)           the determination of any right or interest in any property acquired or possessed by the Corporation, and the amount of compensation payable as prescribed under the Land Use Act.

(a)            paragraph 12 of the First Schedule to the Petroleum Act (which provides for the relinquishment of one-half of the leased area after ten years of an oil mining lease); and

(b)            paragraphs 3 and 6 of the said Schedule (which relate to the duration of an oil exploration licence and oil prospecting licence, respectively); and

(c)            such other provisions of those enactments as the Minister may from time to time specify by public notice, shall be excluded.

21    . (1)         Land vested in the Corporation shall not be liable to be acquired compulsorily under any enactment or law; and notwithstanding anything in any other enactment or law, no mining operations shall be carried on, in or under any land vested in the Corporation or any land over which the Corporation is entitled to rights of support for the benefit of lands so vested except with the prior consent in writing of the Minister.

  (2)          For the purpose of this section, "land" includes any land under water beyond the territorial waters of Nigeria to which Nigeria is for the time being entitled to any exclusive rights.

22.     (1)         In this Act, unless the context otherwise requires -

  (2)          For the avoidance of doubt, it is hereby declared that service in the Corporation shall, for the purposes of the Trade Disputes (Essential Services) Act, be deemed to be essential.

23.     (1)         This Act may be cited as the Nigerian National Petroleum Corporation Act.

  (2)          As from the date of commencement of this Act, the Nigerian National Oil Corporation Act 1971 shall stand repealed and, accordingly, the Nigerian National Oil Corporation established under that Act shall be dissolved and the transitional and saving provisions of Part B of the Second Schedule to this Act shall have effect notwithstanding anything contained herein or in any other provision of this Act.

Part A

1.       (1)          Subject to paragraph 3 of this Schedule and the other provisions of this Act, a member of the Board who is not an ex-officio member shall, unless he previously relinquishes his membership on the Board-

(a)             hold office for three years on such terms as may be specified in his letter of appointment; and

(b)            be eligible for re-appointment for a further term of three years, but shall vacate his office at the expiration of a period of six years.

  (2)         No member of the Board shall be entitled to appoint an alternate or deputy to represent him at a meeting.

9.     (1)            The salaries of the Managing Director of the Corporation and of his immediate subordinates shall be such as may be determined from time to time by the National Council of Minister

(2)           The salaries of the other employees of the Corporation shall be determined by the Corporation.

(3)            Subject to any regulations made under paragraph 10 of this Schedule, the Corporation shall pay to any of its employees such pensions and gratuities as it may determine.

(a)             the conditions of service of its employees;

(b)             the grant of pensions, gratuities and other retiring benefits to its employees and their dependants, and the grant of gratuities to the estates or dependants of its deceased employees; and

(c)             the establishment and maintenance of medical benefit funds, superannuation funds and provident funds and the contributions (if any) payable thereto and the benefits receivable therefrom.

(a)             by any vacancy in the membership of the Board; or

(b)             by any defect in the appointment of a member of the Board; or

(c)             by reason that a person not entitled to do so took part in the proceedings.

Part B

1.             By virtue of this Act, there shall be vested in the Corporation (referred to in this Part of this Schedule as "the new Corporation") on the appointed day without any further assurance all assets, funds, resources and other movable or immovable property which immediately before the appointed day were vested in the Corporation dissolved by this Act (referred to in this part of this Schedule as "the old Corporation' ').

2.             As from the appointed day –

(a)             the rights, interests, obligations and liabilities of the old Corporation existing immediately before the appointed day under any contract or instrument, or at law or in equity apart from any contract or instrument, shall by virtue of this Act be assigned to and vested in the New Corporation;

(b)            any such contract or instrument as is mentioned in paragraph (a) of this Schedule shall be of the same force and effect against or in favour of the new Corporation and shall be enforceable as fully and effectively as if instead of the old Corporation, the new Corporation had been named therein or had been a party thereto; and

(c)            the new Corporation shall be subject to all the obligations and liabilities to which the old Corporation was subject immediately before the appointed day, and all other persons shall as from the appointed day have the same rights, powers and remedies against the new Corporation as they had against the old Corporation immediately before the appointed day.