FG’s stake in new entities under PIGB raises concern over conflict of interest

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As the House of Representatives, prepares to consider the Petroleum Industry Governance Bill, (PIGB), there are calls that the new entities created, the Nigerian Petroleum Assets Management Company (NPAMC) and the Nigerian Petroleum Corporation (NPC), with the bulk of their shares belonging to the Federal Government will create conflict of interest, Business Day reports.

While private investors seeks to maximize financial returns on their investment, government has a political objective, primarily to serve the public interest, stakeholders fear mixing the shareholding structure of these entities will bring conflict. The contention is how to align the contradictory ends. As such, experts have urged the House of Representatives to reduce government stake in the new entities that will emerge from the ashes of the Nigerian National Petroleum Corporation (NNPC) and list the bulk of their shares on public exchanges.

They said that only if the PIGB provides that the new entities: NPAMC and NPC operate in the same manner as the NLNG will the country achieve the objectives it set for them. While there have been successful state-owned enterprises such as Saudi Aramco, Petronas and Statoil, which undertake expansive operations and assume high levels of risk, much like large international extractives companies in the private sector, Nigeria has a poor history managing state owned firms.