ABSTRACT

This Research Study titled: “AN APPRAISAL OF THE LEGAL FRAMEWORK FOR THE PRIVATIZATION AND REFORM PROGRAMME FOR THE ENERGY SECTOR IN NIGERIA” was chosen after a careful review of the process and nature of the legal framework put in place in some relevant Nigeria legislations such as the Public Enterprises (Privatization and Commercialization Act) Laws of the Federation of Nigeria (LFN) 2004 (being the governing law on privatization of public enterprises) and the Electric Power Sector Reform Act No 6 2005, which provides the legal framework for the reform of the Energy Utilities in Nigeria. The Research Study explains the rationale for the implementation of the Privatization Programme in Nigeria, discusses the legal framework put in place for its implementation in order to guarantees investors’ confidence in the privatization programme and processes which should be open, transparent and sustainable as well as backed up by a strong will demonstrated by the Government at the centre. The Research Study provides an overview of the energy sector in Nigeria to include majorly, the electric power sector and the oil and gas industry and touches on the various policies and Legal Frameworks established for the privatization and reform of the Electricity Sector in Nigeria. In the same vein, the research study also highlight the key provisions of some relevant Laws that guide exploration and production of oil and gas in Nigeria over the past years such as the Petroleum Act, 2004 and the Deep Offshore, Inland Basin Production Sharing Contract Act
2004 (DOA), Petroleum (Drilling and Production) Regulations 1995 to name a few. The Research Study presents a critical appraisal of the various legal provisions that govern the regulatory institutions, evaluates the achievements or performance of the regulatory institutions (in relation to their regulatory
mandates) set up to implement the Federal Government of Nigeria’s privatization programme for the electricity sector and reform of the sector, and suggest or recommend ways of improving on the effectiveness/efficiency of these institutions going forward. The Research Study stressed the critical relevance of the reform of the Energy Sector in Nigeria to the sustenance and growth of the national economy and therefore strongly recommend amongst others, the vigorous execution of the FGN’s reform programme for the energy sector and the strengthening of regulatory capacities of the agencies and institutions of Government that have been mandated to execute the said reform programmes. The Research Study noted that it was therefore imperative that scheduled timelines for specific privatization milestones are strictly adhered to and pursued with the seriousness it deserve and for the overall benefit of Nigerians. The Nigerian Energy Sector has suffered serious setback arising from poor infrastructure situation and improper handling and management of Energy Utilities hence the call for a reform of the sector, the objective of this thesis is to take an academic excursion into the nature of legal framework that exist and support the privatization and reform of the said Energy sector in Nigeria and make far reaching recommendations on how to strengthen the governing legal framework for the Energy sector in Nigeria which for purpose of this study is restricted to the Electricity Power Sector and to some extent, suggest or make recommendations on the proposed oil and gas sector reform in Nigeria. This research work was chosen with the aim of broadening knowledge and academic literature on privatization and reform of the Energy Sector in Nigeria generally and in particular, provide a medium for making specific academic contributions towards developing legal issues arising from the legal framework for the privatization and reform of the said Energy Sector Nigeria.

TABLE OF CONTENTS

Title page — — — — — — — Declaration — — — — — — — Certification — — — — — — — Dedication — — — — — — — Acknowledgement — — — — — — — Table of Statutes — — — — — — — Abstract — — — — — — — Table of Content — — — — — — —

CHAPTER ONE
GENERAL INTRODUCTION
1.1 Introduction — — — — — — — 1
1.2 Statement of the problem — — — — — — 11
1.3 Aims and objectives of the study — — — — — 12
1.4 Methodology — — — — — — — 14
1.5 Scope and limitations of the study — — — — — 14
1.6 Literature Review — — — — — — — 15
CHAPTER TWO
2.1 Overview of the Petroleum industry in Nigeria — — — 23
2.2 Past and Present Legislations Governing the Petroleum Industry– 24
2.3 Legal Framework Governing Contractual Relationship/
Arrangement in the upstream sector (exploration and
production of petroleum in a contract area)– — — — 27
2.4 Key Terminologies used in production Sharing
Contracts (PSCS) — — — — — — — 33
2.5 Rights held by parties of oil concession — — — — 35
2.6 Features of Joint Venture Arrangements — — — 39
CHAPTER THREE
3.1 Legal Framework for Power Sector Reform in Nigeria — 43
3.2 Evolution of new legal framework for power sector– — 44
3.3 Legal Framework Established Pursuant to The
Electric Power Sector Reform Act No 6 2005 — — 46
3.4 Review of key Provisions of the Electric Power
Sector Reform (EPSR) Act No. 6, 2005 — — — 47
3.5 Objects, Powers and Functions of NERC — — — 47
3.6 Key Operational Documents — — — — — 50
3.7 Electricity License — — — — — — 52
3.8 Fiscal Incentives for Electricity Generation
Companies Utilizing Gas Fuel . — — — — — 53
3.9 Key Achievements/Milestone Recorded in the reform
of the electricity power sector —- — — — — 55
3.10 Appraisal of Challenges of the Reform of the Electricity
Power Sector — — — — — — 58
CHAPTER FOUR
CURRENT EFFORT AT PRIVATIZING THE ELECTRIC POWER
SECTOR INDUSTRY
4.1 Introduction — — — — — — — 61
4.2 Legal Framework for Privatization of Public Utilities — 66
4.3 Other Relevant Laws Regulating the Privatization
Programme — — — — — — — 72
4.4 Highlight of the Road Map for the Power Sector — — 75
4.5 Appraisal of the Legal Framework for the Privatization
Programme — — — — — — — 80
4.6 The Role of the Legislature in the Privatization
Programmes — — — — — — 84
CHAPTER FIVE
5.1 APPRAISAL OF THE IMPLEMENTATION OF OIL AND
INDUSTRY REFORM AND INSTITUTIONAL
RESTRUCTURING IN NIGERIA
5.2 Introduction — — — — — — 89
5.3 A Synopsis of the Ogic Report — — — — — 91
5.4 National Petroleum Directorate (NPD) — — — 93
5.5 Nigerian Petroleum Inspectorate (NPI) — — — 95
5.6 Petroleum Products/Regulatory Authority (PPRA) — — 96
5.7 Nigerian National Petroleum Corporation (NNPC Ltd) — 97
5.8 National Petroleum Assets Management Agency (NAPAMA) 99
5.9 National Petroleum Research Centre (NPRC) — — 100
5.10 Key Proposal Introduced by the Petroleum Industry Bill– 102
CHAPTER SIX
SUMMARY, FINDINGS, CONCLUSION AND RECOMMENDATIONS
6.1 Findings — — — — — — 104
6.2 Conclusion — — — — — — 105
6.3 Recommendations — — — — — — 107
Bibliography — — — — — — 114

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