(Changes name in paragraph 10 to Natural Resource GovernanceInstitute)
By Libby George
LONDON, Nov 11 (Reuters) - Nigeria outlined a plan tooverhaul state oil company NNPC and eventually list it on thestock exchange in a bid to modernise and streamline an industryknown for graft and mismanagement.
The ministry of petroleum released a draft late on Thursdayto underpin industry reform stalled for a decade amiddisagreements and political infighting over how best to managethe nation's energy resources.
The ministry seeks, in the proposal, to end the OPECmember's reliance on oil exports and shift to a "gas-basedindustrial economy," and said Nigeria needs to reform the oilsector or risk output falling.
"Unless there are additions to reserves and those reservesare brought into production, Nigeria can expect to see absolutedeclines in production from around 2020," the plan said.
As a key step to improve crude output of around 2 millionbarrels a day, Nigeria wants to transform NNPC from anbureaucratic empire where little work gets done into an entityfunctioning like the private sector.
"NNPC will be made autonomous from the state, it willrelinquish all its policy making and regulatory activities, andit will be treated on an equal basis with private sectoroperators for projects," the draft said.
The West African nation has been mulling a sale of oilassets to raise hard currency as a slump in vital oil revenueshas eroded the budget.
The proposal said a newly formed corporation could sellstakes "so long as the government shareholder retains effectivecontrol and ownership." The listing itself is unlikely to happensoon, as foreign investors worried about a new currencydevaluation have exited the Nigerian bourse.
The ministry said it will consult with lawmakers over thereform, but it faces serious challenges. Some members ofparliament, including from the president's All ProgressivesCongress (APC), have objected to government plans to sell oiland other assets to raise hard currency.
"It's commendable that they have actually tried to make apetroleum sector policy," said Aaron Sayne, senior governanceofficer with the Natural Resource Governance Institute.
But he said the lack of details, specific targets and thebacking of a broad coalition would make it difficult to achievemany of the aims.
"Where this is short on details is where the vestedpolitical interests are the strongest," he said. "It's not clearthat it has the political support."
REFINERY REVAMP
The ministry's draft proposes a similar approach to spurinvestment in the nation's sclerotic refineries, allowing theclosure or privatisation of them unless they can becomeprofitable. It would also eliminate any remaining fuel subsidiesand aim to deregulate fuel prices.
It also included placing more responsibility for oil spillsand pollution on the companies operating them, includingcriminal "prosecutions of company directors where necessary."
The issue is sensitive for oil majors operating in the NigerDelta oil hub where militants and villagers fight for a greatershare of oil revenues and higher compensation for oil spills.
Shell, one of the largest international companiesoperating in Nigeria, Chevron, and ExxonMobil declined to comment on the plan. ENI did notimmediately respond to a request for comment. (Reporting By Libby George; Editing by Ulf Laessing and DavidEvans)
