Nigerian president takes next step in oil reforms

By Felix Onuah

ABUJA (Reuters) - Nigerian President Umaru Yar'Adua said on Monday he will seek cabinet approval next week for a draft legislation that restructures the state oil and gas sector and breaks up the Nigerian National Petroleum Corp. (NNPC).

Among the major reforms, which were first announced in August 2007, the OPEC member would create an independent, profit-driven state oil firm that can raise funds by investing in the capital markets instead of using government revenue.

A government-appointed committee on Monday submitted to Yar'Adua its final recommendations for a draft oil bill after nine months of work.

"This is what we ought to have done two decades ago. This report will enable our oil industry to compete," Yar'Adua told reporters.

If approved by the cabinet, the bill will then be submitted to the National Assembly for debate.

Unions and opposition parties have criticized the NNPC for a lack of transparency in the management of contracts for fuel imports and crude exports, worth billions of dollars annually.

NNPC controls about 60 percent of the country's oil production of around 2 million barrels per day, but the company struggles to finance its share of investment because it is poorly managed and structured.

It was forced in May to borrow billions of dollars from foreign oil firms Royal Dutch Shell (RDSa.L), ExxonMobil (XOM.N) and Total (TOTF.PA) to plug funding gaps in their joint venture projects.