Nigeria's Cabinet has approved draft legislation that restructures the oil and gas sector and breaks up the Nigerian National Petroleum Corporation. Anti-corruption campaigners and opposition parties say Nigeria's oil industry is characterized by under-hand dealings worth billions of dollars annually. For VOA, Gilbert da Costa reports from Abuja.

Under the new reforms, three companies are expected to be created out of the corruption-ridden state oil company, Nigerian National Petroleum Corporation, NNPC.

Apart from its traditional role as a national oil company, the new entities would focus on petroleum distribution and gas assets.

Petroleum Minister of State, Odein Ajumogobia, told reporters the concept is to create an independent, profit-driven oil company that could raise funds from the capital markets for its operations.

"It is a draft bill that gives rise to the various new institutions that are being proposed, including making NNPC more independent and operational, accountable to its shareholder and not just the sort of core center that it is today," Ajumogobia said.

The reform bill, which will be submitted to the national assembly for debate, was drawn up by a government committee over a period of nine months.

NNPC controls about 60 percent of Nigeria's oil production of around two million barrels per day, but often falls behind in the funding of joint venture projects due to cash constraints.

An independent audit in 2006 reported a weakness in the public accounting of oil revenues.

Critics say political interference, embezzlement and administrative lapses have turned the state-owned petroleum company into a huge cash cow for the country's rulers.

The speaker of Nigeria's parliament said this week that the NNPC has failed to account for more than $10 billion over the past 10 years. The figure could increase dramatically as the investigation continues.

President Umaru YarAdua took office last year vowing to clean up the oil industry. Nigeria is one of Africa's biggest oil producers and the fifth largest supplier of crude to the United States, but remains plagued by poverty, corruption and crime.