Abuja, Nigeria — 14 March 2013 – Nigeria’s legislative committee for its oil bill has officially started proceedings, bringing the country a step closer to ending uncertainty holding up billions of dollars of investment by foreign oil majors.
Fin24 reports that lawmakers on the panel must thrash out proposed amendments to the Petroleum Industry Bill (PIB), a leviathan piece of legislation aiming to reform everything from fiscal terms to the state oil firm. It has been years in the making and previous versions failed to pass through parliament. When the committee has finished, the bill goes back to parliament for more discussion before a vote.
Speaker of the lower house Aminu Tambuwal urged the committee during an inauguration speech to ensure the bill “addresses comprehensively the hiccups that have encumbered Nigeria’s oil sector and constrained optimal operations and returns.”
He listed these as “environmental degradation, general operational inefficiency, outright fraud, as well as insecurity of investment and infrastructure.”
Some clauses are controversial and it is expected that they will be fiercely debated.
Most members of the national assembly are unhappy about sweeping new powers granted to oil minister Alison Diezani Alison-Madueke, including powers to grant leases on oil blocks unconditionally.
Northern lawmakers are also disputing proposals for a 10% wealth fund for south-eastern communities living around oil fields, arguing that governors of oil producing states already get an extra 13% of the national cake.
Oil companies are concerned about what they say are too high taxes and royalties on offshore production. Shell said last month it would invest US$30 billion in offshore projects if clarity over contract terms came out of the PIB.
Source: Fin24. For more information, click here.