Nigeria's Cabinet approves oil sector revamp Bill
The Petroleum Industry Bill's (PIB) passage is needed to unblock billions of dollars of stalled investment into exploration and production, but it has been stuck for about five years as ministers and parliamentarians disagreed on details.
"[Cabinet] today approved the final draft of the new PIB. We expect that within the next few days Mister President will forward it to the national assembly," Minister of Petroleum Resources Diezani Alison-Madueke told reporters on Wednesday at the presidential villa.
Industry participants say the Bill is needed to halt a decline in crude production in Nigeria.
The Bill includes plans to partly privatise and list the state oil company, tax oil company profits at 20% for deep offshore and 50% for shallow or onshore, and give the oil minister supervisory powers over all oil institutions.
"The new PIB is going to make the oil industry more competitive and accountable. It proposes revolutionary changes in the industry," Alison-Madueke said.
Industry experts have said that the tax terms in the latest Bill are more favourable to foreign oil companies like Shell, Exxon, Chevron and Total than previous drafts.
There is no guarantee that lawmakers will push through the Bill.
Powerful interests could block or delay it, as has happened in the past, although Jonathan being explicitly behind it gives this version of the draft a better chance than previous ones.
The Bill would also lead to an overhaul of the Nigerian National Petroleum Corporation (NNPC).
The oil minister said that NNPC would be unbundled and an independent National Oil Company (NOC) would be created, which would be listed and take over current infrastructure owned by Nigeria's government.
But the final draft does not make clear which assets the NOC will take over and if it will be given the most valuable production sharing contracts. – Sapa