Nnamdi Ebo | NewsBlog

In my NewsBlog Nnamdi Ebo, I provide perspectives on news, events and analysis of unique stories, and I also offer original content, articles and photos; with contributions from some of the best minds.

Nnamdi Ebo | NewsBlog

In my NewsBlog Nnamdi Ebo, I provide perspectives on news, events and analysis of unique stories, and I also offer original content, articles and photos; with contributions from some of the best minds.

Nnamdi Ebo | NewsBlog

In my NewsBlog Nnamdi Ebo, I provide perspectives on news, events and analysis of unique stories, and I also offer original content, articles and photos; with contributions from some of the best minds.

Nnamdi Ebo | NewsBlog

In my NewsBlog Nnamdi Ebo, I provide perspectives on news, events and analysis of unique stories, and I also offer original content, articles and photos; with contributions from some of the best minds.

Nnamdi Ebo | NewsBlog

In my NewsBlog Nnamdi Ebo, I provide perspectives on news, events and analysis of unique stories, and I also offer original content, articles and photos; with contributions from some of the best minds.

 

Nigerian senators hotly debate crucial oil bill

oilYAHOO! News | Reuters | Mar. 6, 2013

ABUJA (Reuters) – A bill that could unblock billions of dollars of investment into Africa’s biggest oil and gas industry ran into discord in Nigeria’s senate on Tuesday, casting doubt on whether it will be passed any time soon.

The Petroleum Industry Bill (PIB) is a comprehensive document seeking to reform everything from the mismanaged state energy company to fiscal terms with oil majors.

It has been more than five years in the making, but previous versions of it failed to get through parliament. Both houses have been debating it sporadically since late last year.

“The bill … will fundamentally alter … our oil sector. It is easily one of the most important bills to be considered by this chamber,” said Victor Ndoma-Egba, majority leader in the senate, the upper house.

“I therefore urge you all to seize the moment by making history, by giving this bill your unqualified support.”

But there was little sign it will get unqualified support.

“The bill we have before us is set to deform the sector, not reform it,” said Senator Isa Galaudu. “This bill is anti-investment, it is pro-corruption.”

President Goodluck Jonathan said in January that investment in the country’s oil industry was falling because of delays to the passing of the bill. Oil majors say they cannot commit capital to new exploration and production until it’s sorted out.

A major licensing round for new fields is unlikely to go ahead until the bill is passed.

Shell said last month it would invest $30 billion in offshore projects if there was clarity over contract terms.

NIGER REPORTERS . Nigerian Senate logo“If this bill had been passed, say a year ago, we could have made about $12 billion extra by now,” said Senator Emmanuel Paulka, who supports the bill.

Nigeria exports more than 2 million barrels per day (bpd) and also holds the world’s ninth largest gas reserves, but global competition and a lack of domestic investment could soon set it into decline, analysts say.

Oil majors such as Shell and Exxon are concerned about the taxes in the bill.

The restructuring of the state oil company is likely to be resisted by vested interests. Legislators are also unhappy at sweeping new powers granted to the oil minister in the bill.

Another area of contention is the host development fund, which is supposed to provide extra compensation for the communities who live around oilfields.

“The oil belongs to all Nigerians but you give concessions to the people whose areas produce the oil,” complained Senator Ahmed Lawan, adding the 13 percent extra revenue that oil producing states currently receive was already too much.

Analysts say the bill may have to be split up into several parts and passed separately to be workable.

Senator Bukola Saraki, from central Nigeria hinted at that solution, suggesting that issues that were important but less controversial should be hived off and passed in a separate bill.

If the bill passes this stage the Senate will set up committees to make recommended changes to the law before harmonising it with the House of Representatives, the lower chamber. This could take several months.

 

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