New Bill a Blow to Nigeria’s Oil Market

A long-awaited oil law is reportedly set to pass through parliament, unlocking billions of dollars in frozen investments. As reported by the online news site Live Trading News, the Petroleum Industry Bill (PIB) has been gathering dust since 2008 because of disagreements between the government and global oil majors over its terms.

Addressing senators, the new head of the Nigerian National Petroleum Corporation (NNPC) Emmanuel Kachikwu, who is slated to become the country’s new junior oil ministry, was quoted as saying: "The average source of volumes in investments that we are losing on an annual basis because of the lack of PIB is in excess of 15bn [€13.7bn]”.

"The non-passage of the bill in whatever form over the years has created a level of uncertainty that no international investor wants to grapple with,” he added. "Parliament needs to "find a way of working with us and go ahead and pass those elements of [the] PIB where there’s not much contention.”

Analysts say the PIB would help redefine the fiscal terms in the oil and gas industry, increase Nigeria’s share of revenue and also help restructure the state-run NNPC.

Kachikwu, a former ExxonMobil executive, was appointed in August as part of President Muhammadu Buhari’s drive to overhaul the NNPC and cut down on corruption.

According to Live Trading News, the PIB as proposed would see international oil companies pay 10% of their net profits to a "Petroleum Host Community Fund” to benefit oil- and gas-producing areas. Oil majors, though, have balked at the prospect of their profits being cut, complaining the terms are too harsh and could stymie investment.