…Niger Delta communities to get 5% of oil wealth

Nigerians are glad to hear the good news that both chambers of the National Assembly have passed the protracted Petroleum Industry Bill, PIB, into law after almost 2 decades of deliberation in the National Assembly. The PIB’s approval is essential to attract capital for fossil fuel development.

The bill overhauls nearly every aspect of the country’s oil and gas production, putting a project that has been in the works for two decades one step closer to presidential sign-off.

Legislators have been hashing out details of the bill since President Muhammadu Buhari presented an initial version in September 2020, but an overhaul has been in the works for almost twenty years.

The chambers had been expected to vote clause by clause on the more than 400-page long report, but instead quickly voted on the full package.

Each chamber made some changes before approving it, meaning they will need to meet again to hash out the details, which members said would begin next week, before it is submitted for presidential ascent.

Earlier, members of the senate had entered a closed-door session with the Minister of State for Petroleum Resources, Timipre Sylva and Group Managing Director of Nigerian National Petroleum Corporation, NNPC, Mele Kyari for briefing on the technical terms and details.

A copy of the technical report submitted by the National Assembly proposed the share of regional oil wealth generated from production that host communities can claim would increase from 2.5% to 5%.

However, the host communities had requested for 10% share.

Key changes to the bill would lower the royalties for new production from Deepwater oilfields to 5% from 7.5% and boost the production level that triggers higher royalties from 15,000 barrels per day (bpd) to 50,000 bpd.

For onshore and shallow water oilfields, it would reduce the hydrocarbon tax to 30% for converted leases, down from 42.5% in the original bill.

The proposal also includes a string of changes sought by oil majors, including amended royalties and fiscal terms for oil and gas production, and the transfer of state oil company NNPC’s assets and liabilities to a limited liability corporation created by the bill.