- Published on Wednesday, 11 July 2012 20:52
- Written by Elombah.com
Nigeria's Federal Executive Council (FEC) has approved the Petroleum Industry Bill (PIB) for onward transmission to the National Assembly, the oil minister said on Wednesday. The Petroleum Industry Bill's 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 the National Assembly disagreed on details.
Briefing State House correspondents at the end of its weekly council meeting, the minister of petroleum resources, Mrs. Deziani Allison-Madueke said the new PIB which will ensure the independence of the regulators in the oil and gas sector as well as unbundle the NNPC, will yield high return on investments for Nigerians.
"The Executive Council 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," Diezani Alison-Madueke told reporters at the presidential villa.
Critics say what has been approved by the FEC is a watered down version that was designed to favour the Oil and Gas majors at the expense of the Nigerian people.
“The new PIB is going to make the oil industry more competitive and accountable. It proposes revolutionary changes in the industry,” said the minister
She said that the fiscal frameworks which delayed the bill in the past have been reworked and that when passed by the National Assembly, the country will remain an interesting investment destination for oil and gas investors.
Industry participants say the PIB is needed to halt a decline in crude production in Nigeria.
The bill includes plans to partly privatize and list the state oil company, tax oil company profits at 20 percent for deep offshore and 50 percent for shallow or onshore, and give the oil minister supervisory powers over all oil institutions.
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 bill a better chance than previous ones.
The PIB 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 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.
In another development, the FEC also directed the ministers of agriculture and finance to reduce the import duty rate for cassava enhancing enzymes from 10 to 0 percent as well as come up with a development fund that will support the value chain in the production of bread in an effort to promote cassava farming in the country as well as reduce the country’s dependency on importation of wheat.
Budget Office of the ministry of finance will manage the fund meant for small scale millers who may need additional support.