- Tuesday, 24 February 2009
- By Administrator
Oil companies are particularly concerned by the contents of a new Petroleum Industry Bill which they fear will significantly increase the amount of taxes they have to pay to the Nigerian government at a time when falling oil prices are hitting revenues.“We do see that the legislation, the bill, will have a profound impact on the way the industry functions and how the companies move forward.Getting it right (is) absolutely essential,” Ms Pickard said. “Getting it wrong will not be acceptable for Nigeria or the IOCs (International Oil Companies).”
The bill lays the legal framework for an overhaul of the entire Nigerian oil and gas industry, including plans to transform the underperforming Nigerian National Petroleum Corporation, the state-oil company, into a commercial entity capable of raising finance on international capital markets.
The bill has been submitted to the National Assembly but has not yet been passed into law.Ms Pickard said Shell was in favour of the government’s plan to restructure the NNPC, which is designed to tackle a chronic lack of investment in its joint ventures with Western majors, but said questions over the future shape of the tax regime were hurting new investment.“The fiscal uncertainties that are out there are already slowing new projects,” she said, adding that Shell was keen to work with the government to ensure the reform process delivered greater efficiency and transparency.
Ms Pickard delivered her warning before hundreds of delegates at the Nigeria Oil and Gas conference, an annual gathering of top Nigerian policy-makers and senior executives from Western majors active in Nigeria, including Chevron, Total, and ExxonMobil.Ms Pickard shared the podium with Rilwanu Lukman, Nigeria’s oil minister, who is regarded as the architect of the reform process.Mr Lukman, a former OPEC secretary-general, had earlier told delegates that the bill would ultimately deliver a more efficient oil industry, to the benefit of both the government and energy companies. “This exercise will constitute one of the most historic achievements of our nation when it is fully concluded,” he told the conference.
Financial Times Limited