Offshore staff
LONDON – Nigeria’s National Assembly has passed the country’s Petroleum Industry Bill (PIB).
Mansur Mohammed of Wood Mackenzie’s sub-Saharan Africa upstream research team commented: “The Senate and House each passed different versions of the bill, which will now require reconciliation before it is sent to the president for assent into law. So, there is still outstanding work to do before the PIB becomes law, but we see momentum behind the bill.
“This is a significant milestone for the Nigerian petroleum industry; the bill has been nearly two decades in the making.”
The PIB is intended to make Nigeria’s petroleum sector a more attractive investment destination, with the government acting in response to international investors switching to alternative energy supplies.
Mohammed said: “Although the bill is on the final stretch, Nigeria’s petroleum industry faces significant threats to long-term oil demand…
“The majors have ambitious targets towards net-zero emissions by 2050, and their investment in upstream will be high graded to the most commercially attractive projects that meet strategic goals. Nigeria is important to their portfolios and the PIB will clarify the terms of their continued presence.”
The National Assembly will break shortly for the summer vacation, resuming session in early September, and various outstanding issues need to be resolved before year-end.
If the new petroleum law is also passed, Mohammed said, “the fiscal uncertainty deterring investment across upstream, gas, midstream and downstream will be alleviated.
“The latest version of the bill offers incentives and concessions made to assuage stakeholder concerns. Lower royalty and tax rates are proposed. Marginal fields and indigenous producers are expected to benefit more from favorable terms.”
07/02/2021
