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A Reuter’s story reports the Senate President saying Nigeria’s legislature has begun consulting with the president to draft “from scratch” a bill overhauling the nation’s petroleum sector and will aim to pass it by the end of 2020.

According to the Senate President, the ninth National Assembly will likely break the jinx this time around and pass the long-awaited Petroleum Industry Bill (PIB), which has not been assented to for more than a decade.

PIB was first introduced to the National Assembly in December 2008. A presidential committee set up in 2007 to look into the oil and gas sector came up with the idea of this bill, which aims to increase transparency at the NNPC and to increase Nigeria’s share of oil revenue.

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Drafts of the bill, however, became very contentious due to objections from the international oil companies (IOCs) and the Nigerian National Petroleum Corporation (NNPC). Consequently, the bill was never passed into law.

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Towards the end of 2015, the then Minister of State for Petroleum Resources, Dr. Ibe Kachikwu noted that the PIB was to be amended to speed up its passage.

Consequently, the PIB was broken into different bills, one of which was the PIGB, to address various aspects of the oil industry. The Senate President noted that the plan was to pass quickly the aspects of the old law that were not controversial while the controversial bits could wait.

The PIB amongst other things looked into the ownership and management of petroleum resources, functions and powers of the Minister of Petroleum, the establishment of the Nigerian Petroleum Regulatory Commission (NPRC) which was to act as a regulator for the entire petroleum industry (upstream, midstream and downstream) and the restructuring of the NNPC.

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Many oil companies believe new investments in the oil sector is dependent on the passage of the PIB which would take a more holistic approach in addressing issues around the fiscal terms especially following the passage of the Deep Offshore and Inland Basin Production Sharing Contracts (amendment) Bill, 2019 (PSC Amendment Bill).

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The revised Act introduced a price-based royalty payment system, which adds between 0% to 10%, depending on the prevailing oil price in the market and makes oil firms executing deep offshore projects in Nigeria pay varying percentages based on the prevailing price of a barrel of oil at the time.

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Currently, Nigeria is said to have one of the least competitive Deepwater fiscal terms in Africa and is increasingly losing significant amounts of potential investments to other African countries.

According to news reports, Nigeria, with more significant reserves has attracted very little investments, whereas Egypt, Angola and Ghana with about half of Nigeria’s reserves combined, have attracted more investments for new projects because they offer more attractive Deepwater fiscal terms to encourage investments.

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