Page 4 - AfrOil Week 39

AfrOil COMMENTARY AfrOil

(File photo)
(File photo)
Details of PIB emerge

Nigeria’s proposed oil law reportedly calls for privatising NNPC, amending the royalty
regime and changing the line-up of state agencies overseeing the hydrocarbon sector

NIGERIA’S federal government has not talked PIB calls for the creation of a limited liability
much about the details of its Petroleum Industry corporation that is capable of operating as a
WHAT: Bill (PIB), the long-awaited oil and gas law that commercial entity with no access to govern-
The PIB has mostly been was finally submitted to the National Assembly ment funds. It states that Nigeria’s Ministries of
kept under wraps, but in August. Finance and Petroleum Resources will transfer
some details are coming Earlier this week, though, Reuters said that NNPC’s assets to the new firm and then pay in
to light. it had viewed a copy of the bill. And if the news cash for shares in the NOC’s replacement.
agency’s report is accurate, Nigeria’s hydrocar- Officials in Abuja hope that the changes
WHY: bon sector is headed for some major changes. will help the company raise the funds it needs
The legislation lays the According to Reuters, the PIB lays the for new exploration and development projects,
groundwork for some groundwork for reform on multiple fronts. Reuters commented.
major changes. First, it provides for the privatisation of Nigerian
National Petroleum Corp. (NNPC), the gov- Royalty regime
WHAT NEXT: ernment-owned national oil company (NOC). As for deepwater royalties, the PIB serves to
The National Assembly Next, it revises the deepwater royalty regime amend the Deep Offshore and Inland Basin Pro-
has a good chance of
passing the bill and send- adopted last year. duction-Sharing Contract Act. It raises the floor
ing it to the president for Additionally, it changes the line-up of state for royalty payments, stipulating that develop-
signature by year-end. agencies responsible for overseeing oil and gas ers’ obligation to pay kicks in when crude prices
operations. top $50 per barrel, up from the previous level of
$35 per barrel. It also cuts the royalty rate for off-
Privatisation of NNPC shore sites yielding less than 15,000 barrels per
With respect to the divestment of NNPC, the day (bpd) from 10% to 7.5%.

P4 www. NEWSBASE .com Week 39 30•September•2020