Nigeria has moved closer to turning an oil industry bill into law after a 17 year struggle to complete the legislation which aims to increase transparency and stimulate growth in the country’s oil industry.
Nigeria’ lower house of parliament has passed a version of the bill which is the same as one approved by the Senate last year. This is the first time both houses have approved the same version of the bill. It still needs the president’s signature to become law.
The legislation – known as the Petroleum Industry Bill (PIB)- was broken up into sections to help to get it through.
The House of Representatives passed the first part called the Petroleum Industry Governance Bill (PIGB) on Wednesday.
“The PIGB, as passed yesterday, is the same as passed by the Senate. We have harmonised everything and formed the National Assembly Joint Committee on PIB,” Alhassan Ado Doguwa, a key PIB lawmaker in the House of Representatives, told reporters in the capital Abuja.
“Every consideration of the bills is now under the joint committee. We have broken the jinx after 17 years. We are working on the other accompanying bills.”
The passage of the first bill means that the government can move forward with new taxation legislation, which could make it more attractive for companies to invest, particularly offshore.
“It’s an unprecedented step forward. The PIB is something that has defied the last two governments,” Antony Goldman of PM Consulting said.
“The detail of what is agreed will determine the extreme to which the bill takes politics out of the sector and tackles systemic corruption.”
Uncertainty over terms affecting taxation of upstream oil development has been the main sticking point holding back billions of dollars of investment for the oil industry. This will be addressed later in an accompanying bill.
Shell, Chevron, Total, ExxonMobil and Italy’s Eni are major producers in Nigeria through joint ventures with the state oil firm NNPC.
The speaker for the House of Representatives Yakubu Dogara said later on Thursday that “the new legislation will be transmitted to the President within the next few days.”
The governance section deals with management of the Nigerian National Petroleum Corporation (NNPC). The National Assembly Joint Committee is working on two more bills as part of the PIB.
Dogara added that NNPC would be unbundled as a result of the legislation going through.
The PIGB would create four new entities whose powers would include the ability to conduct bid rounds, award exploration licences and make recommendations to the oil minister on upstream licences.
Nigerian lawmakers ordered an investigation on Thursday into whether the government could recover $21 billion in revenues from international oil companies.
(Editing by Jason Neely and Jane Merriman)