Nigeria parliament approves oil and gas bill

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Nigeria parliament approves oil and gas bill

Nigeria’s two-chamber parliament has approved the oil and gas bill that aims to attract new foreign investment to the OPEC country’s struggling petroleum industry.

The Petroleum Industry Bill (PIB) had been under review in the National Assembly for nearly two decades, beset by disagreements, including over how much money should go to local communities in oil-producing regions.

The PIB was meant to also address demands from local communities after years of underdevelopment and environmental damage in Nigeria’s oil-producing states. Local communities had asked for more than the initial proposal that companies invest 2.5% of their operating expenses into local projects.

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Ola Awoniyi, spokesman for the senate president said bill is supposed to provide a clearer framework and simplify taxes and royalties for oil companies working in Nigeria, which currently produces around 1.9 million barrels per day (bpd).

The law also overhauled the state-owned Nigeria National Petroleum Commission, to better separate commercial and regulatory roles. Oil companies had requested for changes to the law to ensure it was favourable to offshore developments, where half of Nigeria’s output is located.

“It has been 20 years in coming,” said House of Representatives Speaker Femi Gbajabiamila, also describing it as a “landmark achievement”.

Nigeria is one of the largest and oldest oil producers in Africa. The oil and gas sector is one of the most important sectors in the country’s economy, accounting for more than 90% of the country’s exports and 80% of the federal government’s revenue. The country is the ninth-largest in terms of global gas reserves with over 200 Tcf, but it has not started up any new gas projects recently.