PIB: FG adds Reduction of hydrocarbon tax, others to bill
The federal government has added some changes to the Petroleum Industry Bill (PIB) in order to drive more investments in the Nigerian oil and gas sector.
The key changes to the bill which is expected to be passed in May would lower the royalties for new production from deepwater oilfields to 5 percent from 7.5 percent and boost the production level that triggers higher royalties from 15,000 barrels per day (BPD) to 50,000 BPD.
For onshore and shallow water oilfields, it would reduce the hydrocarbon tax to 30% for converted leases, down from 42.5% in the original bill.
The changes would also guarantee that state oil company NNPC’s assets and liabilities would transfer to a limited liability corporation. This will help oil companies to collect money owed by NNPC.
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According to Reuters in an exclusive report on Friday, it revealed that four people closely involved with the legislation, a letter from oil companies, seen by Reuters showed the changes.
The changes would also guarantee that NNPC’s assets and liabilities will be transferred to a limited liability corporation, which will enable oil companies receive debt owed by NNPC.
The report revealed that oil executives in their letter urged for more changes regarding gas and fiscal term stability, stating that “terms are not sufficiently competitive to stimulate the desired new investments.”