Nigeria's parliament will pass wide-ranging legislation to reform its energy industry within weeks, redefining the OPEC member's relationship with its foreign oil partners, the oil minister said on Thursday.
Deziani Allison-Madueke told CNN she was confident the Petroleum Industry Bill (PIB), repeatedly delayed by revisions and disagreement, would be made law within the next four to five weeks. Uncertainty over the legislation, which will alter the fiscal terms for foreign oil firms including Royal Dutch Shell, ExxonMobil and Chevron, has put billion of dollars of investment on hold, oil executives say.
'I am ensuring that within the next four to five weeks, with the major assistance of the National Assembly of Nigeria, we shall in fact be promulgating it into law,' Allison-Madueke said. The Senate is on summer recess until Sept. 21 and the House of Representatives until Oct. 12 and Allison-Madueke did not clarify how the bill would pass before then.
Africa's most populous nation is due to hold presidential and parliamentary polls in January, and there have been questions as to whether parliament will have time to pass the legislation before the current presidential term ends. Government says the far-reaching bill will resolve many of the sector's problems, including the persistent inability of state oil firm NNPC -- which operates joint ventures with foreign partners -- to fund projects on time.
Under the bill, NNPC would be broken up into profit-driven units able to tap international capital markets for funding. The move could bring some of the biggest financing deals of their kind ever taken in Africa. The bill also aims to encourage more new investment in Africa's biggest oil and gas industry, promote greater involvement of local oil companies and increase gas supplies to the dilapidated domestic market.
But Nigeria's existing oil partners are worried the bill will impose higher taxes and royalties while failing to address key issues of under-funding, corruption and security. Royal Dutch Shell told Reuters last month it had some $40 billion worth of potential investment in deepwater oil projects on hold amid uncertainty over the planned reforms.
The PIB has been through so many amendments and revisions, as it was debated in parliament and as oil companies gave their input, that industry insiders say the final bill will bear little resemblance to the original. Government and industry have continued to negotiate over the terms of the legislation in recent months and Allison-Madueke gave no details on what the final bill would look like.
Industry executives say privately that seeking to change so many parts of the industry at the same time -- from new rules on local content in oil projects to a different fiscal framework -- will be virtually impossible to implement immediately.