International Oil Companies, FG meet over PIB

As the passage of the Petroleum Industry Bill into law draws nearer, the International Oil Companies and the Federal Government have engaged in another round of strategic meetings to gain a common ground on the framework and design of the Legislation.

The IOCs have been critical about some parts and terms of the bill and have been very wary of the future of the Petroleum Industry in the Country, if the salient issues identified are not properly addressed.

One of the issues that is generating a lot of debate and concern for the IOCs is the proposed gas tax by the bill, which if implemented will increase from 30 percent to 80 percent, as well as royalty payment which should move from seven percent to about 12.5 percent for major players in the Industry.

This round of discussions between the Governments and the Foreign Oil and Gas Companies is to once again take a critical assessment of the proposed royalty payments, which the Trans-National Corporations have considered to be too high.

The Government had Stated that “Government is particular about protecting the oil and gas sector. There have been massive divestments by these companies in the last few months. We are worried that this may not be good to the oil and gas sector. In as much the government is interested in collecting higher royalties, it is also interested in protecting and encouraging investments in the sector.”

The Multinationals have said that if Government is adamant about the PIB, without seeking measures to review it and reach a level of compromise with them, they are scared that foreign investments which is the drive of the Nation, could be hampered.

Reacting to the fears expressed by IOCs, the Petroleum Minister, Mrs Diezani Alison Madueke said “Signs of willingness by the government to review a planned hike in royalties come at a critical moment, since the legislation is awaiting final approval from the lawmakers and should be passed within two to three months time”.