Abuja - The Petroleum Industry Bill (PIB) gives the oil minister new supervisory powers over all industry institutions, including a new regulator to police downstream and upstream, raising concerns about checks and balances. Lawmakers had rejected drafts that did this in the past.
It says anyone who “interferes” with the minister will be fined or imprisoned. And it allows the oil minister and the directors of state institutions to receive gifts, which will not please civil society groups calling for an end to graft.
Also in the new PIB, foreign oil companies like Shell, Chevron and Exxon will be relieved that tax changes are more favourable compared with previous versions. This could be a sticking point with lawmakers seeking a better deal for Nigeria.
Analysts say that the taxes foreign firms pay on profits onshore, which will be published under the PIB, will amount to a big cut from the taxes that are now levied in secret.
Furthermore, the cut will apply both to existing fields and to new fields, unlike in earlier versions of the law which cut taxes only on new fields, the analysts say. Van Meurs says the government could lose 20-50 percent of its tax revenue per barrel on existing assets.