Nigeria Content Online

Nigeria’s ambitious oil reforms look set to be delayed further
as lawmakers give more consideration to government and foreign oil company
concerns, a senior government official said on Thursday.

A new president and a cabinet reshuffle, including a change in
oil ministers, looks likely to prompt Nigeria’s parliament to revisit issues,
stalling the final stages of the Petroleum Industry Bill (PIB) after years of
development.” Remember, there has been a recent change in government,” said
Philip Chukwu, executive director of exploration and production for Nigeria’s
petroleum ministry, when asked why the PIB was still in deliberation.”

The National Assembly are looking at areas of concern,
especially the international oil companies … We have our own concerns,” Mr
Chukwu said on the sidelines of a Nigerian investment conference in London.

The PIB aims to make state oil firm NNPC more competitive and
transparent, encourage outside investment, promote local oil company
involvement and increase gas supplies to the dilapidated domestic market. But
international oil companies worry the bill will impose higher taxes and
royalties while failing to address key issues of under-funding, corruption and
security.

More disagreements

“I definitely think it (PIB) will be delayed further because
there are so many contentious issues in it,” said Holly Pattenden, Nigeria
expert at London-based Business Monitor International.” The fact that the
administration has changed means that they’re going to have to look at it very
closely, and I expect there to be more disagreements.”

With elections due to be held in April next year, new oil
minister Diezani Allison-Madueke and Nigeria’s government are running out of
time to pass the oil reform legislation. Nigeria relies on its energy industry
for 90 percent of export revenue, but Africa’s second-largest economy has never
fully realised its production potential due to sabotage of oil facilities,
which has cut out a third of its capacity of three million barrels per day.

A government amnesty last year encouraged thousands of militants
to lay down their weapons and led to months without attacks, which allowed oil
companies to make pipeline repairs and ramp up output. However, several
incidents last month pointed to a resurgence in oil theft and pipeline
sabotage, threatening to set back the post-amnesty progress.

Speaking at Thursday’s conference, which focused on investment in the
restive oil-producing Niger Delta region, Chukwu said militant unrest had been
successfully diffused.” Pipeline vandalism is declining and I can say
production in Nigeria has risen,” he said. Chukwu said crude oil and condensate
production was around 2.5 million barrels per day.