Since 2008, there has been an effort in Nigeria to introduce a new Petroleum Industry Bill to replace the existing collection of 16 laws and regulations. The Joint PIB was submitted in March 2020 and updated in September 2020, and the Federal Government of Nigeria and the National Assembly aim to pass the bill in the first quarter of 2021.
The oil & gas industry is the main pillar of Nigeria’s economy. The Industry contributed 65 per cent of all revenues for the Government of Nigeria and 88 per cent of Nigeria’s foreign exchange as of 2018. Capital available globally to the oil and gas industry is also decreasing because of increased focus on carbon management and renewables over the long term and independence from oil & gas.
Over the past several years, a shrinking oil & gas demand is now being further exacerbated by a larger pool of supply made possible through the technology boom. Analysts believe that the right PIB will provide an opportunity to position Nigeria to attract capital by addressing two principles. The first is keeping total government take at globally-competitive rates; and the second is reducing the cost-of-doing-business in Nigeria.
Additionally, the Industry has been increasingly burdened with a plethora of fees, taxes, and levies which amount to ~10 per cent cost increases.