Oil is a natural petroleum product from hydrocarbon deposits and other organic materials. As a major source of income for the Nigerian economy, it accounts for as much as about 70% of government revenue, and more than 83% of the country’s total export earnings. Nigeria is the eleventh largest oil producer in the world with about 35.2 billion barrels of crude oil reserves.
The significance of oil as a world energy resource is difficult to overemphasize. The growth in energy production during the 20 Century was unprecedented, and increasing oil production has been by far the major contributor to that growth. The position of our country in this system depends on its production capacity as related to its consumption. With no iota of doubt, the Petroleum Industry Act is a game-changer for the industry.
The Bill provides for the establishment of the Nigerian Upstream Regulatory Commission whose role is to regulate the technical and commercial aspects in the operations undergone at the upstream stage. The Fiscal Objective of the Bill is to provide a framework that will attract investors to the Petroleum Industry and generate revenue for the government while ensuring that investors get their money’s worth.Transfer and sale of the shares are to be approved by the Government and endorsed by the National Economic Council.It is hoped that the Petroleum Industry Act will now achieve the following objectives; To define the relationship between the society and investors.
The NNPC board must demonstrate capacity to eradicate epileptic and severe shortages in foreign exchange which developing nations like Nigeria chronically experience from commodities prices like petroleum if economic growth and development are to be pursued seriously. The oil industry in Nigeria currently needs foreign exchange to finance development and infrastructure.
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