The Nigerian Senate has passed a long-awaited oil industry reform bill that will overhaul nearly every aspect of oil and gas production. The Petroleum Industry Bill has been two decades in the making to overhaul the way Nigeria will share its oil resources with international oil companies and aim to attract new investment in oil and gas.
In the bill, the Senate approved a funding mechanism of 30 percent of NNPC's profit from oil and gas for frontier basins. This fund is for oil exploration in frontier states. The governors rejected the proposal. Governors from the southern part of the country rejected the proposed three percent share of oil profits for host communities in the Petroleum Industry Bill (PIB), including the suggested ownership structure of the Nigerian National Petroleum Corporation, (NNPC).
The governors want a five percent share of oil profits for host communities and insisted that the NNPC should not be vested in the Federal Ministry of Finance as proposed. Community leaders in Nigeria's oil-rich regions want changes to the latest version of the bill, asking for a larger share of revenues for the community.
Last month, Nigeria's National Petroleum Corporation said it had signed a deal with Shell, Exxon, Total, and Eni to develop an offshore oil block that includes the deepwater Bonga field. The NNPC noted the deal marks a historic moment as it settles long-running disputes between the Nigerian government and international oil companies.
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