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Legislative bills

Major Oil Companies in Nigeria Schedule Emergency Meeting with NNPC on PIB

Strategic Insights

— 2 min read

Major oil companies in Nigeria are set to hold an emergency meeting with the Nigerian National Petroleum Corporation (NNPC) to iron out contentious issues in the recently passed Petroleum Industry Bill (PIB). The meeting comes as a response to the bill's controversial clauses, including taxes and royalties, which were contested by the International Oil Companies (IOCs) before its passage. The IOCs, under the aegis of the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry, will be represented by Chairman Mike Sangster, the managing director/chief executive of Total Upstream Companies in Nigeria and Representative of TotalEnergies. Meanwhile, the OPEC secretary-general, Dr Mohammad Barkindo, has commended President Muhammadu Buhari and the National Assembly on the PIB, stating that the legislation will help guide necessary reforms to strengthen institutions and attract investment.

Key Takeaways:

  • The emergency meeting between oil companies and the NNPC aims to address contentious issues in the PIB, including taxes and royalties.
  • The IOCs will be represented by Chairman Mike Sangster, managing director/chief executive of Total Upstream Companies in Nigeria and Representative of TotalEnergies.
  • The PIB prescribes 30% of NNPC profits for exploration activities in 'frontier basins' and establishes a Nigerian Upstream Regulatory Commission (NURC) and a Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
  • The new bill also requires the Minister of Petroleum to incorporate the NNPC into a Limited Company with 100% FGN share ownership within six months.
  • The Community Development Fund payment has been settled at 3% under Clause 240(2), down from the initial demand of 5%.
  • Tax and finance provisions have been streamlined to ensure greater transparency, while operators must submit environmental plans and comply with environmental regulations.

Statistics:

  • 30%: the percentage of NNPC profits allocated for exploration activities in 'frontier basins'.
  • 100%: the FGN share ownership required for the NNPC Limited Company.
  • 5%: the initial demand for Community Development Fund payment from the oil-producing areas.
  • 3%: the settled amount for Community Development Fund payment.
  • 6 months: the timeframe for the Minister of Petroleum to incorporate the NNPC into a Limited Company with 100% FGN share ownership.
  • 5.5%: OPEC's forecasted global economic growth for this year.
  • 6.0 mb/d: the predicted rise in world oil demand.
  • April 2022: the date after which the Declaration of Cooperation (DoC) producers will need to remain proactive and flexible to avoid market imbalance.

Sources:

  • Leadership Newspaper
  • OPEC secretary-general, Dr Mohammad Barkindo
  • Nigerian National Petroleum Corporation (NNPC)
  • International Oil Companies (IOCs)
  • Oil Producers Trade Section (OPTS)
  • Lagos Chamber of Commerce and Industry
  • Total Upstream Companies in Nigeria
  • TotalEnergies
  • Petroleum Industry Bill (PIB)
  • Federal Competition and Consumer Protection Act 2019
  • Declaration of Cooperation (DoC) producers

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