The Nigerian Minister for Petroleum Resources, Emmanuel Kachikwu, has been quoted this week as saying the long-stalled Petroleum Industry Bill (“PIB”) should now be passed “quickly” after the “very contentious” fiscal element was split from the non-fiscal parts.
The PIB, which has had to be resuscitated several times since it was first tabled in 2008, aims to unify Nigeria’s disparate petroleum laws. It has been stuck in Nigeria’s legislature for 8 years, held up by a mixture of disputes about revenue sharing, royalty regimes and the role of the state oil company, the Nigerian National Petroleum Corporation (“NNPC”). We considered its progress previously here.
The comments come on the same day Kachikwu confirmed preparations were underway to sell part of NNPC’s business to the public. The partial IPO, which is forecast for 2018, is seen as a concluding step in a wider set of reforms to NNPC, which includes a plan to break the company into four separate entities. While this partial privatisation has been welcomed in some parts as a means of raising much-needed finance, it has also come in for criticism by labour unions who foresee corresponding job cuts.
Kachikwu, who served as OPEC President until December 2015 and is fresh into the Nigerian ministerial post, has also called for an emergency OPEC meeting to address the continued fall in oil prices. Nigeria is Africa’s biggest oil producer with petroleum exports accounting for 90% of its revenue. A lack of functioning refineries, however, means that it has to export most of its crude oil to fund its import of petroleum products.
The importance of fostering transparency in an industry desperately trying to keep a lid on costs is clear. President Muhammadu Buhari fired the 10-member board of NNPC in June last year in an anti-corruption drive. The question now will be whether the continued fall in oil prices is enough see the PIB adopted into law.