The Honourable Minister of State for Petroleum Resources in Nigeria, Timipre Sylva, revealed some of the things to be expected in the proposed Petroleum Industry Bill (PIB).
He made this known while speaking as a guest of the largest grouping of oil industry technical personnel, the Nigerian Association of Petroleum Explorationists (NAPE).
The Bill is set to undergo a series of reading at Parliament soon. He touched on various issues relating to the Bill and how they have been properly addressed.
Read excerpts from his submission below:
“In the short term, the government will need a maximum fiscal environment to deal with the COVID-19 crisis.”
“Lowering of royalties is contemplated, particularly for low levels of production per field. It is therefore our hope that the future is more positive and attractive for the Nigerian petroleum industry after the passage of the PIB.”
On the taxes on onshore water operation, he said the relevant authorities are “not unmindful that the industry players are of the view that the current level of taxation on onshore and shallow water operation is excessive. Therefore, proposed petroleum industry bill (PIB) should include the significant lowering on these taxes for new investments and for existing operations.”
“We are proposing in the new law, a grandfathering [which] will preserve current government while also guaranteeing investors return. It also guarantees that investors can continue with existing operations while earning favourable returns.”
On the PIB framework, he said it will “be based on core principles of clarity, dynamism, neutrality, open access and fiscal rules of general application.”
Investments in new equities “will be encouraged with attractive competitive terms in order to achieve economic growth. Investors in existing assets will be able to sign conversion contracts to obtain better terms for existing production and be able to explore and produce parts of the existing blocks under the new terms. Investors that also want to continue operating under current fiscal terms can elect to do so (I already mentioned that).”
“Host communities will be adequately covered to foster sustainable prosperity within the communities, provide direct social and economic benefits from petroleum operations to the host communities.”
