Nigeria’s Petroleum Industry Bill
The The Petroleum Industry Bill of 2012 (PIB) provides a legal, fiscal and regulatory framework for the Nigerian petroleum industry. In July of last year, the PIB was forwarded to the National Assembly for consideration and passage into law. of 2012 (PIB) provides a legal, fiscal and regulatory framework for the Nigerian petroleum industry. In July of last year, the PIB was forwarded to the National Assembly for consideration and passage into law. The Bill proposes several solutions to some of the most pressing challenges facing the Nigerian Petroleum Industry, and represents a massive piece of sector reform.
One of the major objectives of the PIB is to establish a progressive fiscal framework that will encourage further investment in the petroleum industry while optimising revenues accruing to the Government. The Bill seeks to achieve the objective by revising the fiscal regime in the petroleum industry. However, it remains to be seen if the revised fiscal regime will encourage further investment in the industry.
Key objectives outlined by the PIB:
- The establishment of accountability and transparency
- Creation of an attractive environment for investment
- Establishment of an adaptable and competitive fiscal framework
- Encourage exploration and utilization of Nigeria’s petroleum resources
- Improve gas supply for both domestic use and to further industrialization aims
- Improve efficiency and effectiveness of regulatory institutions
Critical review of PIB required
It is conceded that the version of the PIB that will be eventually passed into law may be different from the current version submitted to the National Assembly.
Companies engaged in upstream petroleum operations and other stakeholders in the Nigerian oil and gas industry, will be well-advised to critically review (and simulate) the impact the PIB will have on their operations if enacted in its current form. This is necessary to ensure that crucial issues are raised and addressed before the Bill is passed by the National Assembly and signed into law by the President.
KPMG Nigeria has outlined key fiscal provisions of the Bill and their implications in the download available below.Download