FG Backs Fiscal Terms In PIB

The physical terms proposed in the Petroleum Industry Bill (PIB) have been described as fair as when compared to other countries, Nigeria still remain one of the most attractive, the petroleum minister, Mrs Diezani Alison-Madueke has said.

Speaking during a panel discussion on “PIB And The Future of Nigeria’s Oil Industry” at the 18th Nigeria Economic Summit in Abuja recently, Alison-Madueke said the total government share of oil revenue after all taxes and royalties was 73 per cent up from 61 per cent in the current bills with major oil companies.

She said it was not only Nigeria that was tightening fiscal terms and explained that the goal was to achieve a “fair balance between government and contractor share to ensure that risks do not outweigh rewards.”

She stressed that the fiscal terms were fair but assured that they would still continue discussion with the partners to find ways in which both sides of the scale can  go forward.

The Petroleum Minister disclosed that all cost based incentives were replaced with production based incentives as government revenue comes from production.

She further said that the draft bill which is still before the National Assembly introduced a price-based royalty for crude prices beyond $70 per barrel, adding that the present deep water terms were negotiated in 1993 when oil prices were $20 per barrel.

“Session 16 of the Deep Offshore Act prescribed that changes be made to this particular fiscal regime to restore benefits to the government commensurate with increased oil prizes, once oil prizes has exceeded $20 per barrel in real term,” she explained.