Accept higher taxes, Alison-Madueke tells oil companies

The Minister of Petroleum Resources, Diezani Alison-Madueke on Tuesday urged foreign oil companies in Nigeria to accept higher government revenues from crude production outlined in a draft Petroleum Industry Bill (PIB) being debated in National Assembly.

The Minister of Petroleum Resources, Diezani Alison-Madueke

Speaking at an economic summit in Abuja, Mrs Alison-Madueke said fiscal reforms in the proposed PIB, if passed, would be the most comprehensive in four decades.

She described the increased government takes from oil revenues in the PIB as small and said they were fair, given sustained higher oil prices.

“Nigeria is not alone in the tightening of fiscal terms,” she said. “The goal has always been to find a fair balance between the government and the contractors’ shares.”

President Goodluck Jonathan presented the bill to the National Assembly in August and it is still being discussed.

Oil majors have cried out about proposed tax terms in the bill, with Shell and ExxonMobil saying they would make exploration deep offshore, which is the key to growing Nigeria’s reserves, non-viable.

Nigeria’s tax and royalties regimes are complex and often highly secretive. Little is known about existing terms on offshore contracts, but oil majors say the PIB has worse terms than existing ones.

“The government is not in the business of oil and gas to make a loss for the country. At the same time, the intent is to remain competitive to attract investment,” Mrs Alison-Madueke told delegates at the conference.

She has said after the changes were made in the PIB, Nigeria’s “government take” on offshore projects would be around 73 percent, lower than in rival producers Angola, Norway and Indonesia.

“The PIB has been 12 years in the making. If it was such an easy bill, it would have been hashed out a long time ago,” the Minister said.

“I don’t think any position you take on a bill such as this could be perfect … but I think we did a fairly equitable job.”

The PIB’s comprehensive nature — comprising everything including fiscal terms, reform of the state oil company, penalties for environmental infractions and funds for communities living on oil fields — is partly why it has been so hard to agree on.

In a speech, the head of local operator Seplat Petroleum suggested the fiscal regime be hived off from the rest of the bill and quickly passed, to end uncertainty holding back billions of dollars of investment.

Mrs Alison-Madueke said this had been considered and rejected in the drafting of the bill, which would remain comprehensive.

Senate Committee summons Petroleum Minister over fuel scarcity

The Senate Committee on Petroleum Resources (Downstream) on Friday invited the Minister of Petroleum Resources, Diezani Alison-Madueke and the Group Managing Director of the Nigeria National Petroleum Corporation (NNPC) Andrew Yakubu, to a meeting on Tuesday to explain the reasons for fuel scarcity experienced in several cities across Nigeria.

The Minister of Petroleum Resources, Diezini Alison-Madueke

The committee also invited the Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Reginald Stanley along with other stakeholders in the petroleum downstream sector.

The Chairman of the committee, Magnus Abe, who personally signed the invitation letter, said the long queues of vehicles at filling stations noticed this week in Abuja and some cities in the country especially in Lagos “is unacceptable”.

He said “We thought that the era of Nigerians queuing at filling stations for indeterminate hours to procure PMS and other petroleum products, was indeed gone forever. It is, indeed, an embarrassment that precious man-hours are wasted in the quest to fulfil a basic need.

“What was initially perceived as a glitch in the distribution chain has now ballooned into queues in what now seems to be a gradual return to that inglorious era.

“The Senate Petroleum Resources Committee intends to engage those in charge with a view to ascertain and chart workable solutions to the challenges in the downstream sector.

“To this end, we will meet with the Petroleum Resources Minister, the NNPC GMD, PPPRA and other relevant stakeholders next week.”

Jonathan reconstitutes NNPC board

President Goodluck Jonathan on Monday approved the constitution of a new Board for the Nigerian National Petroleum Corporation (NNPC).

According to a statement by the Special Adviser to the President on Media and Publicity, Reuben Abati, the reconstition of the Board of the NNPC was in furtherance of Jonathan’s commitment to reform and the improvement of the oil and gas industry for the benefit of Nigerians.

The statement said the new Board would be made up of the Minister of Petroleum Resources as the Chairman; Permanent Secretary, Ministry of Finance as member as well as the Group Managing Director, NNPC as member.

Other members of the re-constituted board, according to the statement, are Alhaji Abdullahi Bukar; a former Head of Service of the Federation, Mr. Steven Oronsaye; Prof. Olusegun Okunnu; Mr. Daniel Wadzani; Mr. Bernard Otti (Group Executive Director, Finance and Accounts); and Dr. Peter Nmadu (Group Executive Director, Corporate Services).