AfrOil: Nigeria adds tax, royalty cuts to PIB

Nigeria’s government has reportedly agreed to revise provisions of the Petroleum Industry Bill (PIB), the oil and gas law now under discussion in the National Assembly.

Sources closely involved with the legislation told Reuters last week that Abuja had acceded to requests from international oil and gas companies (IOCs) for reductions in royalty and tax rates. The PIB is now slated to bring the hydrocarbon tax rate for converted leases down from 7.5% to 5% and will also cut the royalty rate for new production streams from deepwater oilfields from 42.5% to 30%, they said.

Additionally, they said, the government has changed the PIB in order to establish a guarantee that all assets currently owned by Nigerian National Petroleum Corp. (NNPC) will be transferred to a limited liability company once the new law takes effect. The transfer is expected to help IOCs collect debts owed by NNPC, Reuters noted.

Officials in Abuja hope the change will help attract more foreign investment to Nigeria’s oil and gas industry.