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Observers say PIB’s approval essential to Nigeria attracting a shrinking pool of capital for fossil fuel development, Naija247news reports.

Both chambers of Nigeria’s parliament have passed a bill that overhauls nearly every aspect of the country’s oil and gas production, putting a project that has been in the works for two decades one step closer to presidential sign-off.

Legislators have been hashing out details of the bill since President Muhammadu Buhari presented an initial version in September last year, but an overhaul has been in the works for some 20 years.

The chambers had been expected to vote clause by clause on the more than 400-page long report, but instead quickly voted on the full package.

Each chamber made some changes before approving it, meaning they will need to meet again to hash out the details, which members said would begin next week, before it is submitted for presidential sign-off.

Earlier in the day, members of the senate had entered a closed-door session with the petroleum minister and the head of state oil company NNPC for a briefing on the technical terms and details.

The last key controversies related to the share of wealth for communities in areas where petroleum is produced, and those in the northern and central parts of Nigeria where there is exploration but no production yet.

A copy of the technical report submitted to parliament and seen by Reuters proposed the share of regional oil wealth generated from production that host communities can claim would increase from 2.5% to 5%. They had pushed for a 10% share.

Key changes to the bill would lower the royalties for new production from deepwater oilfields to 5% from 7.5% and boost the production level that triggers higher royalties from 15,000 barrels per day (bpd) to 50,000 bpd.

For onshore and shallow water oilfields, it would reduce the hydrocarbon tax to 30% for converted leases, down from 42.5% in the original bill.

Sources said disagreements with northern leaders were managed separately following several hours-long sessions between them and federal government officials early this week.

The proposal also includes a string of changes sought by oil majors, including amended royalties and fiscal terms for oil and gas production, and the transfer of state oil company NNPC’s assets and liabilities to a limited liability corporation created by the bill.

Leaders agreed earlier this year to sweeten the terms for oil companies in an effort to attract much-needed investment in an era of shrinking global cash for fossil fuel production

NEED TO ATTRACT INVESTMENT

Last year, oil industry analysts Wood Mackenzie had said Nigeria’s oil output could fall sharply without reforms.

Gail Anderson, research director with consultancy Wood Mackenzie, said of the changes to the bill: “It shows that (the government) listened. They recognise the need to attract investment, not just in the Nigerian context but globally in the energy transition,” Anderson said.

“The competition is going to be more intense, and this is a move in the right direction to attain and attract investment.”

But Anderson also said that not all the gas terms in the bill were good enough to spur development, which Nigeria has said it wants for its “decade of gas.”