Key provisions in Nigeria’s long-sought oil overhaul

Nigerian legislators sent a sweeping oil industry overhaul bill, in the works for 20 years, to President Muhammadu Buhari for his signature last week. The president is expected to sign it. The package sweetened terms for oil majors but included provisions that could foster resentment in oil-producing communities. Below is an outline of some key provisions.

ROYALTIES AND TAXES

Oil majors successfully pressed for several changes, arguing that Nigeria, Africa’s largest oil exporter must become more competitive to attract a shrinking amount of fossil fuel development money.

The package would:

* Reduce oil royalty rates by 2.5-3.5% from the original proposal, for onshore, shallow water and deepwater oil production.

* Remove additional hydrocarbon taxes of 5%-10% on deepwater licences and lower the hydrocarbon taxes for onshore and shallow water licenses. Producing companies also pay a 30% corporate tax.

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Source: SweetCrudeReports

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