Nigeria’s House of Representatives on Friday passed a reconciled version of the Petroleum Industry Bill (PIB), which provides 3 percent of the operating cost to host oil producing communities.
The long awaited petroleum industry legislation is seen as the magic wand to attract waning investment to the country’s ageing oil sector.
The Senate had on Thursday passed the bill before proceeding on two months vacation, but the lower chamber shifted debate on the bill amidst rowdy session over disagreement on the percentage to be allocated to the host commnuities.
Both parliamentary chambers had passed the bill this month, but approved different amendments, which required harmonisation between lawmakers from the two chambers.
The reconciled bill which would be sent to the president now contain harmonised position of a 3 percent share of the annual operating expenditure of oil companies to communities where petroleum is produced.
The house had approved a 5 percent share, and the difference had been a sticking point in the reconciliation process.
With the consensus by the two chambers of the parliament, the PIB could now be sent to the president for his signature.
The Bill, which has been in the works for 20 years, is the first sweeping update to the laws that govern everything from oil drilling to fuel sales in Africa’s largest oil exporter in decades.
Experts said the package is crucial to enable Nigeria to develop its oil and gas before they effectively become stranded assets as the world moves towards cleaner energy.
The final package also included clauses that would require licences to import fuel, and direct the regulator issuing the licences to give preference to those with domestic refining capacity.
Those clauses are widely viewed as an effort to boost the Dangote Group, whose billionaire founder Aliko Dangote is building a 650,000 barrel per day (bpd) refinery on the outskirts of Lagos.
Only 23 other companies have refining licences, and most of them produce less than 12,000 bpd, leaving Nigeria to import nearly all of the fuel it consumes.
Revisions to the original language would allow international traders to seek import licences. But unions and groups representing fuel marketers decried the import licences as anti-competitive.