'Nigeria needs reforms before new round'

Nigeria will not hold a major oil licensing round until wide-ranging reforms to Africa's largest oil and gas industry are passed into law, an aid to the country's president has said.

 

The long-delayed Petroleum Industry Bill (PIB), which aims to solve funding problems and boost Nigeria's oil and gas output, has been subject to numerous revisions and it remains unclear when the reforms will be passed.

The Opec member holds periodic licensing rounds for new blocks and has said the next will be a chance for domestic companies and foreign companies new to Nigeria to gain a foothold.

Officials have said the next auction is likely to be for both onshore and offshore fields totalling at least two billion barrels.

The fact the PIB is delaying a possible licensing round highlights oil executives uncertainty over the passage of the legislation, which they believe has meant billions of dollars of potential investment are on hold.

One of the major concerns raised by international oil companies was the planned increase in government tax on deep offshore projects, where Nigeria expects to see much of its production growth in the coming years.

Tim Okon, group general manager for strategy at Nigeria's state-oil company, told a London conference today the increase on existing deep offshore projects would be to 60 per cent to 70 per cent from a current 50 per cent.

Hassan Tukur, principal secretary to Nigerian President Goodluck Jonathan said that the most recent delays were the result of the political calendar, not revisions during the consultation process with international oil companies.

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