Nigeria oil reform 'will free up funding'

Nigeria's sweeping oil reform bill should resolve the Opec member's chronic funding shortfalls which have stalled expansion in the country's energy sector, a senior lawmaker said recently.

The House of Representatives is expected in weeks to begin debate on the Petroleum Industry Bill, which would re-write Nigeria's decades-oil relationship with Shell, ExxonMobil, Chevron and other international players.

Lawmakers say the far-reaching legislation will resolve many of the sector's problems, including the country's inability to fund key energy projects.

"When it comes to raising funds for investment it won't be a problem. We have structured it in such a way that this won't be an issue," Bassey Otu, chairman of a joint petroleum committee working on the bill, told Reuters while in London.

He declined to elaborate on details of the bill since it has not yet been finalised.

State-run Nigerian National Petroleum Corporation (NNPC) is the majority shareholder in joint ventures with foreign oil companies like Shell and ExxonMobil, but has been unable to fund its share of investments.

Under the oil reform bill, NNPC would be transformed into a profit-driven company able to tap international capital markets for funding. The move could bring some of the biggest financing deals of their kind ever taken in Africa.

But the legislation has been delayed repeatedly because of disputes between government and oil firms over the fiscal terms for their operations.

Oil companies have warned the plans contained in the bill could threaten billions of dollars of investment if they go ahead in their current form.

"I believe we have bridged the gap between what the government and oil companies want. The fiscal terms we arrived at make Nigeria competitive and because we already have the infrastructure in place it is even more so," Otu told the news agency.

The Senate is finalising its own bill, which would need to be harmonized with the lower house's version before being sent to the president so it can be signed into law.

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