Oil and Gas Amendment May Not Come True

There are some strong indications that Nigerian Oil and Gas Industry Content Development Act (Amendment) Bill might fail, as stakeholders, currently working to cut the cost of producing oil from $30 to $10 per barrel, have started mounting pressure against it.

Unlike the Petroleum Industry Bill, PIB, which focuses on the restructuring and management of the entire oil and gas industry, the Nigerian Oil and Gas Industry Content Development Act (Amendment) Bill, sponsored by the Chairman, House Committee on Local Content, Legor Idagbo, seeks to increase the contribution of oil companies to Nigeria Content Development Fund from one percent to two percent.

The bill, which also seeks an additional 0.5 percent of oil firms’ gross revenues for Research and Development, has already scaled through it’s second reading in the House of Representatives and set for a public hearing.

Nevertheless, many stakeholders, including the Federal Ministry of Petroleum Resources, Nigerian National Petroleum Corporation, NNPC, International Oil Companies, IOCs, indigenous oil and gas producers and services providers, are opposed to the bill, especially now that the price of oil remains relatively low at less than $40 per barrel.

They are also opposed to it as they feel that the one per cent provided for in the current Act is adequate in assisting to expand and deepen Local Content issues in the oil and gas industry.

Ayooluwa Joshua