* Draft law circulating, split into two bills
* Expected to be presented next week
* "Operators in Nigeria are waiting" - Total
By Libby George
ABUJA, Nigeria Feb 14 (Reuters) - A Nigerian oil reform two
decades in the making is urgently needed to get money into its
energy sector, industry executives say, as tax increases and
regulatory uncertainty scupper investments.
Africa's largest oil exporting nation has not carried out a
full revamp of the law underpinning its oil and gas sector since
the 1960s. Piecemeal tax hikes, and a growing lack of certainty
around terms, have made companies wary.
Government officials say a sweeping overhaul is imminent and
will be presented to the National Assembly next week, which for
industry leaders is not a moment too soon.
"It'd be challenging," Jeffrey Ewing, managing director of
Chevron Nigeria, said of investing without regulatory clarity.
"They're competing against the world."
Chevron CVX.N is selling assets in Nigeria. Total's
TOTF.PA stake in the profitable Bonga offshore field is also
on the block, while ExxonMobil XOM.N is looking to shed
Nigerian fields as part of a global retrenchment strategy.
Fiscal uncertainty has delayed a decision on a multi-billion
expansion, known as Bonga Southwest, by Royal Dutch Shell
RDSa.L and its partners.
Total Chief Executive Patrick Pouyanne, speaking to Reuters
in Scotland, said he took a forceful message to President
Muhammadu Buhari, who holds the oil portfolio.
"My message there was...please lift the uncertainty, because
today operators in Nigeria are waiting, which is not good for
the Nigerian economy," Pouyanne said. "It is not good for
investments in the country, so we are waiting."
PETROLEUM INDUSTRIES BILL
Minister of State for Petroleum, Timipre Sylva, said the
revised law governing oil and gas - dubbed the Petroleum
Industries Bill (PIB) - would be presented to the National
Assembly next week. The law governs virtually all terms of oil and gas – from
who allocates coveted exploration licences to where money goes
once it lands in government coffers.
A draft measure is circulating - divided into two bills, one
covering fiscal terms and the other the share that goes directly
to oil-producing communities. Both topics are contentious.
While unanimous that removing regulatory uncertainty is
crucial for investment, some companies also hope a new law will
make taxes and fees more transparent.
Nigeria last year hiked offshore oil royalties - changes
companies said rendered billions in planned investments
unprofitable. A VAT increase passed last month added costs too.
Consultancy Wood Mackenzie said offshore projects would, at a
minimum, be delayed. The changes contrast those in some other African countries
that are making exploration terms more attractive as they
compete for a limited pool of capital. Lower oil
prices and concerns about the future of fossil fuel because of
climate change are curbing the desire to invest.
Industry officials said NNPC head Mele Kyari had listened to
their concerns.
"We've given them (the Nigerian government) a tough message,
and that message has been received," an international oil
executive said, asking not to be named.
Speaking at the Nigeria International Petroleum Summit in
Abuja this week, Sylva said now the congress and the presidency
are held by the same party, it would be easier to avoid the bill
avoid getting stuck in "quicksand".
Kyari said there would be a clear fiscal landscape by June.
"Investors are not NGOs. When they are not sure of making
their money, they will walk away," Kyari said, adding: "They
will be assured that when they invest they can recover their
cost and they will make their margins."