UPDATE 4-Nigeria would turn NNPC into LLC, amend royalties under draft oil reform bill

(Adds confirmation from senate president, comment on timeline)
By Libby George
LAGOS, Sept 28 (Reuters) - Nigeria's long-awaited oil reform
bill would take steps to privatise the Nigerian National
Petroleum Company (NNPC), amend changes to deepwater royalties
made late last year and create new regulatory bodies, a copy of
the bill seen by Reuters showed.
President Muhammadu Buhari has sent the bill to the Senate,
Senate President Ahmad Lawan confirmed late on Monday. It, along
with the House of Representatives, must sign off on the bill
before it can become law. Nigeria is Africa's largest crude
exporter. L5N2GJ6E7
Lawan said the communication from Buhari would be officially
presented in the two chambers on Tuesday, and that they aimed to
pass the bill "as quickly as possible."
The legislation has been in the works for 20 years and looks
to revise laws governing Nigeria's oil and gas exploration not
fully updated since the 1960s because of the contentious nature
of any change to oil taxes, terms and revenue-sharing.
It proposes creating a limited liability corporation into
which the ministers of finance and petroleum would transfer NNPC
assets.
The government would then pay cash for shares of the company
and it would operate as a commercial entity without access to
state funds.
The changes could make it easier for the struggling company
to raise funds. However the bill does not require government to
sell shares in the company and, unlike previous reform
proposals, does not set a deadline for privitisation to be
completed.
The legislation would also amend controversial changes to
deep offshore royalties made late last year by cutting the
royalty that companies pay the government for offshore fields
producing less than 15,000 barrels per day to 7.5% from 10%.
It would change a price-based royalty too, so that it kicked
in when oil prices climbed above $50 per barrel, rather than
$35.
It would also codify in law that companies cannot deduct gas
flaring penalties from taxes, a practice that was the subject of
a court case.
The measure would also scrap the Petroleum Equalisation
Fund, which used to distribute cash to keep nationwide petrol
prices uniform, and create new regulatory bodies, scrapping the
Petroleum Products Pricing Regulatory Agency (PPPRA) and
transferring to a new commission many of the tasks currently
handled by the Department of Petroleum Resources (DPR).