The Nigerian president has signed into law the Petroleum Industry Bill (PIB) 2021, which provides legal, governance, regulatory and fiscal framework for the oil sector (Nigeria). The text was previously approved by the National Assembly and the Senate. The country has been seeking to pass the bill since 2008 but failed to do it in three occasions: 2009, 2012 and 2018.
The text sets royalty rates at 2.5-5% for natural gas, 7.5% for deep offshore and frontier basins, 12.5% for shallow water and 15% for onshore areas and collect a hydrocarbon tax of 15-30% on profits from crude oil production as well as a levy of 1% on the wholesale price of petroleum products. The law forces upstream companies to remit between 3% and 5% of their operational expenditures to host communities.
In addition, the text will transform the state-owned Nigerian National Petroleum Company (NNPC) into a limited company, will create a Nigerian Upstream Regulatory Commission, and a Nigerian Midstream and Downstream Petroleum Regulatory Authority. The NNPC Limited is expected to earn 10% of proceeds of the sale of profit oil and profit gas as management fee.
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