Nigeria Oil Region Forum Rejects New Petroleum Bill

(Bloomberg) -- A representative body for Nigeria's crude-producing region has criticized a new oil law in the West African nation and demanded an immediate review in a letter sent to lawmakers Monday.

“The kernel of the bill passed is to deny our people commensurate benefits of the resources of our region while using our natural resources to earn profits for everyone other than the Oil-Bearing Communities,” Edwin Clark, national leader of the Pan-Niger Delta Forum, said in the letter shared at a media briefing in Abuja, the capital. The group also known as Pandef, is a non-governmental organization that advocates for the interest of people in the oil-producing region in Africa's biggest economy.

The body questioned a provision setting aside 30% of the profits of the state-owned oil firm for crude exploration in frontier basins, warning that oil firms will face a difficult operating environment if the bill is not reviewed.

Lawmakers in Africa's biggest economy last week passed the long-awaited legislation to overhaul the oil and gas industry that the nation's leaders expect to unlock much-needed investment.

Nigeria started putting together the so-called Petroleum Industry Bill two decades ago and presented to lawmakers in 2008. It was supposed to remove legal and regulatory uncertainty that's held back the sector's growth in Africa's largest crude producer.

A clause in the bill that regions hosting oil facilities receive amounts equivalent to 3% to 5% of the oil companies' operating expenses is unacceptable, Pandef said. It insisted that oil-bearing communities must get not less than 10% of operating costs while the region must be allowed to participate in the ownership of oil blocks, marginal fields and a seat on the boards of the Nigerian National Petroleum Corp. and its subsidiaries.

“If this is not done, the Niger Delta people may be forced to take their destiny into their own hands and all IOCs may find themselves denied access to their oil activities in such communities,” Pandef said.