(Bloomberg) -- Nigerian President Muhammadu Buhari signed into law long-awaited legislation to overhaul the oil and gas industry in Africa's biggest crude producer.
Buhari assented to the so-called Petroleum Industry Bill on Monday, a month after it was voted through by both chambers of the National Assembly, presidential spokesman Femi Adesina said in an emailed statement. Buhari's government is banking that the reforms will attract a greater share of global capital allocated to fossil fuel projects.
Read more: Nigeria Lawmakers Finally Pass Key Oil Industry Overhaul
The bill was first presented to parliament in 2008 and is aimed at removing legal and regulatory uncertainty that's held back the industry's growth. While oil contributes less than 10% to Nigeria's gross domestic product, it accounts for nearly all foreign-exchange earnings and half of government revenue. The economic-growth cycle is closely linked to crude output.
Wrangling between politicians and complaints by oil companies scuppered previous efforts to update the regulations, a process that began almost two decades ago.
Firms active in Nigeria, which include Royal Dutch Shell Plc and Chevron Corp., secured some concessions after objecting to parts of the bill that was sent to parliament in September. Lawmakers lowered the levels of taxes and royalties originally proposed and decided that a “hydrocarbons tax” should not apply to deep offshore production.
Read more: Nigeria Lawmakers Approve Oil Law to Draw Foreign Investment
The law “will offer materially lower royalties and taxes for oil,” energy consultant Wood Mackenzie Ltd. said on Aug. 12. The government also hopes the legislation will incentivize investors to support its ambition to significantly increase Nigeria's natural gas output and consumption.
The law has left certain groups unhappy. Lawmakers from the oil-producing regions in southern Nigeria unsuccessfully lobbied for producers to allocate more money to funds set up to develop the communities hosting their operations.
Read more: Nigeria Oil Region Forum Rejects New Petroleum Bill
Fuel wholesalers and retailers fear a clause could hand Aliko Dangote, Africa's richest man, a dominant position over the sale of petroleum products in Nigeria.
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