Nigeria's two houses of parliament passed the Comprehensive Oil and Gas Sector Bill. This is an ambitious law that President Muhammadu Buhari has been promoting since September 2020.
The Nigerian Oil and Natural Gas Production Reorganization Act is officially since yesterday, awaiting the ratification of the president. This exhaustive and original law was in the sights of the President of Nigeria, Muhammadu Buhari, for almost a year. It is a program to regulate industrial and artisanal production of petroleum in Nigeria. Which will make it possible, in particular, to fight against tax evasion, and to legalize the artisanal extraction and refinement of gas and oil.
Members of both parliamentary chambers have reviewed certain details of the law. Like allocations from oil-producing communities. As well as the ceiling for private financial investment in the development of fossil fuels. However, the law on hydrocarbons fills most of the legal loopholes in this area. It will also make it possible to legalize artisanal extraction and provide illegal workers with rights, which until then did not exist.
Remember also that this law would largely remedy serious crime in Nigeria. Indeed, the activity of armed terrorist and insurrectionary groups often revolves around the control of deposits. These groups use the illegality of the activity of clandestine workers and villagers to secure a share of the profit against “protection”.
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It is therefore a law with several dimensions. And its imminent ratification would solve a conglomerate of problems for President Buhari and his government. In order to agree on the institutional details for the application of the law, a high-level meeting was held today, between the heads of parliamentary blocs, the Minister of Petroleum and the President of the NNPC. It is therefore not a sham law. And this legal framework will abolish several controversies over the illegal exploitation of hydrocarbons in Nigeria. It also provides for an increase in the share of oil wealth allocated to the regions, between 100% and 270% depending on the region.
According to Reuters, disagreements with northern governments were also resolved in record time. Diplomats from Borno, Yobe, Bauchi and Kaduna accepted the terms of the parliamentary committee. And this, after several meetings preceding the vote on the law in the Senate. The law also stipulates a series of regulations which arrange the oil majors. In return, the latter agreed to be more transparent and regular on the payment of taxes. The state-owned NNPC also signed on to control the government's sale of shares, in addition to permission from the ministries of finance and petroleum.
Then, in addition to the private investments expected by this law, it would help to compensate for the lack of liquidity. By protecting artisanal producers, the state also ensures control over currency exchanges in rural areas. Not to mention, above all, the encouragement of these producers to join the national economic cycle, and what this will bring to the fight against cross-border crime.