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THE NIGERIAN PETROLEUM INDUSTRY BILL: AN EVALUATION OF THE EFFECT OF THE PROPOSED FISCAL TERMS ON INVESTMENT IN THE UPSTREAM SECTOR
Abstract
The international oil companies (IOCs) in Nigeria have expressed concern over the federal government’s intention to change the laws governing the oil and gas industry including the fiscal terms. They claim that the proposed fiscal terms will affect their bottom line and trigger uncertainties in their investments in the upstream sector. Therefore, this research was conducted with the aim of evaluating the effect of the proposed fiscal terms on upstream petroleum investment, in which the IOCs are involved. Hence, document analysis and economic indicators of investment profitability were employed in the conduct of this study. The results show that, even though petroleum projects remain profitable under the proposed fiscal terms, the lack of fiscal stability will negatively affect investment at least in the short term. This study should be of assistance to policy makers, legislators, industry regulators and other stakeholders to better appreciate the implications of the PIB-proposed fiscal system and terms on investment in the upstream petroleum sector.
Keywords: Nigerian petroleum industry bill, upstream sector, the international oil companies