Friday, April 16, 2010

Nigeria Will Discuss Oil Law Concerns With Majors

By Dulue Mbachu

April 15 (Bloomberg) -- Nigeria will hold talks with international energy companies to address their concerns over a proposed oil law, said Shehu Ladan, head of state-owned National Petroleum Corp.

“The door is not yet closed,” Ladan told reporters today in Lagos. “In the next couple of days we’ll be able to sit down with all major oil companies and iron out finally those aspects of the bill that they have problems with.”

The proposed law seeks to change the way Nigeria’s oil and gas industry is regulated and funded, creating “independent joint ventures” that can raise investment funds from financial markets while increasing taxes and royalties to the government. Oil companies say the proposed fiscal regime makes it unprofitable to invest in deep water offshore Nigeria.

Royal Dutch Shell Plc, Exxon Mobil Corp., Chevron Corp., Total SA and Eni SpA run joint ventures that produce most of Nigeria’s oil in which National Petroleum, or NNPC, has an average stake of 59 percent. Nigeria vies with Angola to be Africa’s top oil producer and is the fifth-biggest source of U.S. oil imports.

The bill in its current form will cut about $50 billion in planned investments from energy companies, Shell said Feb. 24. While the proposed law will increase the government’s share of oil revenue to 71.7 percent from 45 percent, Ladan said today. That compares with 53.6 percent in the Gulf of Mexico, 73.1 percent in Angola and 74.9 percent in Norway, he said.

Ladan, who retired as a senior executive of the state oil company last year, was appointed to the top job by acting President Goodluck Jonathan on April 6, replacing Mohammed Barkindo. Jonathan also fired former Oil Minister Rilwanu Lukman and appointed Diezani Allison-Madueke, a former executive of Shell’s Nigerian unit, in his place.

--Editors: Rob Verdonck, Jonas Bergman.

To contact the reporter on this story: Dulue Mbachu in Lagos at

To contact the editor responsible for this story: Stephen Voss at

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