PIB: FG Eyes $300bn Extra Income

The Federal Government stands to rake-in an instant extra revenue in excess of $300 billion from the oil sector once the much-expected Petroleum Industry Bill (PIB) is passed into law, so says the Nigerian National Petroleum Corporation (NNPC).
According to the Group Managing Director of NNPC, Dr. Mohammed Barkindo, the PIB shoot up government’s take from Joint Ventures and Production Sharing Contracts and eventually result in an extra income of over $300 billion in accruals into the federation account. The NNPC boss gave this insight at a workshop organised by NNPC in conjunction with the Federation Accounts Allocation Committee (FAAC) to enhance the understanding of the operations of the oil and gas industry in Nigeria.  
According to the general manager, planning of the National Petroleum Investment Management Services, NAPIMS (a subsidiary of the NNPC), Victor Briggs who gave a breakdown of the projected extra income, the PIB will boost accruals to government coffers from the deep water offshore operations from the current level of 32 percent to 72.3 percent.
He said the proposed law which is currently before the National Assembly is aimed at raising revenue to the national purse from onshore and shallow waters to 87.5 percent from the current 84 per cent.  “This is what we stand to lose if the PIB is not passed,” Briggs said.
Speaking in the same vein, the group general manager, Corporate Planning and Strategy and Director of NNPC Transformation, Dr. Tim Okon who also made a presentation, apart from increasing government take, the PIB would engender a fresh fiscal regime that would make it easy to calculate royalties by eliminating undue cost deductions.
“It will introduce same measurement point for royalty and taxes. The rates are reduced for small producers, meaning that government take in small fields will be minimal to take care of the heavy cost burden they bear and encourage marginal field operators. We are also going to have price sensitive royalty scheme that will capture future benefit of price increase,’’ Okon stated.