* Petroleum bill reforms fiscal terms, state oil company
* Majors have complained about higher government revenues
* ExxonMobil urges a more "competitive fiscal package"
By Tim Cocks
ABUJA, Dec 4 Nigeria's oil minister urged
foreign majors on Tuesday to accept higher government revenues
from crude production outlined in a draft oil bill, but
ExxonMobil said that the new terms risked stifling investment.
Speaking at an economic summit in Abuja, Diezani
Alison-Madueke said fiscal reforms in the proposed Petroleum
Industry Bill (PIB) would be the most comprehensive in four
She described the increased government take from oil
revenues in the PIB as small and said they were fair, given
sustained higher oil prices.
"Nigeria is not alone in the tightening of fiscal terms,"
she said. "The goal has always been to find a fair balance
between the government and the contractors' shares."
President Goodluck Jonathan presented the bill to parliament
in August and it is still being discussed.
Oil majors have cried out about proposed tax terms in the
bill, with Shell and ExxonMobil saying they
would make exploration deep offshore, which is the key to
growing Nigeria's reserves, non-viable.
Nigeria's tax and royalty regimes are complex and often
highly secretive. Little is known about existing terms on
offshore contracts, but oil majors say the PIB has worse terms
than existing ones.
"The government is not in the business of oil and gas to
make a loss for the country. At the same time, the intent is to
remain competitive to attract investment," Alison-Madueke told
delegates at the conference.
She has said after the changes were made in the PIB,
Nigeria's "government take" on offshore projects would be around
73 percent, lower than in rivals Angola, Norway and Indonesia.
Nigeria is Africa's biggest oil producer, exporting more
than 2 million barrels per day (bpd), and it also holds the
world's ninth largest gas reserves, but years of uncertainty
over the fiscal terms of the PIB have discouraged investment.
"The PIB has been 12 years in the making. If it was such an
easy bill, it would have been hashed out a long time ago,"
"I don't think any position you take on a bill such as this
could be perfect ... but I think we did a fairly equitable job."
The managing director of ExxonMobil's local unit, Mark Ward,
said worse terms would discourage investment.
"Quite frankly some of the thresholds that have been laid
out ... are not something I think any businessman in this forum
here would invest in," he said. "The risk ... that is involved
in it versus the return ... it's safer to drop it in the bank."
Investment was needed to stop output falling, he said.
"It takes an overall competitive fiscal package to be able
to continue to grow ... If the government gets a bigger piece of
a much smaller pie, that's not the right answer."
Exxon signed 20-year oil licence renewals on Nigerian
onshore assets producing around 550,000 bpd in February, and
other oil majors are also seeking renewals. It is not clear
whether that these would fall under the PIB.
"You can change laws ... but changing contracts by
legislative fiat is a very dangerous thing," Ward said.
The PIB's comprehensive nature -- covering everything from
fiscal terms and reform of the state oil company to penalties
for environmental infractions and funds for communities living
on oil fields -- is partly why it has been so hard to agree on.
In a speech, the head of local operator Seplat Petroleum,
Austin Avuru, suggested the fiscal regime be hived off from the
rest of the bill and quickly passed, to end uncertainty holding
back billions of dollars of investment.
Alison-Madueke said this had been considered and rejected in
the drafting of the bill, which would remain comprehensive.
Alison-Madueke told Reuters after the panel that Nigeria
still hoped to hold a licensing round for marginal oil fields by
the end of the year.