* Governance bill concerns state oil company
* Part of broader oil bill discussed for over a decade
* Governance bill needs lower house and presidency approval
(Adds analyst quotes, details, background and bullet points)
By Camillus Eboh
ABUJA, May 25 Nigeria's Senate passed a
long-awaited oil governance bill on Thursday which the president
of parliament's upper chamber said would improve transparency in
the OPEC member's energy industry and stimulate growth in the
The Petroleum Industry Governance Bill is one part of
proposed reforms that make up the sprawling Petroleum Industry
Bill (PIB), aimed at overhauling Nigeria's energy sector which
has been hobbled by corruption and mismanagement for decades.
The PIB, which has been discussed for over a decade
following several redrafts, is central to President Muhammadu
Buhari's reform plans because oil sales provide 70 percent of
government revenue in Africa's biggest economy.
"I believe not only Nigerians but investors in the petroleum
sector are looking forward to ensure accountability and
transparency," said Senate President Bukola Saraki after
announcing that the governance portion of the bill was passed
after its third reading.
He said it would "create the enabling environment for the
petroleum sector that would be necessary to further stimulate
growth", adding that he hoped it would attract investment.
The PIB, which covers an overhaul of the state oil company
to taxes on upstream projects, was broken up into separate parts
including governance and fiscal issues to help speed up debate.
The governance part deals with management of the Nigerian
National Petroleum Corporation (NNPC). The bill's backers have
said Nigeria's oil sector is in dire need of change, with power
currently concentrated in NNPC and the petroleum ministry.
The passed bill would create four new entities whose various
powers would include the ability to conduct bid rounds, award
exploration licences and make recommendations to the oil
minister on upstream licences.
It must be passed by the House of Representatives and the
lower chamber of parliament, and needs the approval of the
president before becoming law. Buhari is on medical leave in
Britain and has handed over power to his deputy, Yemi Osinbajo.
Uncertainty over fiscal terms in the industry have held back
billions of dollars of investment.
Rolake Akinkugbe, head of energy and natural resources at
FBN Merchant Bank, said changes at the state oil company gave a
"signal" regarding the investment climate in the oil sector.
"NNPC has an extensive network of energy infrastructure that
needs to be rehabilitated, providing an entry platform for
private investors. The private sector will want to see how these
reforms are implemented on a day-to-day basis," she said.
Aaron Sayne of the Natural Resource Governance Institute, a
non-profit group that advises nations on how to manage natural
resources, said the bill was very broad.
"A lot of the big decisions, especially on the national oil
company, are to be determined," he said.
(Additional reporting by Alexis Akwagyiram and Libby George in
London; editing by Susan Thomas and David Evans)