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See more Images of April Follow Reuters Facebook Twitter RSS YouTube Read Powerful "Flame" cyber weapon found in Iran 28 May 2012 Romney tells vets dangerous world demands powerful military 28 May 2012 Fukushima radiation seen in tuna off California 28 May 2012 UK has changed for worse under Queen Elizabeth: poll 28 May 2012 Justin Bieber accused of battering man taking photos 28 May 2012 Discussed 106 Romney tells vets dangerous world demands powerful military 104 Iran has enough uranium for five bombs: expert 92 Protests planned after minister calls for gays to be fenced in Watched One stray dog's incredible journey with Chinese cyclists Sun, May 27 2012 A look at the UK’s most beautiful face Thu, May 10 2012 Cruise ship crunch Sat, May 26 2012 Analysis: Nigeria oil bill waters down its reforms Tweet Share this Email Print Factbox Factbox: Nigeria's draft Petroleum Industry Bill Thu, May 24 2012 Related News Exclusive: Draft of Nigeria oil bill being finalized Thu, May 24 2012 Exclusive: ConocoPhillips looking to exit Nigeria: sources Tue, May 8 2012 UPDATE 4-Statoil to drill with Rosneft in Russian Arctic Sat, May 5 2012 Special Report: Inside Chesapeake, CEO ran $200 million hedge fund Wed, May 2 2012 Analysis & Opinion Essential reading: Union, liberal coalition pushes Obama tax plan, and more Essential reading: Greeks stop paying taxes, Nancy Pelosi’s rich tax, and more Related Topics World » By Joe Brock ABUJA | Tue May 29, 2012 4:02am EDT ABUJA (Reuters) - Nigeria's long-awaited oil law, when it finally comes, looks likely to be a botched job that gives favorable tax terms to foreign oil firms while doing little to satisfy calls for transparency and reform of a corrupt and wasteful sector. A new draft of the long-awaited Petroleum Industry Bill (PIB) is close to being finalized, potentially ending years of uncertainty that has blocked billions of dollars of investment. Licensing rounds, contract renewals and investment have been put on hold for five years pending the new bill to regulate Africa's top oil and gas industry. Passing the bill will allow such work to resume. But provisions that would have forced the government to publish how much oil it pumps and all the payments it receives from oil firms - in an industry where secrecy is blamed for corruption - have been stripped from the bill. "I expect the petroleum industry to be happy. I expect many Nigerians to be upset," said Pedro Van Meurs, an oil and gas expert who has consulted with the government on the PIB. "Transparency provisions related to corporate income tax, hydrocarbon tax and production sharing were deleted. This should be a source of concern." The PIB is meant to change everything from fiscal terms to overhauling the Nigerian National Petroleum Corporation (NNPC). Its comprehensive nature caused years of disputes between lawmakers, ministers and oil majors. The latest copy proposes some changes that will improve transparency: keeping royalty payments secret will not be allowed, for instance. Oil company profit taxes proposed in the bill are also in the public domain for the first time. But it does not require disclosure of oil sales, of other taxes like income and hydrocarbon tax, nor of payments to the government, including signature bonuses. Openness on such subjects is vital to clean up the energy sector, say campaigners. President Goodluck Jonathan commissioned a task force in January to fast-track a new copy of the PIB, which makes the passage of this condensed version more likely, even if the national assembly debate on it takes a while. Jonathan said on Tuesday the new PIB would be sent to the national assembly next month. "Passage of any piece of legislation brings a level of certainty to the industry that has been absent for years," said Gordon Bottomley, Nigeria analyst at Ergo, a New York-based advisory firm that has been closely tracking the PIB. "(But) the re-organization of ... Nigeria's oil and gas industry is going to be far from painless. And this bill, in terms of transparency, appears less than desirable." NEW POWERS FOR MINISTER The bill also gives the oil minister new supervisory powers over all industry institutions, including a new regulator to police downstream and upstream, raising concerns about checks and balances. Lawmakers had rejected drafts that did this in the past. It says anyone who "interferes" with the minister will be fined or imprisoned. And it allows the oil minister and the directors of state institutions to receive gifts, which will not please civil society groups calling for an end to graft. Foreign oil companies like Shell, Chevron and Exxon will be relieved that tax changes are more favorable compared with previous versions. This could be a sticking point with lawmakers seeking a better deal for Nigeria. Analysts say that the taxes foreign firms pay on profits onshore, which will be published under the PIB, will amount to a big cut from the taxes that are now levied in secret. Furthermore, the cut will apply both to existing fields and to new fields, unlike in earlier versions of the law which cut taxes only on new fields, the analysts say. Van Meurs says the government could lose 20-50 percent of its tax revenue per barrel on existing assets. NATIONAL OIL COMPANY Detail is thin on plans to partly sell off the mismanaged NNPC, seen by experts as the biggest barrier to progress. Nigeria exports some 2 million barrels per day (bpd) but could double that with a better-managed state oil firm able to pay for its share of joint ventures, foreign oil majors say. NNPC was last month described by parliament as "answerable to no one" in a probe into a $6.8 billion fuel subsidy fraud. It is accused by oil traders of owing billions in unpaid bills. The NNPC rejects allegations of corruption or insolvency. The PIB proposes a new National Oil Company (NOC), which will within three years be partly listed, in theory leading to much-needed accountability. But the PIB isn't clear on what assets the NOC gets. The old NNPC would still exist and keep joint ventures and production sharing contracts with oil majors, which cover the majority of Nigeria's known oil and gas reserves, for an indefinite period. "For arguably the most important element of the bill, it is worrying the section on NNPC is both brief and vague," an executive at an oil major operating in Nigeria said. There is also no domestic gas pricing in the bill, which is key to unlocking the world's seventh largest gas reserves. Left in doubt are onshore licenses Oil Minister Diezani Alison-Madueke is in the process of renewing. She signed a 20-year one with Exxon worth trillions of dollars in February and has promised to do the same with Shell and Chevron by June. It has not been made clear whether they will include clauses exempting them from the PIB, in which case a huge portion of the oil business would not be governed by the new bill. "It's meant to be single framework for everything in oil and gas. If you are going to have it but then do a special deal for, say, Exxon ... That would be a huge departure from what the bill was meant to be," said Antony Goldman, head of PM Consulting. (Additional reporting by Tim Cocks in Lagos; Editing by Tim Cocks and Peter Graff) World Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above. 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