Nigerian oil tycoons and major oil exporting companies have developed cold feet over plans by the federal government to adopt and partner the United States on a new bill introduced by the U.S.
The bills seeks among other things, to bring to book corrupt oil exporters.
LEADERSHIP gathered yesterday that the Nigerian government through its embassy in the United States is already tracking the new legislation introduced late last month in the U.S that would require oil, gas and mineral companies traded on the U.S. stock exchange to publish details of their deals with foreign governments.
The bill, according to reports will not be limited to American firms only, but would cover any foreign company that is traded on the U.S. exchange or raises capital in the U.S and is thus required to file SEC reports.
Over 100 top oil companies would be affected by the bill designed to promote transparency, particularly in the oil industry, where corruption often keeps profits from trickling down to the local population.
The legislation co-sponsored by Senators Ben Cardin, D-Md., Russ Feingold, D-Wis., Richard Lugar, R-Ind., Charles Schumer, D-N.Y., Sheldon Whitehouse, D-R.I., and Roger Wicker, R-Miss. Is already receiving international support, especially by oil exporting countries which cannot account for all the huge monies they earn from oil exports.
Sarah Pray, the U.S. coordinator for Publish What You Pay, a coalition in 30 countries pushing for more accountability in extractive industries, was reported to have said that with the bill “Citizens can say, 'we saw you earned $7 billion last year, and we want you to manage it better,”
Experts consider the new U.S bill very significant for countries like Nigeria which is listed at the bottom of the Berlin-based Transparency International's 2008 Corruption Perception index.
Corruption and weak governance can dampen foreign investments, lead to poor industry management and fuel violence, particularly in Nigeria where there have been persistent crisis in its oil rich Niger Delta region leading to reductions in production and disabilities in global oil prices.
Analysts say that Nigeria needs to monitor the new U.S bill on corrupt oil exports as it coincides with the Nigerian Petroleum Industry Bill (PIB). The Nigerian government had proposed a Petroleum Industry Bill expected to revive the entire oil and gas industry in the country. Considering the importance of Nigeria in the global oil and gas industry, and also its crumbling oil and gas industry, due to militant activities in the Niger Delta.
The PIB has huge expectations attached with it as it is seen as a veritable avenue by the Nigerian government to restructure the oil and gas industry in the country and provide a lifeline to the indigenous oil sector.
However, with the higher taxes and royalties in the proposed bill, the fiscal terms for the international oil companies have been made tougher. Whether the PIB will successfully bring to an end the militancy problem in the Niger Delta region and reposition Nigeria in the international oil and gas market remains skeptical. Nevertheless, on paper, the bill provides strategies and tools for the transformation of the Nigerian oil and gas industry to stand the test of time.
Since 1956 when oil was first discovered in commercial quantity in oloibiri,in River State a huge revenue of over $400 billion accrued to the nation from petroleum exports. but this has not translated into physical development and most of Nigerians still live below poverty lines and this again underscores the need for Nigeria to evolve a strong law on its oil exports to ensure that revenues accruing to it from oil exports are ploughed back into the development of the country.
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Representative Chris Smith, Senator Roger Wicker, and Senator Ben Cardin participate in an OSCE Parliamentary Assembly Annual Session press conference in Baku, Azerbaijan. (June 2014)