The upper house of Nigeria's parliament, the Senate, has approved the second reading of an oil industry overhaul bill that has been stagnate for ten years, sparking a tiny bit of hope that the country's oil wealth may begin to be managed more efficiently.
The Petroleum Industry Bill envisages a complete reform of the sector, including separating the Nigeria National Petroleum Corporation into two entities, to make it easier to privatize one of them in the future, and the establishment of a regulatory commission to deal with relevant issues such as taxation and oil revenue distribution.
Senator Tayo Alasoadura, the sponsor of the bill, said, "The poor performance of the NNPC is a major concern. The commercialisation of the corporation and its splitting into two entities is for more efficiency and to enhance performance."
The NNPC has been plagued by corruption that cost the federal budget some US$20 billion (6.4 trillion naira) as of 2015, in addition to mismanagement and opaque revenue retention practices.
The other main point of the bill concerns the distribution of oil revenues: a problem that gave rise to the militant activity in the Niger Delta, according to some of the groups exercising this activity.
The most vocal - and active - among them, the Niger Delta Avengers, have repeatedly said their bombings of pipelines and other infrastructure aim to force the government to leave more of the petrodollars in the Delta, where the standard of life tends to be much lower than elsewhere in Nigeria.
The bill's second reading could be seen as an indication that the government is finally ready to address these urgent problems that have cost the country severe losses in oil production and hence revenues.
Earlier this week, President Buhari met with Delta community leaders who presented him with a list of demands, including oil companies operating in the region moving their HQ to the south, and the government removing army forces from the Delta.
The next stage of the bill's journey will be a review by a parliamentary committee, which will report on it in four weeks before the Senate grants final approval for the legislation.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More