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Nigerian President Muhammadu Buhari on Monday signed the country's newly passed petroleum bill into law, marking the end of 20 years of efforts at Africa's top oil producer to overhaul its oil industry.
Last month, Nigeria's House of Representatives voted to approve a new petroleum industry bill in Africa's top oil producer and exporter, putting an end to 20 years of debates and delays.
The House voted in favor of the bill after the Senate had endorsed the new legislation earlier.
The new petroleum bill aims to attract more foreign capital to the country's oil sector, Nigeria says.
The Petroleum Industry Bill (PIB) has been two decades in the making to overhaul the way Nigeria will share its oil resources with international oil companies as the country looks to attract new investment in oil and gas.
International oil majors have not been flocking to Nigerian oil assets now that fossil fuels are even more fiercely competing for Big Oil's capital plans as majors start shifting more funding to low-carbon energy sources.
Oil firms operating in Nigeria, including Chevron, Shell, and TotalEnergies, have received some concessions in the latest version of the bill compared to a previous draft from last year, according to Bloomberg.
Nigeria has agreed to reduce the taxes and royalties and exempted deep offshore oil and gas production from the so-called "hydrocarbons tax."
Nigeria is set to struggle to raise oil output through the middle of this decade, as international majors shift their investment priorities, data and analytics company GlobalData said earlier this month. Lack of sufficient investments and few new projects could derail Sub-Saharan Africa's ambition to increase its crude oil production through 2025 after a difficult pandemic-hit 2020, GlobalData said in its report.
Nigeria has to address the above-ground risks for companies if it wants to attract investment, Conor Ward, Oil and Gas Analyst at GlobalData, said.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com