Petroleum and Natural Gas Senior Staff Association of Nigeria and Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) have called for a lower tax rate for deep offshore operations in Nigeria.
The unions, in a joint memorandum on the Petroleum Industry Bill submitted to the Ad Hoc Committee on PIB for the public hearing on the bill stated that lower tax rate will attract more investments in deep offshore terrain.
The unions, which said the 10 per cent proposed by the bill for deep offshore operations was too high, called for the rate to be reviewed down to 7.5 per cent.
“New licences and leases in deep offshore should have a lower hydrocarbon tax rate than old leases to attract more investments in deep offshore terrain,” they said.
They also called for a single regulatory model by having the Nigerian Petroleum Regulatory Commission to regulate upstream, midstream and downstream petroleum operations.
All functions of the Department of Petroleum Resources (DPR), Petroleum Products Pricing Regulatory Agency ( PPPRA) and Petroleum Equalisation Funds are to be taken over by the Nigerian Petroleum Regulatory Commission, according to the unions.
The unions also called for the inclusion of the Trade Union of Nigeria, Nigerian Labour Union, NUPENG and PENGASSAN to the board of NNPC.
In its memorandum on the bill to the committee, Total Nigeria faulted the fiscal terms in the bill, describing it as “globally uncompetitive.”
“The investments made by Total and OML 130 partners will be excessively penalised by the new PIB as drafted today, particularly the recent Egina project which has been in production for around 2years. The proposed changes in the fiscal framework undermine our investment in Nigeria and are unfair and contrary to the spirit of the ‘contract’ between the FGN and the Egina investor group. Moreover, the bill will endanger the viability of further developments on the block,” the oil giant said.
“The deep offshore fiscal terms combined with the harsh PSC2005 have failed to deliver any major new developments. Following the Deep Offshore and Inland Basin Production Sharing Contracts Amendment act, and the Finance Act that was passed in 2019 and 2020, Nigerian terms are even less competitive than other investment destinations in Africa where terms have recently been improved.”
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