A Petroleum Industry Bill now under consideration in Nigeria could result in losses to the country of up to $185 billion over the next ten years.
Mark Ward, Exxon Mobil’s Nigerian unit managing director, said the proposal to raise taxes on exploration and production could cause a 25% decrease in oil production. The decrease will come in the wake of reduced investments if the proposal becomes law.
The bill, Ward said, would lift the government’s take to 96% for oil and from 30% to 80% for natural gas. The size of the increases would likely make it uneconomical for most companies to continue Nigeria exploration.
Ward said the proposal will increase royalties, increase taxes, and lower allowances or incentives — all at the same time. This would conclusively make Nigeria one of the world’s harshest fiscal regimes, he said.