Name: Nigerian lawmakers vote to increase deepwater royalties
Brand: Wood Mackenzie
SKU: 119505
Price: 1350 USD
Availability: OnlineOnly
Author: Wood Mackenzie

Insight 04 November 2019

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Report summary

On 29 October, Nigeria's National Assembly voted through the first ever change to royalty within the Deep Offshore and Inland Basin PSC Act. The whole process took just 26 days, taking the industry by surprise. The key points of the amendment bill are: It removes the current water depth-based royalty and replaces it with a uniform 10% royalty for all deepwater PSCs. It introduces a price-based royalty which will add 0% to 10% depending on oil price. The terms can be reviewed every eight years. This report quantifies the economic impact of the changes and what it means for investors, the government, and Nigeria's deepwater future.

Executive Summary
Surprisingly rapid legislative passage
Senate Bill 21
- What about deepwater PSAs?
Economic impact
- Impact by OML
- Impact on Pre-FID projects
Contract renewal brings additional risks
Nigeria's declining deepwater competitiveness
- Fiscal competitiveness
- Cost competitiveness
Nigeria bucks the trend towards fiscal incentives in West Africa
Conclusion

Tables and charts

This report includes the following images and tables:

Process for passing bills through National AssemblyComparison of SB 21 amendment with current DOIBPSC terms by OMLComparison of SB 21 amendment with current DOIBPSC terms for Bonga SW

Comparison of SB 21 amendment with current DOIBPSC terms for OwowoInternational comparison of state share by deepwater fiscal regimePre-FID deepwater stand-alone project breakevens by country