Insight
Nigerian lawmakers vote to increase deepwater royalties
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.
Table of contents
- Executive Summary
- Surprisingly rapid legislative passage
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Senate Bill 21
- What about deepwater PSAs?
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Economic impact
- Impact by OML
- Impact on Pre-FID projects
- Contract renewal brings additional risks
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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 6 images and tables including:
- Process for passing bills through National Assembly
- Comparison of SB 21 amendment with current DOIBPSC terms by OML
- Comparison of SB 21 amendment with current DOIBPSC terms for Bonga SW
- Comparison of SB 21 amendment with current DOIBPSC terms for Owowo
- International comparison of state share by deepwater fiscal regime
- Pre-FID deepwater stand-alone project breakevens by country
What's included
This report contains:
