(C) NIGERIA: UPDATE ON THE STATUS OF THE PETROLEUM INDUSTRY

C O N F I D E N T I A L ABUJA 001764

NOFORN
SIPDIS

DEPT PASS USAID/AFR/SD FOR CURTIS, ATWOOD AND SCHLAGENHAUF
DEPT PASS TO USTDA-PAUL MARIN, EXIM-JRICHTER

DEPT PASS USTR FOR AGAMA
JOHANNESBURG FOR NAGY
USDOE FOR GEORGE PERSON
TREASURY FOR PETERS, SOLOMON AND RITTERHOFF

E.O. 12958: DECL: 02/04/2029
TAGS: EPET ENRG EINV ECON ETRD PGOV NI
SUBJECT: (C) NIGERIA: UPDATE ON THE STATUS OF THE PETROLEUM INDUSTRY
BILL

Classified By: Ambassador Robin R. Sanders for reasons 1.4. (b
& d).


1. (C) SUMMARY: Meetings with the Ministry of Petroleum Resources
indicate that the government of Nigeria is working to meet the needs
of the stakeholders in the omnibus Petroleum Industry Bill and that
the President is "100 percent" behind the bill. Ministry contacts
believe that the bill will pass into law before the end of the year.
END SUMMARY.


2. (C) EconOff met with the President Yar'Adua's Oil and Gas Sector
Reform Implementation Committee (OGIC) sub-chairman Dr. Mohammed
Ibrahim to discuss the Petroleum Industry Bill (PIB) on September 16
and September 23. Ibrahim has worked on the oil and gas reform with
OGIC for 11 years and commonly chairs meetings for the Minister of
Petroleum Resources Rilwanu Lukman. Ibrahim briefed that before
Lukman forwarded the PIB to the National Assembly he pushed Yar'Adua
hard that there was no point in setting the legislative arm in action
if the President could not withstand the expected pressure by those
who stand to lose with the PIB's reform. According to Ibrahim, the
President is "100 percent" behind the bill.


3. (C) Ibrahim said Lukman asked him to work with the international
oil companies (IOC) to obtain agreement on the top issues regarding
oil and gas revenue, profit, taxation, and a common method of
calculation. He shared that the IOCs did not pay much attention to
the PIB until the second reading. They have been reluctant to share
their recommendations of a common formula since that time, but
instead continue to send graphs and charts to the Ministry without
the back-up papers showing the methods of calculation.


4. (C) Ibrahim and Special Advisor to the President on Petroleum
Matters Dr. Emmanuel Egbogah met with the IOCs on September 17 and
September 23. Ibrahim is confident that they will come to a common
ground. He emphasized that the Ministry is working with all
stakeholders to meet their needs. He mentioned that a percentage of
ownership in oil and gas projects is being offered to many of the
local communities. Ibrahim believes the stakeholders with the
largest issues will be satisfied by the final reading. He is
confident the bill will pass by December, perhaps sooner.


5. (C) Comment. The executives of several IOCs were gathering to
meet with Ibrahim while he was meeting with USAID Economic Growth and
Environment Director, Economic Counselor, and EconOff as they met to
discuss USAID's proposed energy program for 2010 on September 23.
Ibrahim promised to provide a read-out of those discussions later
this week, and we will follow-up with the IOCs. We will provide a
checklist cable on what the Mission has done to date on advocacy on
this issue since early in the year. End Comment.

SANDERS