A bill seeking to overhaul Nigeria's oil sector would lead to a halt in new investments if passed in its current form due to onerous fiscal terms, the head of ExxonMobil's Nigeria operations said Thursday.
Mark Ward, who also leads a grouping of oil majors operating in Africa's top producer, said industry players shared the view that the current bill jeopardises Nigeria's bid to boost new investment and output.
New investment in Nigeria's oil industry has already been limited in recent years due to lingering uncertainty over the bill.
"Quite frankly, the extremely large investments that are needed are seriously at risk under the proposed PIB (Petroleum Industry Bill) terms," he told a forum on the bill in the economic capital Lagos.
If the bill passes without significant changes, "the government's aspirations to grow the business and the industry will not be met," he said.
Oil Minister Diezani Alison-Madueke has described the bill as fair to the government, oil firms and Nigerians, who have long pushed for a fairer shake from an industry that has left the country's Niger Delta region badly polluted.
Legislation to reform Nigeria's much criticised oil sector was first introduced in 2008.
President Goodluck Jonathan sent a fresh version of the bill to parliament in July that lays out immense changes to the industry and restructures the state oil firm, widely seen as riddled with corruption.
Ward argued that the new bill could push the government take from oil revenue to above 90 percent of all revenue.
"Nigeria is already one of the most onerous fiscal regimes and now the government wants to make it tougher?...That is something we don't understand," Ward said.
Any hopes of expanding lucrative offshore production would be quashed if the bill passes unchanged, Ward said.
"For deepwater: we're done. There are no investments that can be supported under the current terms of the PIB," Ward said.
Energy analysts Wood Mackenzie said a crucial change outlined in the bill was a shift from a profits-based fiscal system to one focused more on royalties that would result in government seeing a larger chunk of cash earlier on.
"This will substantially increase government share," said Gail Anderson, Senior Sub-Sahara Africa analyst said in a statement Thursday.
She echoed Ward's concern that the current PIB would "threaten the viability of future deepwater projects ..."
Nigeria has been looking to increase its take from offshore projects, arguing that current terms are too beneficial to oil firms since they were put in place when officials were seeking to lure investment into the yet unproven deepwater.
Nigeria's parliament recently ended a recess and lawmakers have said the bill is among the first items to be debated in the new session.
Other concerns raised over the bill include powers granted to the president and the oil minister and what activists describe as insufficient measures to improve transparency.
On Thursday, Transparency International's local partner, the Civil Society Legislative Advocacy Centre, called for "a people-oriented law that will ... overturn the trend of the scandalous and monumental level of corruption we have experienced in the recent past."