The bill is also expected to help unlock billions of dollars in frozen investment. It will have sweeping consequences for an industry that represents more than two-thirds of government revenue for Nigeria and nearly all of its export earnings.
It would redefine fiscal terms in the industry, increasing Nigeria’s share of revenue, as well as restructure state oil company, the Nigerian National Petroleum Corporation, NNPC.
In a speech kicking off debate, House majority leader Mulikat Adeola-Akande called it “one of the most important bills we will ever consider.”
She referred to the uncertainty over new fiscal terms in recent years that has led major oil firms to limit investment.
“The non-passage of the bill has occasioned an atmosphere of confusion and uncertainty in the oil and gas sector, leading to the loss of billions of dollars in potential revenue for the country.
“This situation continues to deteriorate with further delays in the passage of the bill,” she said.
Debate is expected to continue on Thursday.
While debate has now opened in the House, many steps remain before it can become law. Public hearings will have to be held at the committee level followed by a final vote in the full House, and the Senate must follow the same process.
If the House and Senate end up with different versions, they will have to harmonise them before forwarding a copy to President Goodluck Jonathan for his signature.
There are indications that lawmakers representing competing interests will be seeking significant changes to the bill.
Attempts to approve the bill in previous years descended into confusion when multiple versions of it emerged in parliament, prompting Jonathan to send a fresh version to lawmakers in July.
Oil companies such as Shell and Exxon-Mobil, major producers in Nigeria, say the current proposed fiscal terms are too harsh and will not lead to fresh investment in the industry.
Oil Minister Diezani Alison-Madueke has said the bill “comes closest to what we consider a win-win situation for the Nigerian government, the Nigerian economy and people as well as other stakeholders and potential investors in the oil and gas industry.”
Nigerians fed up with oil pollution and the country’s deeply rooted corruption have long pushed for a fairer shake from the petroleum industry.