Nigerian legislators are attempting the impossible – to reform the management of their nation’s biggest cash cow – and failing. Decades of mismanagement and grand corruption have left Nigeria’s oil sector with entrenched and convoluted interests that are almost impossible to untangle and dislodge.

Africa Confidential reports:

Efforts towards comprehensive reform of Nigeria’s oil and gas industry are in tatters some five years after the first version of the Petroleum Industry Bill was presented to Parliament. After several redrafts, the PIB is still on the floor of the National Assembly and at the centre of partisan disputes, as parliamentarians pick over clauses which they claim favour one region of the country over another.Meanwhile, well connected companies and officials continue to benefit from an opaque system of management and operation that has allowed as much as US$100 billion to be siphoned off from state oil and gas revenue over the past decade, according to a report drawn up by the former anti-corruption czar, Nuhu Ribadu (AC Vol 53 No 9).

The failure to pass the reforms mooted in the PIB, which was intended to boost accountability and state revenue from exports, has developmental as well as financial costs. Nigeria has been unable to conduct a licensing round to award new blocks since 2007 because of uncertainties about new regulations and fiscal terms. This has limited new investment, raising the possibility that production capacity, which has been fixed at around 2.5 million barrels per day for a decade, could start to fall in the next few years.

More on this here.