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Monday, Oct 8, 2012 11:45 AM UTC

UK business secretary applauds Nigeria oil bill

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Topics: From the Wires,

LAGOS, Nigeria (AP) — The United Kingdom’s business secretary said Monday that a bill to overhaul Nigeria’s oil industry should be focused on what helps the West African nation, rather than what benefits the foreign oil companies working there.

The comments by Vince Cable on a visit to Lagos represent a departure from what Western diplomats have said in the past about the Petroleum Industry Bill, which analysts say would sharply reduce the profits of foreign companies like Chevron Corp., ExxonMobil Corp., Eni SpA, Royal Dutch Shell PLC and Total SA. Diplomats largely have supported the position of the oil companies in a nation that remains crucial to U.S. gasoline supplies.

Cable, speaking before business leaders gathered at a breakfast meeting Monday, said the overhaul bill could help transparency and accountability efforts in the nation. The bill would require the government-run Nigerian National Petroleum Corp., which partners with all foreign oil firms, to seek profits like a private business and not rely on government subsidies.

“The issue here is not what is good for the oil companies, but what best helps the country maximize its potential,” Cable said.

However, he cautioned that the bill needs to be “well-crafted,” without going into specifics.

Oil money provides about 80 percent of Nigeria’s government funding, which trickles down to states that have budgets greater than those of surrounding nations. But the corruption that pervades the nation often sees that money go into political leaders’ pockets rather than toward government services.

Shell, which has strong presence in Britain and where Cable once worked as an economist, previously has said that it has put $40 billion in planned investments on hold in Nigeria over the outcome of the bill. Cable is a member of the Liberal Democrats, the junior partner to the Conservatives in Britain’s coalition government.

It remains unclear, however, whether the oil overhaul bill has the traction necessary to move from proposal to law. The bill has languished for years before Nigeria’s National Assembly, despite claims by various leaders, including President Goodluck Jonathan, that it quickly would win lawmakers’ approval.

Cable, who once worked as an economics adviser to Kenya’s government, also highlighted Africa’s recent economic resurgence despite the global recession. He sat next to billionaire businessman Aliko Dangote during the event Monday in Lagos. He acknowledged that British firms have backed away from marquee road projects and other improvements in Africa, in part out of not being paid for work in the past. He made the comments inside the Oriental Hotel, a massive new building recently built in Lagos by Chinese construction companies.

He also urged Nigeria to do more to fight the government corruption that chokes the country. He recounted giving a talk to military dictator and mass embezzler Sani Abacha in the 1990s about what could happen to Nigeria if corruption went unchecked.

Abacha “listened politely and even burst into laughed when one of his ministers … angrily interrupted me to say: ‘There is no such thing as corruption in Nigeria,’” Cable said.

___

Jon Gambrell can be reached at www.twitter.com/jongambrellAP .

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