Destroyed oil pipelines belonging to the Nigerian National Petroleum Corporation in Lagos, Nigeria.
Destroyed oil pipelines belonging to the Nigerian National Petroleum Corporation in Lagos, Nigeria. - 
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Kai Ryssdal: Big oil companies are well aware of the risks of doing business in Nigeria. Militants in the Niger River delta attack their drilling platforms and pumping stations with some degree of regularity. This week those oil companies have a less violent but perhaps more expensive issue to deal with. There's a new proposal to overhaul the expatriate oil and gas industry in Nigeria. Overhaul meaning make foreign companies pay more for the privilege of drilling. Marketplace's Sarah Gardner reports.

SARAH GARDNER: Oil companies have been doing business in Nigeria for decades, but the government there says the current laws are outdated and slanted towards big oil. So it's proposing higher taxes and royalty fees on foreign oil companies, among other changes.

Chris Skrebowski edits the London-based Petroleum Review. He says Nigerian officials have been threatening these changes for years, but militant attacks on pipelines in the Niger Delta have made the legislation more urgent.

CHRIS SKREBOWSKI: It sounds to me what the central government is trying to do is impose extra taxes on the oil companies and to use the extra taxes to meet the demands of the people in the Delta.

Demands like sending a greater share of the country's oil revenues to the Delta region. Local tribes have also complained that oil operations are destroying the environment. Financial Times journalist Michael Peel has just written a book on the Nigerian oil industry called "A Swamp Full of Dollars." He says given the country's history of political corruption, most Nigerians expect at least some of that extra tax money will go astray.

MICHAEL PEEL: I think that a lot of people would see this as an attempt by the government not primarily to deliver goods to the people but to grab more resources for itself.

The oil companies say the proposed changes will hurt profits and discourage future investment. But incentives to stay are powerful. Nigeria produces light sweet crude. That's the most desirable kind of oil since it's easy to refine. Shell, for one, currently gets 11 percent of its global production from Nigeria.

I'm Sarah Gardner for Marketplace.

Follow Sarah Gardner at @RadioGardner