The Federal Executive Council (FEC) presided by the Vice President, Prof. Yemi Osinbajo on Wednesday approved the amendment of Section 15 of the Production Sharing Contract Law in Nigeria.
According to Dr. Ibe Kachikwu, Minister of Petroleum Resources, made this disclosure to State House correspondents at the end of the Federal Executive Council (FEC)’s meeting.
It was learnt that when the Production Sharing Contract Law is amended, it is envisaged that close to $2 billion (about N700 billion) extra revenue will be earned for Nigeria.
The Minister of Petroleum Resources, Dr. Ibe Kachikwu, stated that Nigeria has in the past 20 years lost a total of $21bn (about N7.602tn) in revenue to International Oil Companies for its failure to implement the law.
The Minister of Petroleum Resources, Dr. Ibe Kachikwu stated that the Ministry of Petroleum Resources would collaborate with the office of the Attorney General of the Federation in amending that section of the law.
The Minister of Petroleum Resources, Dr. Ibe Kachikwu further said that there was a provision in 1993 that once the price of crude exceeded $20 a barrel, “the government will take steps to ensure that that premium element is then distributed at an agreed premium level for the Federal Government.”
“But over the last 20 years, nothing really was done. From 1993 to now, cumulatively, we have lost a total of $21bn just because the government did not act. We did not exercise it. In 2013, there was a notice to oil companies that we were going to do this, but we didn’t follow through in terms of going to council to get approval.
“One of the things we have worked on very hard over the last 20 years is to get that amendment, because once we do, the net effect for us is close to $2bn extra revenue for the federation.”
On whether it was possible for the government to recover the lost revenue to the IOCs, Kachikwu said, “I doubt it for the simple reason that the provisions of the Joint Operating Agreement in Section 15 is that the government would need to do something, which is what we have just done today.
“If it is not done then, the oil companies are operating within the realms of what the law is. So that’s going to be difficult. But I love not to talk too much about that. I will be giving out what my strategies will be on national TV.
“Let me just say that however we do it, we will definitely try to see whether a possibility exists to claw back some advantages. Let me just keep it at that.”
According to Dr. Ibe Kachikwu, Minister of Petroleum Resources, made this disclosure to State House correspondents at the end of the Federal Executive Council (FEC)’s meeting.
It was learnt that when the Production Sharing Contract Law is amended, it is envisaged that close to $2 billion (about N700 billion) extra revenue will be earned for Nigeria.
The Minister of Petroleum Resources, Dr. Ibe Kachikwu, stated that Nigeria has in the past 20 years lost a total of $21bn (about N7.602tn) in revenue to International Oil Companies for its failure to implement the law.
The Minister of Petroleum Resources, Dr. Ibe Kachikwu stated that the Ministry of Petroleum Resources would collaborate with the office of the Attorney General of the Federation in amending that section of the law.
The Minister of Petroleum Resources, Dr. Ibe Kachikwu further said that there was a provision in 1993 that once the price of crude exceeded $20 a barrel, “the government will take steps to ensure that that premium element is then distributed at an agreed premium level for the Federal Government.”
“But over the last 20 years, nothing really was done. From 1993 to now, cumulatively, we have lost a total of $21bn just because the government did not act. We did not exercise it. In 2013, there was a notice to oil companies that we were going to do this, but we didn’t follow through in terms of going to council to get approval.
“One of the things we have worked on very hard over the last 20 years is to get that amendment, because once we do, the net effect for us is close to $2bn extra revenue for the federation.”
On whether it was possible for the government to recover the lost revenue to the IOCs, Kachikwu said, “I doubt it for the simple reason that the provisions of the Joint Operating Agreement in Section 15 is that the government would need to do something, which is what we have just done today.
“If it is not done then, the oil companies are operating within the realms of what the law is. So that’s going to be difficult. But I love not to talk too much about that. I will be giving out what my strategies will be on national TV.
“Let me just say that however we do it, we will definitely try to see whether a possibility exists to claw back some advantages. Let me just keep it at that.”
The Minister of Petroleum Resources, Dr. Ibe Kachikwusaid the council also approved contract worth $2.7bn for the construction of a gas pipeline traversing Abuja, Kaduna and Kano states. The project is regarded as the AKK gas pipeline project.
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