NEITI ES
Waziri Adio
NEITI
NEITI ES
Waziri Adio
NEITI Welcomes Amendment to PSC Act
The Nigeria Extractive Industries Transparency Initiative
(NEITI) has welcomed with enthusiasm the passage of the Deep
Offshore and Inland Basin Production Sharing Contract Amendment
Bill by the National Assembly.
In a statement yesterday in Abuja, the Executive Secretary of
NEITI Waziri Adio described the amendment as long overdue and
commended the 9th National Assembly and the Presidency for breaking
the jinx with the prompt action taken to amend the law at record
time.
The Executive Secretary noted with satisfaction that the
development was quite consistent with NEITI’s agitation for urgent
amendment of the law to forestall further revenue losses to the
federation.
Mr Adio recalled that in March 2019, NEITI published a policy
brief titled “the 1993 PSCs: the steep cost of inaction,” which
revealed that Nigeria lost between $16.0bn and $28.61bn within ten
years for failure to review the terms of PSC agreement in 2008 as
was required by the law governing the PSCs.
According to NEITI, the two triggers for reviewing the Act were
met in 2004 when price of oil crossed $20 per barrel and in January
2008 after 15 years that the 1993 PSCs. Section 16 (1) of the Deep
Offshore and Inland Basin Production Sharing Contracts Act Cap. D3.
LFN 2004 stipulates that:
“The provisions of the Act shall be subject to review to ensure
that if the price of crude oil at any time exceeds $20 per barrel,
real terms, the share of the Government of the Federation in the
additional revenue shall be adjusted under the Production Sharing
Contracts to such extent that the Production Sharing Contracts
shall be economically beneficial to the Government of the
Federation.”
The NEITI Executive Secretary expressed confidence that with the
amendment, the revenue generation for the federation in the PSC
arrangement in the oil and gas industry will witness significant
improvement.
Mr Adio renewed his appeal to the National Assembly and the
Presidency to pay similar priority attention to all other pending
legislations required to push the much desired reforms in the oil
and gas industry
The Deep Offshore and Inland Basin Production Sharing Contracts
Act was enacted in March 23, 1999. However implementation was
backdated to commence in January 1, 1993.
Dr Orji Ogbonnaya Orji
Director, Communications & Advocacy