The Senate has directed its committees on Petroleum, Finance, and Judiciary to investigate the reasons for the failure to review the provisions of the Production Sharing Contract Act which has cost Nigeria about 7trillion Naira over a period of 20 years.
The Committees are to identify the best fiscal regime for the production sharing contracts and review the act to ensure that beyond the crude oil price of 20 dollars, the share of the Federal Government in the additional revenue is adjusted in accordance with the provisions of the Act.
The Senate is giving these directives after considering a motion from Senator Ifeanyi Ubah who is calling for an urgent review and recovery of additional revenue accruable to the Federal Government from Production sharing contracts.
Ubah had drawn the attention of his colleagues to the IOCs alleged refusal to honour the provisions of the Production Sharing Contracts Act.
The Act of the National Assembly according to the Senator, regulates the sharing of additional revenue between the Nigerian National Petroleum Corporation and the various oil companies.
The Deep Offshore and Inland Basin Production Sharing Contract Act Cap D3 LFN 2004 (PSC Act) became effective on January 1, 1993.
He said the legislation was supposed to be reviewed after 15 years.
He said as a result of the non-review of the PSC Act, the Federal Government had lost about $21 billion over a period of 20 years as confirmed by the Minister of State for Petroleum Resources after a meeting of the Federal Executive Council on the 14th December 2017.
“Mandate the Senate Committee on Petroleum Resources Upstream to investigate the reasons for the failure to review the salient provisions of the PSC Act, identify the best fiscal regime for the PSCs and review the provisions of the PSC Act to ensure that beyond the crude oil price of US$20.
“The share of the Federal Government of Nigeria (FGN) in the additional revenue is adjusted in accordance with the provisions of the Act,” was unanimously adopted when it was put to a voice vote by the President of the Senate, Ahmad Lawan”, he added.