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Update: $63bn debt: AGF asks international oil companies to pay up

Oil industry

The Attorney-General of the Federation and Minister of Justice, Abubakar Malami, has again asked International Oil Companies to settle about $63 billion owed the Federal Government.

The minister said the money represents unpaid arrears the companies have refused to remit to the coffers of the Federal Government.

He noted that since the signing of Deep Offshore and Inland Basin Production Sharing Contracts Act CAP D3 Law of the Federation of Nigeria 2004 (as amended) 2019 for oil exploration in deep offshore and inland basins, the Federal Government was to get more shares of the oil revenue which the international companies did not pay, the arrears of which were estimated at $62,190,679,709 as at 2018.

The call is contained in a statement issued by Umar Jibrilu Gwandu, special assistant on media and public relation to the AGF, and made available to newsmen in Abuja on Tuesday night.

Speaking on the media reports on the development, the minister said the matter was not about percentage to be given to the recovery agency, but of patriotic desire to get back to the country the revenue it deserves. He noted that the 5 percent proposed success contingent fee was an unprecedented reduction from what it used to be during the past administration.

“The 5 percent as a recovery fee is a product of innovation introduced by the Federal Government upon the assumption of office of the President Muhammadu Buhari as against 30 percent and above which was the traditional fee by the previous administration,” Malami said.

“The comparative basis is not the Lagos budget as the considerable parameter, but the amount due for the recovery which in the circumstance is approximately $62,190,679,793.00 as at December 2018,” he said.

He argued that “when you convert $62,190,679,793 into naira, it will give you an amount more than N20 trillion”.
“By virtue of Section 162 of the Constitution of the Federal Republic of Nigeria 1999 as amended, the amount in question is more than enough for three years’ budget of the most populated African country, Federal Republic of Nigeria, considering the 2020 budget of N10.3 trillion,” he said.

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Malami said it was not about the composition and who the recovery agents are, but the funds belonging to the Nigerian masses must be recovered for the government to carry out more development projects for the benefits of the teeming populace who brought the government into power and whose interest the Federal Government stands firms to protect.

“Above all, volume of the fees payable to the recovery agents which in all cases is contingent upon recovery has never been a subject of executive contention in this matter. It does not accord with reason and logic for the Federal Government of Nigeria to overlook, forgo and condone loss of $64bn on account of meagre 5 percent fee payable upon recovery,” the minister said.

It would be recalled that three oil producing states of Bayelsa, Rivers and Cross River filed an action in the Supreme Court on 27th April, 2019 praying, among other things, for immediate recovery and payment of “all outstanding statutory allocations due and payable to the plaintiffs”.

On 19th January, 2018, Trobell International (Nig) Ltd forwarded proposal to the Office of the Attorney-General of the Federation requesting to be engaged as an agent to recover diverted proceeds of the governments of Nigeria due from the share of profit oil under the various Production Sharing Contracts made pursuant to Section 16(1) of the Deep Offshore and Inland Basin Production Sharing Contracts Act CAP D3 Law of the Federation of Nigeria 2004.

Following the approval for Trobell International (Nig) Ltd to undertake the task on April 12th 2018, the company engaged the services of lawyers, engineers, financial experts and petroleum experts nominated by the three state governments.

Felix Omohomhion, Abuja