The Senate on Tuesday approved $500 million and or five years imprisonment as penalty for International Oil Companies (IOCs) operating in the country that defaults on products sharing contracts.
The Senate also passed the Deep Offshore and Inland Basin Production Sharing Contract Act 2004(amendment) Bill 2019.
The bill was passed even as President Muhammadu Buhari wrote to Senate Tuesday, and conveyed his request for lawmakers to quickly amendment the Act.
Senate had a week ago, discovered that the federal government has lost the sum of N7 trillion oil revenue over a period of twenty years due to non-review of the Production Sharing Contract (PSC).
The PSC is a contractual arrangement for petroleum exploration and production whereby the federal government as owner of petroleum resources engages a contractor to provide technical and financial services for an agreed share in profit oil after payments of royalty, coat and tax oil.
In 1991, the FG offered the PSC through a legislation tagged as “Deep offshore and inland basin production sharing contract Act 2004 and it became effective on January 1,1993.”
Since then, the PSC Act has not been reviewed and it made the federal government to lose oil revenue.
On Tuesday in Senate, the PSC bill was finally passed by the upper chamber after consideration of the report of the Joint committees on Petroleum (Upstream), Gas and Finance.
As the bill is finally passed, Senate estimate that Nigeria stands to benefit about N1.5 billion annually being revenue due to the federal government from International Oil Companies (IOCs) operating in the country.
The bill was sponsored by Senators Albert Akpan Bassey and Ifeanyi Ubah respectively.
Before the bill was passed, the Senate introduced sections 17 and 18 into it for appropriate penalties against violation of of the Act .
The Senators took the bill in clause-by-clause consideration of the committee’s report. The report of the amendment has recommended 10 years for a future review of the law.
The Deputy President of the Senate, Ovie Omo-Agege in his remarks called for the 10 years of future reviews.
Meanwhile, Chairman of the Committee, Senator Albert Bassey Akpan, had informed that the Nigerian National Petroleum Corporation (NNPC) and International Oil Companies bemoaned the five-year period which they said was insufficient to take certain final investment decisions.
In his remarks, the President of the Senate said the National Assembly made history with the passage of the Bill for an amendment of Production sharing Contracts Act.
He said: “We have done what could not be done since 2003 to date. Today marks a milestone in the history of the Senate, and particularly the National Assembly.
“With the passage of this bill, Nigeria will gain at least $1.5 billion in 2020 as a result of this amendment. The Senate will do more.
“I must commend President Buhari, who mentioned the need to amend this bill in his speech when he presented the 2020 budget to the National Assembly last week, and of course, we also received an executive communication from him.” Lawan stated.
Solomon Ayado, Abuja
