The Nigeria Extractive Industries Transparency Initiative (NEITI) has commended the National Assembly on the passage of the Deep Offshore and Inland Basin Production Sharing Contract (PSC) Amendment Bill.
The Executive Secretary Waziri Adio, in a statement in Abuja, on Tuesday, described the amendment as `long overdue’.
He commended the 9th National Assembly and the Presidency for breaking the jinx with the prompt action taken to amend the law at record time.
Adio noted that the development was quite consistent with NEITI’s agitation for urgent amendment of the law to forestall further revenue losses to the federation.
He 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 and 28.6 billion dollars within 10 years.
The executive secretary attributed it to failure to review the terms of PSC agreement in 2008 as was required by the law governing the PSCs.
He added that the two triggers for reviewing the Act were met in 2004 when price of oil crossed 20 dollars per barrel
He said Section 16 (1) of the Deep Offshore and Inland Basin Production Sharing Contracts Act Cap. D3. LFN 2004 stipulates that the acts should be subject to review if the price of crude oil at any time exceeded 20 dollars per barrel.
The act further stated that if it happened, the share of the federal government in the additional revenue should be adjusted under the PSC for the economic benefit to the country.
The Executive Secretary expressed confidence that with the amendment, the revenue generation for the federation in the PSC arrangement in the oil and gas industry would witness significant improvement.
The Deep Offshore and Inland Basin Production Sharing Contracts Act was enacted on March 23, 1999, with its commencement backdated to January 1, 1993. (NAN)