Nigeria’s Senate To Begin Amendment Of Production Sharing Contract Act

Senate President, Ahmad Lawan, on Wednesday, said Nigeria lost about N350bn to fund the 2019 budget for failing to review the Production Sharing Contract (PSA) Act of 1993 when the price of crude oil fell below $20 per barrel.
While declaring open a public hearing convened by the Senate and House of Representatives Joint Committees on Finance on 2020-2022 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), Lawan said if this had been done, Nigeria would have benefited from and gotten “50% of the increase in the price of crude; and we are talking about billions of dollars.”
The Senate President said that was a missed opportunity that “we squandered ourselves. The oil companies would have no business telling us to review our laws.
“And we are inviting the executive side of government to work with us on this very important Act that we are about to amend.
“We expect that before the budget is passed, this Act would have been amended and signed into law by the President… because we have to fund the 2020 budget properly,” Lawan said.
To forestall further loss, Lawan said the Senate will on Thursday, October 3, 2019, take the first reading of the amendment bill, without which “even the N160bn proposed in the 2020 budget is at risk.
“So we have to do everything possible to ensure that what is ours as a country comes to us,” he added, assuring that the Senate would ensure expeditious consideration of the amendment bill.
According to a statement by Ezrel Tabiowo, Special Assistant (Press) to the President of the Senate, Lawan expressed confidence that the executive will equally support the move.
Senators, he continued, have agreed on the review as part of efforts to boost government revenue, lamenting a situation where the country continues to be shortchanged, “and of course, we blame ourselves for that.”
The decision to amend the PSA Act, followed a motion titled: “Urgent need to review and recover additional revenue accruable to the government of the Federation from the Production Sharing Contracts pursuant to Section 16 of the Deep Offshore and Inland Basin Production Sharing Contract Act,” sponsored by Senator Ifeanyi Patrick Ubah (YPP, Anambra South).
The Senate also on Wednesday mandated its Committee on Petroleum Resources Upstream to investigate the reasons for the failure to review the provisions of the Production Sharing Contract (PSA).
Presenting the motion, Senator Ubah noted that “as a result of the non-review and amendment of the PSC Act, the Federal Government has lost about US$21bn (about N7tr) over a period of 20 years.”
Ubah added, “Nigeria having lost trillions of naira due to non-review of the PSA Act stand to gain an additional sum above 30 billion naira monthly (360 billion naira annually) if the Act is reviewed and amended.”