•As FG May Rake In Additional N400bn Revenue From IOCs

The Nigerian Senate, on Tuesday in Abuja, passed the Deep Offshore and Inland Basin Production Sharing Contract Act 2004 (Amendment) Bill 2019 into law.
This was just as the upper chamber received a formal request from President Muhammadu Buhari seeking the amendment of the Act, in a bid to shore up Nigeria’s revenue earning.
The bill, which was passed by the upper chamber after consideration of the report of the Joint committees on Petroleum (Upstream), Gas and Finance, could see about N400bn revenue accruing to the Federal Government from International Oil Companies (IOCs) operating in the country.
The Senate, during the clause-by-clause consideration of the committee’s report, however, amended clause 17 of the Act, which recommended 10 years for a future review of the law.
The Deputy Senate President, Ovie Omo-Agege, had during consideration of the report, demanded an explanation from the Joint committee as to why the timeline for review of Production Sharing Contracts was amended from five years to 10 years.
Responding, the committee chairman, Senator Albert Bassey Akpan, explained that the Nigerian National Petroleum Corporation (NNPC) and International Oil Companies believe the five-year period was insufficient to take certain final investment decisions.
“It takes about five years for an investor to take a Final Investment Decision (FID). So the NNPC and others are saying, for you to review the law, you must give them a stable law; something they can project on,” Akpan said.
Some lawmakers including, Senators Danjuma Goje (APC, Gombe Central) and Jibrin Barau (APC, Kano North), who were not swayed by Senator Akpan’s explanation, insisted on the retention of the existing five-year periodic timeline provided in the Act.
Senator Ibikunle Amosun (APC, Ogun Central), however, prevailed on his colleagues and moved a motion for an amendment of clause 17 to specify eight years as the timeline for the review of the Production Sharing Contracts.
The motion was seconded by Senator Kabiru Gaya (APC, Kano South) and thereafter adopted by the upper chamber when put to a voice vote by the President of the Senate, Ahmad Lawan.
Commenting further, the Senate President said the National Assembly made history with the passage of the Bill, commending President Muhammadu Buhari for his commitment to the amendment of the Act.
He stressed that Nigeria stands to benefit $1.5bn as a result of the amendment.
According to him, “we have done what could not be done from 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,” he stressed, assuring that the Senate is resolved to do more.
“For the IOCs doing business in Nigeria, the amendment will not in any way discourage investment. We expect that they will continue to do business in Nigeria.
“When we legislate at the National Assembly, we will always be mindful of the need to have a competitive environment.
“When we work on the Petroleum Industry Bill, maybe in January, we will ensure that it is a win-win situation for Nigerians and those doing business in the oil and gas industry,” Lawan added.
Earlier, the Senate President read an executive communication from President Muhammadu Buhari requesting the amendment of the Production Sharing Contracts Act.
The Bill, he assured the legislators, “seeks to reflect the current realities in the oil and gas sector, as well as to secure increased revenue for the Federal government to fund projected expenditure in the 2020 and subsequent budgets.
“While I trust that this bill will be expeditiously and favourably considered by the National Assembly, please accept, Distinguished Senate President, the assurances of my highest consideration.”