Business & Finance

Senate probes 7 oil firms over $21bn unremitted funds

The Nigerian Senate has mandated three of its committees to investigate seven international oil companies over their alleged refusal to remit about $21 billion to the national treasury.

The decision was sequel to a motion by the Vice Chairman, Senate Committee on Petroleum upstream Resources, Senator Ifeanyi Ubah.

Senator Ubah had drawn the attention of his colleagues to the IOCs alleged refusal to honour the provisions of the Production Sharing Contracts Act (PSC).

The Act of the National Assembly according to the Senator regulates the sharing of additional revenue between the Nigerian National Petroleum Corporation and the various oil companies.

The Deep Offshore and Inland Basin Production Sharing Contract Act Cap D3 LFN 2004 (PSC Act) became effective on January 1, 1993.

He said the legislation was supposed to be reviewed after 15 years.

Senator Ubah said, as a result of the non-review the PSC Act, the Nigerian Government had lost about $21 billion over a period of 20 years as confirmed by the Minister of State for Petroleum Resources after a meeting of the Federal Executive Council on the December 14, 2017.

Reason for failure

He, therefore, stressed the need to thoroughly investigate reasons for the failure to review the salient provisions of the PSC Act.

Senator Ubah said beyond the crude oil price of $20, the share of the Nigerian Government in the additional revenue was adjusted to the extent that the PSCs shall be economically beneficial, in accordance with the provisions of the Act.

The Senate after a robust debate on the issue, mandated committees on Petroleum Resources Upstream; Judiciary and Legal Matters and that of Finance, to investigate reasons for the failure to review the salient provisions of the PSC Act.

Source: Voice of Nigeria