The House of Representatives Ad-hoc Committee on the Review of the Operations of the Production Sharing Contract yesterday expressed dissatisfaction with explanations given by government agencies for failing to trigger a review of the Production Sharing Contracts (PSCs) as stipulated by the law.
Section 16 (1) of the PSC Act 1993 and 2003 provides for the review of the PSCs agreements the government entered into with oil companies once oil price exceeds $20 per barrel. Oil price has traded above $20 for over a decade but no form of review has been carried out, a situation that has led to the loss of revenues to the government estimated at over $21 billion.
At a Stakeholders Interactive session in Abuja, some of the agencies who made presentations to the committee absolved themselves of any responsibility. The agencies included the Department of Petroleum Resources (DPR), Central Bank of Nigeria (CBN), Federal Inland Revenue Service (FIRS), Ministry of Justice and Finance. The NNPC and the Ministry of Petroleum Resources did not send a representative to the session.
While the CBN said its role is restricted to providing banking services to the government, Finance and Justice Ministry and the FIRS said the review of the agreements were not within their purview. The DPR representative Mr. Benjamin Ewuga said a review of the PSCs had been initiated in the past but implementation was stalled.
Chairman of the Ad-hoc committee Daniel Reyenieju when asked if he was satisfied with the agencies’ presentations said “No, I am not impressed.”
“But that is a process we are just building up. We will get to a point where we will have to mandate them to give us all the submissions that is required,” Reyenieju said, adding that the next step after the interactive session would be to meet with critical stakeholders in the sector and then public hearing.
Last year, minister of state for petroleum resources Mr. Ibe Kachikwu bemoaned the loss of “close to $21 billion” extra revenue for the country due to the non-review of the Act.
“From 1993 to now, we have lost a total of $21 billion just because government did not act. We did not exercise it,” Kachikwu was quoted to have said.
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