Nigerian govt approves Offshore Act amendment to increase oil revenue by $2b

Nigerian govt approves Offshore Act amendment to increase oil revenue by $2b
December 13 23:17 2017

By Ahmed Idris 

The Federal Executive Council (FEC) on Wednesday approved amendment of section 15 of the Production Service Contract of Deep Offshore Act to increase government’s crude oil revenue by two billion dollars.

The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, who disclosed this to State House correspondents at the end of the weekly FEC meeting in Abuja, said the proposed amendment was to enable crude oil price exceed $20 per barrel.

“For Pretroleum three key interventions today; the first for me and more substantial is the decision to work with the Attorney General to amend section 15 of the PSC of the Deep Offshore Act.

“Under the Deep off shore Act there was a provision in 1993 that once the price of crude exceeds $20 per barrel the government will take steps to ensure that that premium element is then distributed for the nation so that we get more from our oil. But over the last 20 years, nothing really was done.

“From 1993, cumulatively between then and now we have lost a total of $21 billion just because government did not act. We did not exercise it; in 2013 there was a notice to oil companies that we were going to do this but we did not follow through by going to council to get approval. So, one of the things we have worked on very hard over the last 20 years is to get that amendment because once we do the net effect for us is close to N2 billion extra revenue for the federation,” he said.

He said the other intervention was the award of a contract of more than $2.7 billion to three consortia to complete the Abuja – Kaduna – Kano (AKK) pipeline to move gas from South to North to boost power generation.

The minister told journalists that that the council approved the award of a contract to a consortium for the Odidi gas pipeline from the Warri and the Southern marshlands to move the additional gas produced through NDDC, about 364 million scrubs of gas into the AKK.

He said the measures were part of the gas gathering mechanism to boost gas delivery for power in order to move the country from a crude nation into a gas environment.

On the current fuel scarcity, the minister said queues were disappearing due to concerted efforts of the government, stressing that the gaps witnessed in terms of delivery by the private sector were addressed through premium purchase and logistics.

He said the solution to fuel scarcity was to get the country’s four refineries to be working at full capacity.