House to Probe NNPC over Alleged Loss of $21bn Oil Revenue to IOCs

The House of Representatives has passed a resolution to set up an ad-hoc committee to among other things investigate the operation of Production Sharing Contract (PSC) between the Nigerian National Petroleum Corporation (NNPC) and the International Oil Companies (IOCs) to determine the reasons for the loss of an alleged $21 billion in oil revenues to the latter.

It further tasked the proposed committee to review the PSC and the Joint Operating Agreement and other relevant agreements with a view to regularising all the anomalies that had led to loss of revenue and make its findings and recommendations to the House within six weeks.

The resolution was sequel to a motion sponsored by Hon. Sunday Marshall Katung (PDP, Kaduna) on the urgent need for an investigation into the loss of $21 billion (about N7.6 trillion) crude oil revenue to IOCs.

The House expressed concern over statements credited to the Minister of State for Petroleum, Dr. Ibe Kachikwu, on December 17, 2017, while briefing journalists after the Federal Executive Council (FEC) meeting that the corporation had lost about $21 billion to IOCs operating in the country due to non-implementation of PSC.

Specifically, Katung, in his lead debate said it was distressing to note that Kachikwu had further indicated that the said revenues were lost largely because of federal government’s failure to act in 2013, adding that although there’s a notice to oil companies that government would take steps to correct perceived anomalies: it failed to secure necessary from FEC.

He said these acts of negligence, omission, incompetence, if not outright collusion and conspiracy may have given room, possibly for corruption to be perpetrated over such a long period of time when the country has had well-paid legal and technical experts in place.

According to him: “These reckless incidents that have resulted in the massive depletion of both our nation’s resources and the revenue accruing from them have gone on for far too long and that there’s need for this National Assembly to come to Nigeria’s rescue in the interest of the common man and take adequate measures to bring them to a halt.”

He recalled that the deep offshore and inland basin production sharing contract Act of 1993 (PSC) was enacted in response to the problems posed by the Joint Venture arrangements as well as the desire of the federal government to open up the sector to more foreign participation and further benefit the economy.

However, House Speaker, Hon. Yakubu Dogara, citing House policy, declined further contributions from members on the motion as it was investigative in nature- and in order not to preempt conclusions to what needed to be investigated.