Senate: Nigeria Loses N7tn for Failing to Amend PSC Act

Set to review oil law to boost revenue To allocate more funds to security agencies to fight insecurity

The Senate yesterday lamented the loss of about N7 trillion ($21billion) by the federal government over a 20-year period due to failure to review and amend the Production Sharing Contract ( PSC) Act.

It has, therefore, resolved to amend the Act with a view to boosting the nation’s revenue base.

To this end, a draft of the bill to amend the PSC Act will be presented for debate at Senate plenary today.

The resolution of the upper chamber was sequel to the consideration of a motion titled: ‘Urgent need to review and recover additional revenue accruable to the Government of the Federation from the Production Sharing Contracts pursuant to Section 16 of the Deep Offshore and Inland Basin Production Sharing Contract Act’ sponsored by Senator Ifeanyi Patrick Ubah (Anambra South) and 33 other senators.

The Senate also mandated its Committees on Petroleum Resources (Upstream), Finance and Judiciary to investigate the reasons for the failure to review the provisions of the Production Sharing Contract (PSC) Act before now.

President of the Senate, Ahmad Ibrahim Lawan, while summing up the decision of the Senate on the motion emphasised that Nigeria’s economy will gain significantly if the Act was amended.

According to him, “the monies can be injected into financing the 2020 budget. This is one important and patriotic motion we have taken so far in the Ninth Senate.

“Let me say that tomorrow (Thursday), the bill that needs to be amended is coming up at plenary for consideration and I believe what we need to do is to give it the most expeditious consideration ever.

“We also pray the executive arm of government will give it expeditious treatment because this is one bill that if amended and signed, will give us N160 billion proposed for the 2020 budget. So time is of essence here, and therefore, we will do everything possible to pass it, and of course follow it up, so that the effect is seen in money available to finance the 2020 appropriation which will be presented possibly next week,” he stated.

Presenting the motion earlier, Ubah had said the non-review and amendment of the PSC Act had cost the federal government about $21 billion (about N7 trillion) in the last 20 years.

“Nigeria, having lost trillions of naira due to non-review of the PSA Act, stands to gain an additional sum above N30 billion naira monthly (360 billion naira annually) if the Act is reviewed and amended,” he added.

Contributing, Senator George Sekibo (Rivers East) frowned upon the attitude of the executive, the operators of the law, saying it was agreed that the sharing formula be reviewed when the price of crude oil moved to $20.

“The price of crude has since 1999 been on the rise; it was supposed to be revised after 15 years since the law was formulated. The country can make more money from PSC, but it hasn’t. Why have we failed? I understand that there is a cartel frustrating it because they make money at the expense of Nigeria. The president must personally take this upon himself and recover all the outstanding arrears,” he said.

Senator Gabriel Suswam (Benue North East) stressed the need to understand the PSC and how the international oil companies investing are recouping Continued on page...50