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Fred Itua, Abuja
The Senate, yesterday, initiated moves targeted at recovering over $21 billion arrears of revenues lost to some faulty clauses in the oil Production Sharing Contract (PSC).
It equally resolved to investigate reasons for failure to review the salient provisions of the PSC Act, identify the best fiscal regime for the PSCs and review the provisions of the PSC Act to ensure that beyond the crude oil price of US$20, share of the Federal Government of Nigeria in the additional revenue is adjusted in accordance with the provisions of the Act.
Moving the motion, Ubah said the committee on petroleum resources upstream had been inundated with petitions and complaints on the PSC.
He said Federal Government over the years had lost billions of dollars in potentially accruable revenue due to non-review and amendment of the salient provisions of the PSC Act.
He said in spite of huge contributions of the PSC to total oil production, the contributions of revenue per barrel of PSC for Federal Government’s take had been significantly low.
This, he said, was because of the inherent inequitable terms in the PSC and failure to review the salient provisions of the act.
According to him, PSC Act provides that where the price of crude oil exceeds $20 per barrel, the Act will be reviewed to ensure that Federal Government share in the additional revenue is adjusted.
He also said the act provided that it may be reviewed after 15 years from the date of its enactment in 1993 and every five years thereafter.
He said the non-review of the Act over the years had led to loss of $21 billion to Nigeria.
He said Nigeria stand to gain additional N30 billion monthly if the Act is reviewed and amended. This, Ubah said, would boost the nation’s revenue profile.
Contributing, Senator George Sekibo, (PDP-Rivers), said the PSC was an additional opportunity for Nigeria to make money, adding that there was an urgent need to review the Act.
He said cabals in the oil sector were frustrating attempts to review the Act over the years.
Contributing to the motion, former Benue State governor, Gabriel Suswam, argued that in view of the unrealistic nature of Federal government’s revenue projections of N160 billion for the 2020 fiscal year, it has become very urgent to review the PSC Act to increase government’s revenue.
Other senators, who supported the review included Stella Oduah, Rochas Okorocha, Adamu Aliero, Gabriel Suswam among others.
The senate in its resolution also mandated its committee on petroleum resources upstream to investigate reasons for failure to review the Act over the years.
In his ruling, President of the Senate, Dr Ahmad Lawan said the bill for the review of the Act would be presented for second reading in the next legislative day.
He urged the senate to give the PSC amendment bill expeditious debate and passage when presented.
