The Senate on Tuesday passed the Deep Offshore and Inland Basin Production Sharing Contract Act 2004 (amendment) Bill 2019.
The bill was passed by the upper chamber after consideration of the report of the Joint committees on Petroleum (Upstream), Gas and Finance, in a bid to shore up Nigeria’s revenue earnings.
With the passage of the bill, it is estimated that Nigeria stands to benefit about N400 billion being revenue due to the federal government from International Oil Companies (IOCs) operating in the country.
The Senate, during the clause-by-clause consideration of the committee’s report, however amended clause 17 of the Act, which recommended 10 years for a future review of the law.
The Deputy President of the Senate, Ovie Omo-Agege, during consideration of the report, demanded explanation from the Joint committee as to why the timeline for review of Production Sharing Contracts was amended from five years to 10 years.
In his response, Chairman of the Committee, Senator Albert Bassey Akpan, explained that the Nigerian National Petroleum Corporation (NNPC) and International Oil Companies bemoaned the five-year period which they said was insufficient to take certain final investment decisions.
“It takes about five years for an investor to take a Final Investment Decision oil investment (FID). So the NNPC and others are saying for you to review the law, you must give them a stable law; something they can project on”, Akpan said.
After deliberations on the clause by the lawmakers. Senator Ibikunle Amosun (APC, Ogun Central), however prevailed on his colleagues and moved a motion for an amendment of clause 17 to specify eight years as the timeline for the review of the Production Sharing Contracts.
The motion was seconded by Senator Kabiru Gaya (APC, Kano South) and thereafter adopted by the upper chamber when put to a voice vote by the President of the Senate, Ahmad Lawan.
In his remarks, the President of the Senate said the National Assembly made history with the passage of the Bill for an amendment of Production sharing Contracts Act.
He said: “We have done what could not be done since 2003 to date. Today marks a milestone in the history of the Senate, and particularly the National Assembly.
Lawan emphasised that the amendment of the Production Sharing Contract Act will create a level playing ground for the government and International Oil Companies doing business in Nigeria.
“For the IOCs doing business in Nigeria, the amendment will not in anyway discourage investment. We expect that they will continue to do business in Nigeria,” adding that the National Assembly will always be mindful of the need to have a competitive environment.
“When we work on the Petroleum Industry Bill, maybe in January, we will ensure that it is a win-win situation for Nigerians and those doing business in the oil and gas industry”, Lawan said.