Business Hilights
Tracking Nigeria's Headline Business News Online

AEEPM to sue FG over loss of $12bn to delays in amending Deep Offshore Act 1993

Leading non-governmental organisation (NGO), the Africa Environmental & Economic Peace Mission (AEEPM), weekend at a press conference in Lagos, expressed its readiness to drag the federal government to court to seek damages on behalf of Nigeria and Nigerians over its negligence to allow for the loss of over $21bn to the country in the last 20 years.

The loss according to the group is incurred from the delay both by current and previous governments in exploiting the opportunity of the Deep Offshore Act (DOA) that made provision for premium element to be shared once the price of crude exceeds $20 a barrel.

It would be recalled that price of crude oil had exceeded $20pb for more than 20 years.

Minister of State for Petroleum Resources, Dr. Ibe Kachikwu had after last week’s Federal Executive Council (FEC) meeting opened up saying “Nigeria has lost $21 billion to oil Production Sharing Contact (PSC) in the 20 years as previous governments failed to exploit the opportunity of the Deep Offshore Act that made provision for premium element to be shared once the price of crude exceeds $20 a barrel”.

Though he hinted that the FEC meeting saw the approval to amend Section 15 of the PSC of the Deep Offshore Act, AEEPM argued during the conference that it will still go ahead with the suit.

In his address, the Director of legal services at AEEPM, Dr. Dan Agu, said “Part of the change agenda Nigerians had voted for included correcting every aspect of the nation’s economic life and only pursuing tax evaders”.

“A government that left key areas it will make money seamlessly and kept frustrating the activities of business developers in the name of tax reforms must be forced the do the right thing and also pay for not doing the right thing on time.

“Look at what Nigeria had been losing because this administration failed to understanding, on time what to do to make money by simply amending only section 15 of the PSC Act.

Nigeria is also losing much and wasting hard currencies in searching for hydrocarbons in the Benue Basin and Chad basin and recently Sokoto Basin while there are age long confirmed oil wells in commercial quantity in Cross Rivers, Ebonyi and Anambra states begging for exploration.

AEEPM added that “Time has come for Mr. President to relinquish his position as the Minister of Petroleum Resources and concentrate as President and Commander in Chief so that a technocrat can take over and turnaround the sector for the interest of Nigeria and Nigerians”.

“Part of the issues we would like the court to interpret is whether Mr. President will be a president and still maintain another paid job as against the provisions of Section 138 of 1999 Constitution.

AEEPM said whether the present government is about to do the needful on the matter of amending the PSC Act or not, it will approach a Court of competent jurisdiction for redress.

Kachikwu had noted last Wednesday that “The first and most substantial for me is the decision to work with the Attorney-General to amend Section 15 of the PSC of the Deep Offshore Act”.

”Under the Deep Offshore Act, there was a provision in 1993 that once the price of crude exceeds $20 a barrel, the government will take steps to ensure that that premium element is then distributed at an agreed premium level for the Federal Government so that we get more for our oil.

”But over the last 20 years, nothing really was done. From 1993 to now, cumulatively, 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 didn’t follow through in terms of going to council to get approval

“One of the things we’ve worked on very hard over the last one year is to get that amendment because once we do, the net effect for us is close to $2 billion extra revenue for the federation.

Kachukwu added that “Let me just say that however we do it, we would definitely try to see whether a possibility exists for claw back some advantages. Let me just keep it at that.”