Fresh discovery pointing to the fact the rushed oil and gas Production Sharing Contact (PSC) amendment Act recently signed into law by President Muhammadu Buhari while away in London on a private visit was faulty, has emerged.
Recall that several oil and gas multinationals’ and industry experts had viewed the entire amended law as hasty and noncompliant to currently industry realities as it did not consider adequately the cost implications of International Oil Companies (IOCs) in explorations of oil and gas.
Besides, series of latest decisions by IOCs to divest or even begin to sell off some of their mega stakes in Nigerian oil industry remain issues that must bother policy makers and drivers of government policies.
At plenary last week, the House of Representatives called on the Federal Government to include gas in the PSC after observing that it amounts to a huge error for the Executive not to include gas component in the Bill ahead of transmitting same to the National Assembly.
Otherwise, House Members in unison, urged the Federal Government to review the contract terms in the PSC, with a view to accommodating gas terms such as the gas development agreements, cost recovery and profit sharing.
Passing the resolution on the Motion moved by Hon. Kolawole Lawal, the House mandated the Committee on Petroleum (Gas) to liaise with all the contracting parties to the PSC, including the Department of Petroleum Resources, the Nigerian National Petroleum Corporation and all other relevant stakeholders “to determine the current situation in the gas sector and create ways to attract investments as well as set out terms that would grow the economy with special reference to a legal backing to the pricing mechanism.”
Business Hilights recalls that while moving the motion, Hon Lawal had argued that “Gas is set to take over the petroleum industry because of the quest for alternative energy sources; hence, the neglect of income from gas only spells doom for the economy as there is no check on the fraudulent activities of operators.
“The House is also cognizant (of the fact) that an estimated 60 trillion cubic feet of gas is located in the offshore gas blocks covered by the PSCs and they are either flared or capped as of today. Gas terms for offshore PSC blocks will help unlock more trillion cubic feet of gas for Nigeria’s domestic gas market and it is of utmost importance that the irregularities are remedied with immediate effect.”
Also agreed on was a fresh mandate on the House Committee on Gas to effect the necessary amendment to the PSC Act, with a view to accommodating gas terms accordingly.
