The Federal Government has disclosed that the country, between 1993 and 2017 lost over N7.6 trillion (about $21bn) due to faulty agreements with some multinational oil companies. The Minister of State for Petroleum Resources, Ibe Kachikwu stated this on Wednesday while briefing State House Correspondents after the weekly Federal Executive Council meeting presided over by the Vice President, Prof. Yemi Osinbajo.
Ibe Kachikwu disclosed that the worrisome loss was due to the failure of the government to act on the provision of Section 15 of the Production Sharing Contracts of the Deep Offshore Act.
According to him, the Act stipulates that "once the price of crude exceeds $20 per barrel, steps would be taken to distribute “premium element” at an agreed premium level for the Federal Government for higher revenue. This was not the case over the last 20 years."
He hinted that to address the anomaly, FEC approved a proposal to amend the Act in order to increase oil revenue by $2bn. He hinted that the Attorney General of the Federation and Minister of Justice has been charged with the responsibility.
He further said “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 20 years is to get that amendment because once we do, the net effect for us is close to $2 billion extra revenue for the federation.”
