Deep Offshore and Inland Basin Production Sharing Contract (Amendment) Bill 2019.

Recently, a bill for an Act to amend the Deep Offshore and Inland Basin Production Sharing Contract Act, (the Bill) passed the third reading at the Senate and currently awaits passage at the House of Representatives.

The amendment appears to be in the wake of growing calls from various quarters, for a review of the fiscal terms under the PSC, in order to secure more favourable terms for the Federal Government of Nigeria (FGN), based on Section 16 of the Deep Offshore and Inland Basin Production Sharing Contracts Act, Cap D3 LFN, 2004 (the Act) which provides that the Act shall be subject to a periodic review to ensure that if the price of crude oil at any time exceeds $20 per barrel, real terms, the share of the FGN in the additional revenue shall be adjusted under the PSC in such a way that will make the PSC economically beneficial to the FGN.

It would also be recalled that in 2018, the Supreme Court (SC) gave a consent judgment in respect of an action instituted by three States – Rivers, Bayelsa & Akwa Ibom, against the FGN, in terms amongst others, that the FGN acting in concert with the plaintiffs, should put in place the necessary mechanism for the recovery of all lost revenue accruing to the Federation Account under the PSCs from the respective times the price of crude oil exceeded $20 per barrel.

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