The Senate has mandated its Committee on Petroleum Resources Upstream to come up with a bill on amendment of the Inland Basin Production Sharing Contract (PSC) Act.
This followed the adoption of a motion by Sen. Ifeanyi Ubah, (YPP Anambra) and 30 others at Wednesday’s plenary.
The motion was on the urgent need to review Production Sharing Contract (PSC) in line with section 16 of the deep offshore and inland Basin Production Sharing Contract Act CAP D3 LFN 2004 and amend the extant Act.
Moving the motion, Ubah said the committee on petroleum resources upstream had been inundated with petitions and complaints on the PSC.
He said Federal Government over the years had lost billions of dollars in potentially accruable revenue due to non-review and amendment of the salient provisions of the PSC Act.
He said in spite of huge contributions of the PSC to total oil production, the contributions of revenue per barrel of PSC for federal government’s take had been significantly low.
This, he said was because of the inherent inequitable terms in the PSC and failure to review the salient provisions of the act.
According to him, PSC Act provides that where the price of crude oil exceeds 20 dollars per barrel, the Act will be reviewed to ensure that federal government share in the additional revenue is adjusted.
He also said that the act provided that it may be reviewed after 15 years from the date of its enactment in 1993 and every five years thereafter.
According to him, the non- review of the Act over the years had led to loss of 21 billion dollars to Nigeria.
He said Nigeria stand to gain additional N30 billion monthly if the Act is reviewed and amended.
This, Ubah said would boost the nation’s revenue profile.
Contributing, Sen. George Sekibo, (PDP-Rivers), said the PSC was an additional opportunity for Nigeria to make money, adding that there was an urgent need to review the Act.
He said cabals in the oil sector were frustrating attempts to review the Act over the years.
Other senators, who supported the review, were Stella Oduah, Rochas Okorocha, Adamu Alerio, Gabriel Suswam among others.
The senate in its resolution also mandated its committee on petroleum resources upstream to investigate reasons for failure to review the Act over the years.
In his ruling, President of the Senate, Dr Ahmad Lawan said the bill for the review of the Act would be presented for second reading in the next legislative day.
He urged the senate to give the PSC amendment bill expeditious debate and passage when presented.
He maintained that the bill if passed would help the country to generate fund to support execution of the budget.
The News Agency of Nigeria (NAN), reports that PSC is a contractual arrangement for petroleum exploration and production.
This is whereby the state as owner of the petroleum engages a contractor to provide technical and financial services for exploration and production operations with agreed share in profit after payment of royalty, cost and tax.
The contractual agreements were offered by the federal government in 1991 leasing round and its terms codified into legislation.
Nigeria presently has seven oil fields from the 1993 PSCs.