By Michael Eboh
The Nigerian National Petroleum Corporation, NNPC, yesterday, called for an increase in royalties across all categories in the Deep Offshore and Inland Basin Production Sharing Contract, PSC, in the petroleum industry.
A statement by Mr. Bello Rabiu, Chief Operating Officer, Upstream, of the NNPC, said that the corporation made the proposal at a presentation to the Joint House of Representatives Committees on the amendment of the PSC Act and an Act to establish the National Oil and Gas Museum and Research Centre in Oloibiri.
He further proposed key amendments to the Act, which he claimed would enable the Federal Government optimize the collection of royalties and other revenue in deep water oil production activities and also increase government take.
The NNPC is also proposing the scrapping of incentives to oil companies in the areas of investment tax credit, investment tax allowance and associated cost uplift and capital allowances to PSC contractors.
“It is our opinion that these incentives have outlived their usefulness and are now impediments to the Federal Government’s revenue collection efforts. The use of such incentives can be terminated by an amendment of section 4 of the Act,” the Corporation noted.
The NNPC noted that the proposal for an increase in the royalty rate for terrains beyond 1,000 metres, from zero per cent to three per cent, is commendable adding that it was also necessary to make corresponding adjustments in other categories.