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November 26, 2019

$62 b PSC: Pay your debt to FG- AGF warns oil firms

$62 b PSC: Pay your debt to FG- AGF warns oil firms

Minister of Justice and Attorney General of the Federation, Abubakar Malami

Soni Daniel, Northern Region Editor

Minister of Justice and Attorney General of the Federation, Abubakar Malami

Attorney-General of the Federation and Minister of Justice, Abubakar Malami, has asked oil companies to settle their indebtedness arising from unpaid Petroleum Sharing Contracts, PSC, which currently stands at $62.1 billion (N20 trillion) at current exchange rate.

Malami’s call is contained in a statement released by his media aide, Dr. Umar Gwandu, and made available to journalists on Tuesday in Abuja.

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The Minister noted that since the signing of Deep Offshore and Inland Basin Production Sharing Contracts Act CAP D3 Law of the Federation of Nigeria 2004 (as amended) 2019 for oil exploration in deep offshore and inland basis, the Federal Government is entitled to more shares of the oil revenue which the international companies unilaterally withheld.

The Minister also dismissed the controversy surrounding the five percent of the amount to be paid by the government to recovery agencies, saying that it was unimportant as the amount being withheld as taxes by the IOMs.

He pointed out that the five percent to be paid to recovery agencies was an unprecedented reduction from the 30 percent that previous administrations had been paying to such agencies, saying that President Muhammadu Buhari was clear on his drive to reduce leakages in the country.

Malami said,  “The five percent as a recovery fee is a product of innovation introduced by the Federal Government upon the assumption of office of the President Muhammadu Buhari as against 30% and above which was the traditional fee by the previous administration”.

“The comparative basis is not the Lagos budget as the considerable parameter, but the amount due for the recovery which in the circumstance is approximately $62.1 billion as at December 2018”.

“When you convert $62, 190,679, 793 billon into Naira it will give you an amount more than N20 trillion. By virtue of Section 162 of the Constitution of the Federal Republic of Nigeria 1999 as amended, the amount in question is more than enough for three years’ budget of the most populated African country; Federal Republic of  Nigeria considering the 2020 budget of N10.3 trillion.

Malami also said the composition of the recovery agents was also not as important as the recovery of the huge sum which belongs to the people of Nigeria and should be recouped and used for the provision of critical services for the teeming population.

It will be recalled that three oil producing states of Bayelsa, Rivers and Cross River had filed an action in the Supreme Court on 27th April, 2019 praying, among other things that “recover and pay immediately all outstanding statutory allocations due and payable to the plaintiffs”.

On 19th January, 2018, Trobell International (Nig) Ltd forwarded proposal to the Office of the Attorney-General of the Federation requesting to be engaged as an agent to recover diverted proceeds of the Governments of Nigeria due from the share of profit oil under the various Production Sharing contracts made pursuant to sharing contract made pursuant to Section 16(1) of the Deep Offshore and Inland Basin Production Sharing Contracts Act CAP D3 Law of the Federation of Nigeria 2004.

Following the approval for Trobell International (Nig) Ltd to undertake the task on April 12th 2018, the company engaged the services of lawyers, engineers, financial experts and petroleum experts nominated by the three state governments to carry out the assignment.