President Muhammadu Buhari, who is on a two weeks private visit to the United Kingdom, said he has signed the Deep Offshore and Inland Basin Production Sharing Contract (PSC) Amendment Bill into law.
The law will significantly increase Nigeria’s share of earnings earned from oil wells offshore the country.
The bill was approved by the National Assembly a fortnight ago and submitted to the president for the final assent into law.
The President announced the signing of the law through a post on his official Twitter handle, @MBuhari on Monday afternoon.
“This afternoon I assented to the Bill amending the Deep Offshore (and Inland Basin Production Sharing Contract) Act. This is a landmark moment for Nigeria; let me use this opportunity to thank the National Assembly for the cooperation that produced this long-overdue amendment,” the President said on Monday.
The Deep Offshore and Inland Basin Production Sharing Contracts Act was enacted on March 23, 1999, with its commencement backdated to January 1, 1993.
However, for some time, there has been disagreement between the government and international oil companies on the need to review the law to reflect current realities.
Section 16 (1) of the Deep Offshore and Inland Basin Production Sharing Contracts Act Cap. D3. LFN 2004 spelt out the conditions under which the PSCs should be reviewed.
The provisions of the Act stipulates that the law shall be subject to review to ensure that if the price of crude oil at any time exceeds $20 per barrel, the share of the revenue to the Nigerian government shall be adjusted under the PSC.
The essence of the adjustment of the sharing formula was to ensure that the Production Sharing Contracts shall be economically beneficial to the government of the federation.
Of late, the Federal Government through the Office of the Attorney General of the Federation and Minister of Justice, Abubakar Malami, has been making a case for the recovery of over $62 billion from the IOCs as arrears of revenues that should have accrued to Nigeria over the years that oil sold above $20 a barrel.
Malami accused the IOCs of frustrating efforts in the past for the government to negotiate the review of the PSC.