Chineme Okafor in Abuja
The House of Representatives ad-hoc committee investigating how Nigeria may have failed to collect about $21 billion of revenue from oil produced overtime from oil fields in the deep water basins of the country has squarely blamed the Department of Petroleum Resources (DPR) for the country’s losses.
The huge loss was incurred because, for years, Nigeria did not activate a clause in the Deep Offshore and Inland Basin Production Sharing Contract (PSC) Act that guided oil production in the basins.
The committee said on Thursday at an interactive session with stakeholders which included relevant government agencies and International Oil Companies (IOCs) in Abuja, that there was no way the DPR could be exonerated from failing Nigeria in this regards.
It said since it was the responsibility of the DPR to regulate the country’s oil sector, it was thus mandated to follow up and trigger the terms in the Act which stated that calculation of royalties due to the government from oil production as covered by the Deep Offshore and Inland Basin Production Sharing Contract (PSC) Act should be reviewed once the price of oil got to $20 per barrel or after 10 years of the Act in practice.
In 2017, the the Minister of State for Petroleum, Dr. Ibe Kachikwu, stated that Nigeria lost a whopping $21 billion to its failure to implement the premium element governing the PSCs as provided under the Act, and disclosed the government had initiated moves to amend the Act which was enacted in 1993 to provide the fiscal framework for foreign investments in deep offshore and inland basin acreages in the oil and gas sector.
But speaking to reporters at the meeting where most of the government agencies that attended – DPR; Federal Inland Revenue Services (FIRS); as well as Ministries of Finance an Justice – appeared clueless as to what went wrong with the enforcement of the Act, the Chairman of the committee, Hon. Daniel Reyenieju, explained the delay in activating the clause was chiefly the fault of the DPR.
Reyenieju, noted that if the DPR was sensitive to its regulatory functions, it would have acted as soon as the clauses became obvious, and saved the country from losing such huge amount of money.
“The DPR will be held responsible for the PSCs delay. No, I’m not impressed but that is a process, we are just building up and will get to a status where we will mandate all of them,” said Reyenieju, who took time to ask questions the government agencies either parried or provided inadequate answers to.