Senate: Nigeria Loses N7tn for Failing to Amend PSC Act

  • Set to review oil law to boost revenue
  • To allocate more funds to security agencies to fight insecurity

Deji Elumoye in Abuja

The Senate Wednesday lamented the loss of about N7 trillion ($21billion) by the federal government over a 20-year period due to failure to review and amend the Production Sharing Contract ( PSC) Act.

It has, therefore, resolved to amend the Act with a view to boosting the nation’s revenue base.

To this end, a draft of the bill to amend the PSC Act will be presented for debate at Senate plenary today.

The resolution of the upper chamber was sequel to the consideration of a motion titled: ‘Urgent need to review and recover additional revenue accruable to the Government of the Federation from the Production Sharing Contracts pursuant to Section 16 of the Deep Offshore and Inland Basin Production Sharing Contract Act’ sponsored by Senator Ifeanyi Patrick Ubah (Anambra South) and 33 other senators.

The Senate also mandated its Committees on Petroleum Resources (Upstream), Finance and Judiciary to investigate the reasons for the failure to review the provisions of the Production Sharing Contract (PSC) Act before now.

President of the Senate, Ahmad Ibrahim Lawan, while summing up the decision of the Senate on the motion emphasised that Nigeria’s economy will gain significantly if the Act was amended.

According to him, “the monies can be injected into financing the 2020 budget. This is one important and patriotic motion we have taken so far in the Ninth Senate.

“Let me say that tomorrow (Thursday), the bill that needs to be amended is coming up at plenary for consideration and I believe what we need to do is to give it the most expeditious consideration ever.

“We also pray the executive arm of government will give it expeditious treatment because this is one bill that if amended and signed, will give us N160 billion proposed for the 2020 budget. So time is of essence here, and therefore, we will do everything possible to pass it, and of course follow it up, so that the effect is seen in money available to finance the 2020 appropriation which will be presented possibly next week,” he stated.

Presenting the motion earlier, Ubah had said the non-review and amendment of the PSC Act had cost the federal government about $21 billion (about N7 trillion) in the last 20 years.

“Nigeria, having lost trillions of naira due to non-review of the PSA Act, stands to gain an additional sum above N30 billion naira monthly (360 billion naira annually) if the Act is reviewed and amended,” he added.

Contributing, Senator George Sekibo (Rivers East) frowned upon the attitude of the executive, the operators of the law, saying it was agreed that the sharing formula be reviewed when the price of crude oil moved to $20.

“The price of crude has since 1999 been on the rise; it was supposed to be revised after 15 years since the law was formulated. The country can make more money from PSC, but it hasn’t. Why have we failed? I understand that there is a cartel frustrating it because they make money at the expense of Nigeria. The president must personally take this upon himself and recover all the outstanding arrears,” he said.

Senator Gabriel Suswam (Benue North East) stressed the need to understand the PSC and how the international oil companies investing are recouping their investments, adding that he is supporting the motion so as to ensure that more money comes to government.

On his part, Senator Opeyemi Bamidele (Ekiti Central), stated that those who enacted the PSC Act were conscious of the fact that it must be dynamic, “but no review has been done after 15 years as stipulated.”

“ It even said subject to crude oil price but we have refused to review it for whatever reason and everybody watches Nigeria bleed. We must do something to save this country. There must be cost recovery ceiling, it is 50% in Angola and you can’t go beyond it. We must stop Nigeria from bleeding. Whatever needed to be done must be done,” he added.

Senator Rochas Okorocha (Imo North) attributed the inability to review the PSC Act to those in charge, saying some of these agencies have failed the people and have failed the Nigerian nation.

He said: “We must call these oil companies to order. I think there is need in assigning responsibility to the committee to recover the lost funds, and the oil companies need to sit up and clear the mess they have created.”

On his part, Senate Leader, Senator Yahaya Abdullahi (Kebbi North), said: “We must rise up to the occasion and block the leakages by referring this matter to the Committee on Finance and Committee on Human Rights to make sure that the revenue accruing to us from the PSC are brought to us.”

Also yesterday, the Senate resolved to make urgent budgetary allocation to security agencies to fight the rising wave of insecurity across the nation.

It also pledged to ensure that the National Assembly passed an anti-kidnapping bill to address recurring incidents of kidnapping nationwide.

The decision was sequel to the adoption of a motion moved at the plenary by the Chairman of the Senate committee on Aviation, Senator Dino Melaye, who expressed concern over the activities of kidnappers along Lokoja-Abuja Expressway, which resulted in the kidnapping of 36 people in September alone.

Melaye, who came under Orders 42 and 52 of the Senate Rules, also said a total of nine lives were lost during the incident last month.

The Senate after taking contributions from the Senate Minority Leader, Senator Enyinnanya Abaribe and Chairman of the Senate committee on Marine Transport, Senator Danjuma Goje, condemned the incessant kidnapping and vowed to ensure the formulation of an anti-kidnapping legislation to address the anomaly.

It also agreed to provide more funds to security agencies to allow them tackle the rising wave of insecurity across the country.

Earlier in his motion of urgent national importance, Melaye had drawn the attention of the Senate to the activities of kidnappers on Lokoja-Abuja Expressway, the gateway to about nine states.

According to him, it is the responsibility of the Senate to uphold the tenets of the constitution, “as we should display citizen diplomacy where the lives and property of Nigerians are sacred as kidnapping is now becoming ritualistic, not only on Abuja-Lokoja road, but on every other road across the country”.

He therefore asked the Senate to call on the security agencies to secure the Lokoja-Abuja highway and all other roads in the country as well as asking the Inspector General of Police to intensify efforts to protect lives and property.

Lawan, in his contribution, stressed the need to review the security apparatus of the nation, saying Nigeria is not getting the best from its security agencies.

“Recall that the Senate had mooted for a public hearing to review the security architecture because the way they are we aren’t getting the best from them and we can’t go on like this.

“Our Committee on Communication needs to hear from the Minister of Communication to know how far they have gone with unregistered lines. We need to do something radical: the military and other security agencies must not use the train, they must secure the roads. We need to increase their funding but we must know what they do with it.

“The time has come for our security forces to go technological, technology like drones must be deployed to improve the efficiency of what they do. We should also review the security architecture and must see the value of what they collect while we improve their funding,” he said.