The Chairman, Petroleum Technology Association of Nigeria (PETAN), Mr. Bank-Anthony Okoroafor, has warned that the Deep Offshore and Inland Basin Production Sharing Contract (PSC) Act recently signed into law by President Muhammadu Buhari may lead to decline in oil production between 2020 and 2021.
This, he explained, could happen if the federal government does not take measures to attract new investment in the nation’s oil and gas industry.
Okoroafor stated this in an interview with THISDAY.
He said: ”The implications of the amended deep offshore and inland basin act are: All PSC productions will now attract royalty based on combination of water depth and oil price.
“Before this Act, we had zero royalties from Agbami, Akpo, Bonga, Erha, our biggest producers.
”Now, 10 per cent flat royalties on these prolific producers based on water depth and 2.5 per cent royalties based on today’s oil price at $58
”Yes, the government will get more money from the existing oil assets in the short term – 2020 to 2021. Thereafter, production decline without new investment will hit Nigeria. They need to understand that the impact is that new investments are the negative consequence.”
Continuing, he said: “The question now is, what plans has government to attract investments in deep offshore? Are we going to lose more than $70 billion future investment?”.