Minister of State for Petroleum Resources Ibe Kachikwu said yesterday that Nigeria has lost $21 billion to oil Production Sharing Contact (PSC) in the 20 years.
According to him, previous governments failed to exploit the opportunity of the Deep Offshore Act that made provision for premium element to be shared once the price of crude exceeds $20 a barrel.
He said yesterday’s Federal Executive Council (FEC) meeting approved steps to amend Section 15 of the PSC of the Deep Offshore Act.
Kachikwu spoke to reporters at the end of the FEC meeting chaired by Vice President Yemi Osinbajo at the Presidential Villa in Abuja.
Kachikwu said “The first and most substantial for me is the decision to work with the Attorney-General to amend Section 15 of the PSC of the Deep Offshore Act.
”Under the Deep Offshore Act, there was a provision in 1993 that once the price of crude exceeds $20 a barrel, the government will take steps to ensure that that premium element is then distributed at an agreed premium level for the Federal Government so that we get more for our oil.
”But over the last 20 years, nothing really was done. From 1993 to now, cumulatively, we have lost a total of $21 billion just because government did not act. We did not exercise it.
”In 2013 there was a notice to oil companies that we were going to do this but we didn’t follow through in terms of going to council to get approval
”One of the things we’ve worked on very hard over the last one year is to get that amendment because once we do, the net effect for us is close to $2 billion extra revenue for the federation.
”Let me just say that however we do it, we would definitely try to see whether a possibility exists for claw back some advantages. Let me just keep it at that.”
The minister reiterated that there was no plan to increase the pump price of fuel.
Speaking on the billions spent to maintain existing refineries and efforts to build new ones, he said: “I believe that the refineries can be fixed, we came up with a model to find private sector funding into these refineries that’s being done, we expect that before the end of this year, we will at least get to the final contracting stage in terms of announcing those who are going to take this up, it takes about six months to do this and do it thoroughly but that requires raising close to N2 billion from private sector participants to get this done.
”A lot is being done on refining that is because we have focused on it too much to the point where I have put my credibility on the line and that’s fine and we have said it is important that we stop importing petroleum products there is just no justification for it.
”We have encouraged private sector, Dangote is working very hard, I have told the officials of Dangote that as opposed to the 2020 completion period they are looking at they should assist us by trying to deliver this in 2019 hopefully.
”For our own refineries, if we complete the procurement processes by the end of this year, they would begin their 12-18 months resuscitation or turn around maintenance (TAM).