The minister of state for petroleum resources, Mr. Timipre Sylva, has said that the federal government will find it difficult to recover over $62 billion (about N22, 444, 000, 000, 000) judgement debt from the International Oil Companies (IOCs).
The money is revenue lost to oil exploration since 2003.
It would be recalled that the Supreme Court had on October 17, 2018 ordered the federal government to recover $62 billion it (government) claimed as arrears of profits due it from 1998 under the production sharing contracts (PSCs) between the Nigerian National Petroleum Corporation (NNPC) and its joint venture partners.
The six international oil companies with joint operating agreements with the NNPC include Shell Petroleum Development Company, Mobil Producing Nigeria Unlimited and Chevron Nigeria Limited, Nigeria Agip Oil Company, TotalElf Nigeria and Pan Ocean Oil Company.
But the six JV partners with the NNPC filed a suit at the Federal High Court in Lagos to contest the indebtedness.
However, addressing the media after the federal executive council meeting held at the Presidential Villa, Abuja yesterday, Sylva said the money should be regarded as “lost” eventhough he said the federal government had started discussions on the matter.
“Well, we have started discussions. Let us consider that as a lost opportunity, the money was not in a cupboard, they have taken it. Nobody can bring out that kind of money; I mean we can’t get $62billion.
“We can maybe get something from them but not $62 billion. It’s an opportunity we have lost. We have already started discussions with them but what is clear is that it is a lost opportunity really,” he said.
The minister further said the existing Deep Offshore Act in the country which is very old, is part of the problem and called for its review if the government could get it right in terms of production sharing contracts with the oil majors.
“Most of these laws are old already and they need to be amended. The amendment of these bills really portends a lot for us. There are a lot of missed opportunities already. The previous law provided that when oil prices went beyond twenty dollars, we are supposed to negotiate and get some additional revenues.
“We didn’t take advantage of that and, of course, when we approached the oil companies, they said look, this is a lost opportunity, it’s not lost money because this money is not just there; it is not being kept in some cupboard.
“So, it is a lost opportunity, we have to do something quickly to ensure that we don’t lose this opportunity in the future. That is why we have to ensure that this bill is passed. With this bill now, there will be some adjustments in the fiscal regime and we believe that the government will get a lot from the oil companies, especially their deep shore exploration activities.
“The PSCs means that they invest the money, they recover their cost before the government begins to get some revenues from it. Unfortunately, each time they keep investing, they keep recovering.
“So, if you don’t take time, you never really get to the point where you benefit at all because the oil companies are perpetually recovering cost.
So, with the Deep Offshore Act Amendment, all those things are taken care of,” said Sylva.
However, he said the amendment to the bill should not be retroactive.
“The amendment of the bill cannot be retroactive. Laws cannot be retroactive, we have to look forward.”