FEC moves to recover $2bn oil revenue via amendment of off shore Act


The Federal Executive Council (FEC) presided over by Vice President Yemi Osinbajo, on Wednesday approved the amendment of section 15 of the Production Service Contract of Deep Offshore Act to increase government’s crude oil revenue by two billion dollars.

The Minister of State for Petroleum, Dr Ibe Kachikwu, said this while briefing State House Correspondents on the outcome of the FEC meeting.

According to him, the proposed amendment was to implement an aspect of the Act which supported the amendment if crude oil price exceeds $20 per barrel.

“For Pretroleum three key interventions today; the first for me and more substantial is the decision to work with the Attorney General to amend section 15 of the PSC (Production Service Contract) of the Deep Offshore Act.

“Under the Deep off shore Act there was a provision in 1993 that once the price of crude exceeds $20 per barrel the government will take steps to ensure that that premium element is then distributed for the nation so that we get more from our oil.

“But over the last 20 years, nothing really was done.

“From 1993, cumulatively between then and now 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 did not follow through by going to council to get approval.

“So, one of the things we have worked on very hard over the last 20 years is to get that amendment because once we do the net effect for us is close to N2 billion extra revenue for the federation.’’

The Minister added that the other intervention was the award of a contract of more than $2.7 billion to three consortia to complete the Abuja – Kaduna – Kano (AKK) pipeline to move gas from South to North to boost power generation.

He said that the country had suffered strapping of gas in the southern corridors because of lack of infrastructure.

Kachukwu stated that the programme was partially done and the contract had lasted for more than 13 years.

“We have given approval for that today and that is going forward very nicely,’’ he stated.

The Minister added that FEC awarded a contract to a consortium for the Odidi gas pipeline from the Warri and the Southern marshlands to move the additional gas produced through NDDC, about 364 million scrubs of gas into the AKK.

He stated that the measures were all part of the gas gathering mechanism to boost gas delivery for power and also move the country from a crude nation into a gas environment.

On the current fuel scarcity, the minister noted that queues were disappearing due to concerted efforts of the government.

He said that the gaps witnessed, in terms of delivery by the private sector, were addressed through premium purchase and logistics.

According to him the price for fuel importation rose due to increase in crude oil price thus making the private sector unable to cope with importation of the refined products.

He said the solution to fuel scarcity was to get all the nations refineries working at full capacity.

He said “refining is key’’ and urged those trying to hoard the commodity to desist as there was no plan to increase the pump price of fuel.

He said that any fuel station caught hoarding would be made to lose as the product in the station would be dispensed to buyers free.

Also speaking, the Niger Delta Affairs Minister, Mr Usani Uguru Usani, said FEC approved the completion of the NDDC headquarters for a contract sum of N16 billion.

He said the project was left hanging for more than 33 years and the Commission accumulated huge rent bills of N2 billion in the past 12 years which was uneconomical to it and the federal government.

The minister stated that the savings would be applied to other development services.
The Minister of Transportation, Mr Rotimi Ameachi, who also spoke on the outcome of the council’s meeting, said 500 million dollars was approved by the council for the purchase of coaches, wagons, locomotives for Lagos-Ibadan and Itakpe-Warri railways.

The minister dismissed the insinuation that railway projects were only being executed in the northern and south west parts of the country.

He disclosed that the Federal Government was sourcing for more funds to enable it execute railway projects across the country.

Ameachi, therefore, warned against politicising the railway projects as efforts were onto ensure equitable distribution of the projects among the 36 states of the federation and the Federal Capital Territory (FCT).

“Let think Nigeria. Why I said let think Nigeria is that the federal government has said we have no money but we are going to borrow to ensure that we get to all the state capitals and we are in the process of getting that loan.

“But we are getting pressure from all sides politicising the railway projects. Railway projects should not be politicised, it should be left as an economic driver. It drives even oil because if you import liquid cargo (of oil) we transport it by rail,’’ he added.

He revealed that the council also approved the rehabilitation of Ikorodu Lighter Terminal as well as the procurement of patrol boats for Nigerian Ports Authority (NPA) to provide security in the nation’s water ways.

Also speaking on the outcome of the meeting, Malam Garba Shehu, the Senior Special Assistant to the President on Media and Publicity, said the council also approved N2.67 billion to fortify security at University of Maiduguri.

He said that the amount would be used to fence the university and safeguard and secure it from possible attacks from outsiders.

The presidential aide disclosed that the council also approved a new draft bill tagged, “Nigerian Minerals and Mining Bill 2017’’, saying that the bill would soon be forwarded to the National Assembly for approval.

Shehu revealed that the council approved the rehabilitation of Zaria-Funtua-Gusau-Sokoto-Birnin Kebbi road.(NAN)

About Nigeria

Nigeria, commonly known as the giant of Africa with more than 150 million people is the most populous country in Africa. With one of the biggest democracies in the world and a presidential system of government, it has a dual economy, based on its rich natural resources, traditional agriculture and the trade sector.