Attorney-General of the federation and Minister of Justice, Abubakar Malami, has increased the value of monies owed by oil companies operating under the 1993 production sharing contract from the $21bn to N6.43trn pronouncement made by Ibe Kachikwu, former Minister of State for Petroleum, to $62bn – 18.97trn.
Malami made this computation in an interview with Reuters on Thursday.
He said, “Computing the amount that should be credited to the Nigerian Government if the law was effectively applied, that translates to around $62bn against the international oil companies.”
Central Bank of Nigeria governor, Godwin Emefiele, who had also spoken with the British news agency at the time, blamed the IOC’s for intentionally refusing to trigger an event for the review of the contract terms.
Reuters revealed that industry and government sources said Royal Dutch Shell, Chevron, Exxon Mobil and Eni were each asked to pay the government between $2.5bn and $5bn.
Shell said that the government’s claim is in court and it does not agree with the legal basis of the intent.
Section 16 of the Deep Offshore And Inland Basin Production Sharing Contracts Act, which was first signed in 1993 and amended in 1999, provides for the contract to be reviewed every 15 years and for oil companies, who operate the offshore fields to review the revenue sharing contracts to favour the Nigerian Government more once a barrel of oil sold for $20 and above.
The former condition was due in 2008 from the date of the first PSC’s in 1993, while the latter was due around 2003.