MMS PLUS NG – Maritime, Aviation, Business, Oil and Gas News Online Newspaper with coverage in Maritime, Oil and Gas, Aviation, Power and Energy as well as Financial News
International oil companies operating in the country are opposed to the claim by the Federal Government that they owe as much as N62bn with respect to Production Sharing Contracts.
Last month, the President, Major General Muhammadu Buhari (retd.), signed the bill that amended the Deep Offshore (and Inland Basin Production Sharing Contract) Act after its passage by the National Assembly.
The Attorney General of the Federation, Malami Abubakar, has repeatedly asked the IOCs to pay $62bn (over N20tn) owed the Federal Government with respect to the PSCs.
Top officials in some of the IOCs told our correspondent on condition of anonymity that the oil producers had expressed their disagreement with the claim by the Federal Government.
When contacted, the Oil Producers Trade Section, whose membership includes the oil majors, declined to comment on the matter.
The Communication and Government Relations Manager, Roli Majiyagbe, told our correspondent to refer to a memo that outlined the OPTS’ position on the Deep Offshore and Inland Basin Production Sharing Contract Amendment Bill.
“For any further enquiries, it would be the responsibility of individual member companies to respond on particular issues. I would advise that you kindly reach out to them accordingly,” she said.
In the memo, which was presented to the Senate in October before the bill was amended, the OPTS said the Federal Government’s planned increase in deepwater royalty would worsen Nigeria’s competitiveness and make $15bn of currently planned deepwater investments economically unviable.
Shell Nigeria Exploration and Production Company, a Shell subsidiary formed in 1993 to develop Nigeria’s deepwater oil and gas resources, disagreed with the government over the $62bn claim.
“We do not agree with the legal basis for the claim that we owe outstanding revenues and the matter is pending before the court,” a spokesperson for SNEPCo, Mr Bamidele Odugbesan, told our correspondent in an emailed response to questions.
A spokesperson for Total, Mr Charles Ebereonwu, declined to comment, saying, “Please I have no comment on the subject of this enquiry.”
Spokespersons for Chevron, Mobil Producing Nigeria Unlimited and Nigerian Agip Oil Company (a subsidiary of Eni) did not reply to emails seeking comments.
The OPTS, in its October presentation to the Senate obtained by our correspondent, said the “proposed unilateral change” to the current terms would damage investors’ confidence and make the country’s deepwater and inland basin PSC less attractive in the wake of stiffening global competition for investable funds.
The nation’s oil and gas production structure is majorly split between joint ventures onshore and in shallow water with foreign and local companies and the PSCs in deepwater offshore, to which most of the IOCs have shifted their focus in recent years.
