The House of Representatives on Tuesday concurred passed the Offshore and Inland Basin Production Sharing Contract Act 2014 amendment Bill, thereby concurring with the upper chamber’s earlier stance on the provisions.
Specifically, following the second and third readings of the bill during plenary, the lawmakers amended Section 5 of the principal Act, which now reads: “(1) Royalties shall be calculated on a field basis. The royalty shall be at a rate per centum of the chargeable volume of the crude oil and condensates produced from the relevant area in the relevant period as follows: In deep offshore greater than 200 metres water depth – 10 per cent; in frontier/inland basin – 7.5 per cent.
“(2) Royalty by price is adopted in order to allow for royalty reflexivity based on changing prices of crude oil, condensates and natural gas. This also replaces the necessity for Section 16 of the principal Act.
“(3) The royalty based on price shall be identical for the various water depths in deep offshore – beyond 200m water depth, including frontier acreages for crude oil and condensates.
“(4) The royalty rates shall be based on increase that exceeds $20 per barrel, and shall be determined separately for crude oil and condensates as follows: From $0 and up to $20 per barrel – 0 per cent; above $20 and up to $60 per barrel – 2.5 per cent; above $60 and up to $100 per barrel – four per cent; above $100 and up to $150 per barrel – eight per cent.”
In addition, they now inserted a new Section 17 which also reads: “The minister (of petroleum resources) shall cause the corporation (Nigerian National Petroleum Corporation) to call for a review of production sharing contracts every eight years.”
This is even as the bill’s new new Section 18 criminalises any abuse of the law and prescribed punishments.
It reads: “Any person who fails to comply with any obligation imposed by any provision of the bill commits an offence and is liable on conviction to a fine not below N500,000,000 or an imprisonment for a period not (more or less: not indicated) than five years or both.”
On some pointed raised by some lawmakers on the PSC and the Petroleum Industry Bill (PIB), the Speaker, Femi Gbajabiamila, said: “We have noted the contributions by Honourable Isiaka Ayokunle and Honourable Toby Okechukwu. I am sure that as we go on, in the future, there might be the need to merge this with the PIB when it eventually comes up again.”
It would be recalled that the upper chamber of the National Assembly had on October 15, 2019 unanimously passed the PSC amendment bill, with the Senate President, Ahmad Lawan, projecting that if the current provisions are enacted into law, Nigeria had the potential of raking in additional $1.5 billion yearly.
