- RMAFC Backs Buhari on Oil Production Sharing Contracts’ Review
The Revenue Mobilisation Allocation and Fiscal Commission has thrown its weight behind President Muhammadu Buhari on the approval given to the Nigerian National Petroleum Corporation to enable it undertake a review of all Production Sharing Contracts between it and its various partners to reflect current realities.
In a statement made available by the RMAFC spokesperson, Mr. Ibrahim Mohammed, the commission said it had since called for the review of the Production Sharing Contracts as approved by the Federal Executive Council at its meeting held on December 13, 2017.
Mohammed quoted the RMAFC Acting Chairman, Mr. Umar Gana, as saying that the failure of the government to review the contracts in the past nine years had led to the loss of N21bn by the country.
Gana said, “The commission views the move by the Federal Government as a welcome development and commendable. As the commission that has the constitutional responsibility of monitoring revenue accruals into and disbursement of revenue from the Federation Account, we have consistently called for the review of these contracts for the past seven years.
“These contracts had not been reviewed nine years after both conditions stipulated in the relevant provisions of the Act had elapsed, thereby leading to the huge revenue loss of about $21bn by the country in the last 20 years.”
The RMAFC recalled that the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, recently announced that the government had approved steps to amend Section 17 of the Deep Offshore and Inland Basin Production Sharing Contracts Act, 1999, which specifically provided that the 1993 PSCs should be reviewed once the price of crude oil exceeded $20 a barrel or 15 years after the contracts i.e. 2008.
The commission advised that the government should take appropriate steps to ensure the review of the agreements with due diligence.
