The Senate Tuesday, declared that it resisted pressures from within and outside the country to pass into law , ” Deep Offshore and Inland Basin Production Sharing Contract ( Amendment ) Bill 2019 which according to it , will be fetching the country $1.5billion on yearly from 2020.
The bill which was introduced on Wednesday last week, got expeditious consideration for second reading on Thursday the following day and third reading today in plenary for provision of required laws on contract sharing between the federal government and the various oil firms in the petroleum and Gas sectors.
In his remarks before the passage of the bill for third reading, the President of the Senate, Ahmad Ibrahim Lawan said, “the bill must be passed and concurred to, by the House of Representatives and of course, assented to by President Muhammadu Buhari who is on the same page with us on it.
“Passage of this bill today by the Senate, will put to rest , pressures being mounted on us against it from within and outside the country.
“As a patriotic Senate , there is no way we would have yielded to such pressures and deny our dear country , $1.5billion that will be accruing into her account on yearly basis based on contractual sharing agreements put in place by the new provisions which become laws when finally assented to, by the President “, he said.
While the Petroleum Sharing Contract ( PSC) Act of 1993 in its provisions in section 5, stipulated for 15 years of operation before reviewing the law , the newly passed bill , recommended 8 years for that purpose.
Section 16 of the passed bill retains the price of oil above $20 per barrel for the sharing contract agreement.
But section 17 of the Act which stipulated various degrees of punishment for defaulters , was amended to pave way for stiffer measures .
For example while N15million or one year imprisonment was provided for in the Act as punishment for any defaulting oil company, the new bill recommends N500million or five years imprisonment for such.
Other highlights of the amendments and review of the Deep Offshore and Inland Basin Production Sharing Contract Act Cap 03 LFN 2004 undertaken by the Joint Committee headed by Senator Albert Bassey Akpan (PDP Akwa Ibom North East) include (a), Amendment of the provisions for payment of royalty which requires that all licences and leases holders in the deep offshore shall payment stipulated royalties irrespective of the water depth or terrain of their operation;
(b)Adoption of a regime of royalty by price to ensure that royalty payable is reflexive in accordance with the changes in the price of crude oil, condensates and natural gas;
(c) Inclusion of clause mandatory periodic review of the PSCs, and (d) Inclusion of an offences and penalty clause to deter persons from flouting the provisions of the Act.
Another significant recommendation contained in the report and adopted by the Senate , is that every PSC company operating in our deep offshore shall pay appropriate royalty to government irrespective of the terrain or water depth in which they operate.
This the Senate explained , will mark the end of zero royalty in our deep offshore and will greatly improve government revenues .