President of the Senate, Ahmad Lawan said on Wednesday that the Production Sharing Contract Act of 1993 will be reviewed.
Lawan spoke while declaring open a public hearing convened by Senate and House of Representatives Joint Committees on Finance on 2020-2022 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
Lawan said the Senate has earlier in the day decided on the need to review the Act to boost revenue for the government.
“For long, Nigeria has been shortchanged and of course, we blame ourselves for that.
“Since the price of crude went beyond 20 dollar, Nigerians should have benefitted from that Act by immediately ensuring that we review that Act, where we would have gotten 50 percent of the increase in the price of crude; and we are talking about billions of dollars,” Lawan said.
The Senate President said it was an opportunity that “we squandered ourselves. The oil companies would have no business telling us to review our laws.”
Lawan said the Senate will on Thursday take the first reading of the bill to amend the Act and promised that the bill will be accorded expeditious consideration.
“We know that the executive will be on our side. We lost about N350 billion to fund the 2019 budget, because it is not there. And even the N160 billion proposed in the 2020 budget is at risk. So we have to do everything possible to ensure that what is ours as a country comes to us.
“And we are inviting the executive side of government to work with us on this very important Act that we are about to amend.
“We expect that before the budget is passed, this Act would have been amended and signed into law by the President… because we have to fund the 2020 budget properly,” Lawan said.
Earlier, the Senate had reached a resolution on the planned amendment after consideration of a motion titled: “Urgent need to review and recover additional revenue accruable to the government of the Federation from the Production Sharing Contracts pursuant to Section 16 of the Deep Offshore and Inland Basin Production Sharing Contract Act.”
The motion was sponsored by Senator Ifeanyi Patrick Ubah (YPP, Anambra South).
The Senate also on Wednesday mandated its Committee on Petroleum Resources Upstream to investigate the reasons for the failure to review the provisions of the Production Sharing Contract (PSA).
Presenting the motion, Senator Ubah disclosed that “as a result of the non-review and amendment of the PSC Act, the Federal Government has lost about US$21 billion (about 7 trillion naira) over a period of 20 years.”
Ubah added, “Nigeria having lost trillions of naira due to non-review of the PSA Act stand to gain an additional sum above 30 billion naira monthly (360 billion naira annually) if the Act is reviewed and amended.”