Senate Considers Amendment Of PSC Act

Consequently, the bill has been referred to the Senate Committees on Petroleum (Upstream) and Finance for further legislative work.

Sponsor of the bill, Senator Albert Bassey Akpan (PDP), representing Akwa-Ibom North East, said it seeks to amend section 5 of the PSC Act to bring it in line with the general provisions of the Act and into congruence with the intendment and essence of Production Sharing Contracts.

According to the lawmaker, “The PSC arrangement was offered by the Federal Government of Nigeria as a contractual arrangement for the exploration and production of petroleum in the 1991 licensing round.”

He said the fiscal incentives from the arrangement are distinct and absent from the provisions of the Petroleum Act and the Petroleum Profit Tax Act which regulates the fiscal regime of other types of petroleum exploration and production arrangements.

The Akwa Ibom Senator further said; “the Act provided in section 16 that where the price of crude oil exceeds US$20 per barrel, the PSC Act will be reviewed to ensure that the share of the Federal Government of Nigeria (FGN) in the additional revenue is adjusted to the extent that the PSCs shall be economically beneficial to the FGN and that in any event, the PSC Act shall be liable to be reviewed after 15 years from its commencement in 1993 and every 5 years thereafter.

“This amendment alters the royalty payable by the PSC contractors so that whenever oil and gas price increases the share of government increases with the automatic inception of the newly introduced royalty by price mechanism.”

In another development, the Senate has charged the Federal Government to fully focus on developing the Oloibiri Oil and Gas Research Centre and Museum in Bayelsa State.

The Red chamber’s call came through resolutions reached after consideration of a motion on “The need to ensure immediate commencement of the Oil and Gas Research Centre and Museum, Oloibiri, Bayelsa State – Nigeria’s first oil field”.

Sponsor of the motion, Senator Biobarakuma Degi-Eremienyo, who represents Bayelsa East Senatorial district in the National Assembly, said the idea to build a world class museum of oil and gas was conceptualised, designed and foundation stone laid by President Shehu Shagari in 1983 given the importance of publicly exhibiting the nation’s first oil field.

He said the project was also based on the need to develop the foreign exchange earning and tourism potentials of the area,

According to him, though the federal government removed the project from the National Commission for Museum (NCM) as initially conceived and domiciled it with the Petroleum Technology Development Fund (PTDF) in 2011, it has largely remained moribund.

The Senate, therefore, urged government to intervene by directing PTDF and the contractors to mobilise to site and immediately commence the construction of the abandoned Oil and Gas research Centre and Museum.

Similarly, the upper legislative chamber also directed relevant Senate committees to undertake intensive oversight towards successful implementation of the project.