The Nigeria Extractive Industries Transparency Initiative, NEITI, says it has commenced a study into the Production Sharing Contracts, PSC, in the petroleum industry to evaluate the agreements between the government and oil companies since 1993.
The Acting Executive Secretary of NEITI, Mr. Waziri Adio, disclosed this at the launch of the NEITI Data Dashboard in Abuja, Nigeria’s capital.
According to him, the agency would be undertaking a thorough analysis of the data so far released by the NNPC between January 2015 and December 2017, to enable Nigerians relate effectively with the data.
“There are two trigger clauses in Section 16 of the PSC law: One is that whenever the price of crude oil crosses $20 per barrel in real time, that is adjusted for inflation, the contract should be reviewed in a way that is more financially rewarding for the country. The second thing is that whether it passes $20 or not, by the time it reaches 15 years and five years subsequently, it has to be reviewed in a way that it would be more beneficial for the country.
The background to this was that by the time the 1993 PSCs was put in place, which is for offshore exploration and exploitation, the technology at that time was very expensive, very uncertain and we needed oil companies to invest so that we could get our resources and revenues. Because of that, we needed to give a lot of incentives to them,” he said.
According to Adio, the study is aimed at putting a cut to it.
“What we have done is that we fail to act. This is not money that they owe us. What we are doing is not to say the companies owe us certain amount. We are doing a study to say if some of the parameters had changed, this is what the country would have gained,” the NEITI Acting Executive Secretary explained.