Monday , December 11 2023
Home / News / Repeal Offshore And Inland Sharing Contracts Act Now – Falana Tells N’ Assembly

Repeal Offshore And Inland Sharing Contracts Act Now – Falana Tells N’ Assembly

FALANAMr. Femi Falana (SAN), a Lagos human rights lawyer, has asked the National Assembly to repeal the Deep Offshore and Inland Sharing Contracts Act ‎which gave certain fiscal incentives for the oil and gas companies operating in the Deep Offshore and Inland Basin.

Section 5 of the Act provides that the payment of royalty in respect of the Deep Offshore production sharing contracts between the Nigerian National Petroleum Corporation (NNPC) and beneficiary oil companies shall range from four to 12 percent while no royalty shall be paid whatsoever in areas in excess of 1,000 metres depth.
The Abdulsalami Abubakar-led military government was said to have enacted ‎the decree to give effect to production sharing contracts between the NNPC and other companies holding oil prospective licences or mining licences and various petroleum exploration and production companies.

Falana said in a statement on Sunday that since a large quantity of oil produced by Nigeria was located beyond the 1,000 metres depth, the incentives given to the oil companies had led to loss of several billions of dollars.
‎According to him, by virtue of the law, the 15-year period non-payment of royalty had expired in 2014 and therefore the existence of the “obnoxious law” could no longer be justified.
Falana stated, “Since a large quantity of the oil produced by Nigeria is located beyond 1,000 metres depth, the muti-national oil companies have taken advantage of the Act to avoid the payment of royalties to the Federation Account.
“The fiscal incentives given to the oil companies have led to the loss of several billion of dollars by the Federal Government.

“As the existence of the obnoxious law can no longer be justified the National Assembly ought to repeal or amend it by taking advantage of section 16 thereof which provides for a review ‘after a period of fifteen years from the commencement and every five years thereafter.’

“In view of the fact that the 15-year period of non-payment of royalty expired last year the National Assembly should amend section 5 of the Act by deleting the section which provides for zero percent royalty ‘in areas of 1,000 metres’.”
‎The human right lawyer threatened to sue the National Assembly should it fail to carry out its constitutional duty by not repealing the law.

By Patrick Aigbokhan

Check Also

Lagos holds 2023 Greater Lagos Fiesta at Sol Beach Oniru

    The Lagos State Commissioner for Tourism, Mrs Toke Benson-Awoyinka, says the grand finale …

Kebbi’s first private university begins academic activities Jan – VC

  Prof. Mohammed Ahmadu, the Vice Chancellor of Rayhaan University, in Kebbi, says academic activities …