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How Nigeria lost N7.6 trillion to faulty deals with IOCs - Kachikwu

How Nigeria lost N7.6 trillion to faulty deals with IOCs - Kachikwu

- Minister of state for petroleum resources Ibe Kachikwu disclosed how Nigeria lost N7.6 trillion to International Oil Companies (IOCs) operating in the country

- Kachikwu said the non-implementation of the Production Sharing Contract (PSC) Act of 1993 is the major cause of the loss

- He, however, said an approval of the amendment to section 15 of the PSC law is a way forward

Minister of state for petroleum resources Ibe Kachikwu on Wednesday, December 13, said Nigeria lost about $21billion (N7.6 trillion) to International Oil Companies operating in the country because of the non-implementation of the Production Sharing Contract Act of 1993.

Vanguard reports that consequently, vice president Yemi Osinbajo approved an amendment to Section 15 of the PSC law at the Federal Executive Council (FEC) weekly meeting.

Kachikwu said: ''Once the price of crude oil exceeds $20 per barrel, the government will take steps to ensure that the premium element is then distributed at an agreed level for the nation to get more from her oil.

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''But over the last 20 years, nothing really was done. From 1993 till now cumulatively, we have lost $21 billion because government did not act, we did not exercise it. In 2013, there was a notice to oil companies that we were going to do this but we didn’t go through in terms of going to council to get approval.

''One of the things we have done in the last one year is to work very hard to get that amendment because once we do, the net effect for us is close to $2 billion extra revenue for the federation.''

On how government plans to tackle the problem or recover the monies, Kachikwu said: ''I doubt it for the simple reason that the provision of the Joint Operating Agreement (JOA) on Section 15 is that government will need to do something, which is what we have just done today.”

The FEC also approved the award of contract of over $2.7 billion to three consortium that will finish up the AKK (Abuja, Kaduna, Kano) gas pipeline to ease movement of gas from the southern corridor to the north for power generation.

According to him, ''We presently have trapped power, trapped gas all in the southern corridors that is going nowhere because of lack infrastructure. That has now been awarded.

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''FEC also awarded a contract to a consortium for the Odidi pipeline from the Warri and the Southern marshlands which will move the additional gas we have been able to produce through the NDDC, about 364 million cubic meters of gas, to be feed into the AKK pipeline.”

''The refineries can be fixed, we came up with a model to find private sector funding into these refineries and that is being done.

''We expect that before the end of this year, we will at least get to the final contracting stage in terms of announcing those who are going to take this up. It takes about six months to do this and do it thoroughly but that requires raising close to $2billion from the private sector participants to get this done.''

Meanwhile, Legit.ng had reported that Kachikwu said the major cause of the fuel scarcity currently being witnessed across the country is shortfall in supply of petroleum products.

The minister, who stated this in a news briefing on Thursday, December 7, in Abuja, however, said that the Nigerian National Petroleum Corporation (NNPC) was making efforts to ensure that queues at filling stations disappeared in a couple of days.

Fuel scarcity: This is getting too much for us - Nigerians lament on Legit.ng TV:

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Source: Legit.ng

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