FG Demands $62bn PSC Arrears from Oil Majors
October 10, 2019

OPEC grants Nigeria higher production quota

Alike Ejiofor with agency report

The federal government has begun moves to recover as much as $62 billion from international oil companies, being backlog of its share of income from Production Sharing Contract (PSC).



It is basing its action on a 2018 Supreme Court judgment that would enable the country to increase its share of income from PSC.
The government accused the energy companies of failing to comply with a 1993 contract-law requirement that the state receives a greater share of revenue when the oil price exceeds $20 per barrel, according to a document prepared by the attorney-general’s office and the Justice Ministry.

The document, seen by Bloomberg, was verified by the ministry, the agency reported wednesday.
Another report wednesday by Reuters also said the Organisation of Petroleum Exporting Countries (OPEC) has granted Nigeria a higher oil output target under an OPEC-led deal to limit oil supply in a move unannounced by the group, following efforts by Africa’s largest exporter to tweak the agreement to accommodate its expanding oil industry.

Under the PSC law, companies including Royal Dutch Shell Plc, ExxonMobil Corp., Chevron Corp., Total SA and Eni SpA agreed to fund the exploration and production of deep-offshore oil fields on the basis that they would share profit with the government after recovering their costs.

Bloomberg reported that when the law came into effect 26 years ago, crude was selling for $9.50 per barrel.
The oil companies currently take 80 per cent of the profit from these deep-offshore fields, while the government receives 20 per cent, according to the document.

Representatives of the oil companies were said to have met with the Attorney General of the Federation and Minister of Justice, Abubakar Malami, on October 3.

Malami told them that while no hostility is intended toward investors, the government will ensure all the country’s laws are respected.

However, the oil companies including Shell have gone to the Federal High Court to challenge the government’s claim that they owe the state any money, arguing that the Supreme Court ruling doesn’t allow the government to collect arrears.

“We do not agree with the legal basis for the claim that we owe outstanding revenues,” Shell’s Nigerian unit said in an emailed response to questions.

Chevron spokesman, Ray Fohr, told Bloomberg that the company doesn’t comment on matters before the court.
Meanwhile, OPEC has raised Nigeria’s oil production quota target under a deal to limit oil supply in a move unannounced by the group.

A report yesterday by Reuters quoted sources it identified as OPEC delegates as saying that the country’s allocation was increased to 1.774 million barrels per day (bpd) from 1.685 million bpd at the last OPEC meeting in July.

However, the newly approved quota fell short of the 2.3 million bpd projection on which oil revenue for the 2019 budget was anchored and also below the 2.18 million bpd that the revenue to fund the 2020 budget, which President Muhammadu Buhari presented to the National Assembly on Tuesday was based.

The quota increase will mean Nigeria will see an improvement in its compliance with the supply cut accord, but it is still pumping more crude than the new target according to OPEC’s own figures and industry surveys.

“It’s happened,” one of the delegates said. “I’ve not heard of any other changes to the agreement.”

Nigeria has had a dismal record in delivering its share of the cut, overshooting by 400 per cent in August according to the International Energy Agency. OPEC put Nigerian production at 1.866 million bpd in August – far above the new quota.

One of the OPEC delegates said OPEC granted Nigeria the target revision because of the new Total-operated Egina oilfield, which started production in January and had not been factored in when the initial quota was calculated.
Some of the Egina production will also classify as condensates, meaning even more of Nigeria’s output would not count towards the new cap.

While OPEC has not formally announced the change, Minister of State for Petroleum Resources, Mr. Timipre Sylva, mentioned the new target in a Bloomberg interview last week.

He did not elaborate on circumstances leading to the new target.

The 14-nation OPEC agreed in December with non-OPEC partners, including Russia to curb crude production by 1.2 million bpd from the start of this year.

OPEC’s share of the cut is 800,000 bpd, with Venezuela, Iran and Libya exempt.

It is not clear whether this figure, or any other countries’ targets, have been adjusted to accommodate Nigeria’s increased quota.
Nigeria only started participating in the deal in January, having been granted an exemption in previous OPEC+ cuts due to militant attacks that reduced its output.

https://www.thisdaylive.com/index.php/2019/10/10/fg-demands-62bn-psc-arrears-from-oil-majors/

FG why nah... Always seeking attention, yet nothing to show for it. Another Audio move from FG

At least that can fund our budget

GOOD

money upon money. under development

Good. More Money for Naija

One day this oil will dry up like the northern dry port..then we will diversify our already epileptic economy

$62 billion. Who maths epp?

Who is sure anyone in PMB presidency knows how much crude oil the IOCs take away from Nigeria daily?

Guess why a person like PMB stands as president of Nigeria.

When dey lack ideas,dey start looking for any means cs those companies will not pay,go back to non oil revenue ventures and gain billions no cs dey are not looking at long term but short term wen dey world finally leaves oil I wonder wat Nigeria will do

Wetin this P&ID go cause ehn

Now I think the government is waking from it slumber....if we r able to collect all these monies,there won't be any need to increase VAT at all

Buhari is the best thing to happen to Nigeria.
Very good and applaudable move by the FG
God bless Buhari

This is a welcomed development, kudos!!!

Looking for extra income online? Check here

[s]

Cherrybae:
Buhari is the best thing to happen to Nigeria.
Very good and applaudable move by the FG
God bless Buhari

[/s]
amaechi is a criminal
kiss the truth

The Buhari govt desperately looking for where to fund its budget from !!! Which bring to mind the vital question what has the Buhari govt been doing with all the loans , revenues the it claims that have increased and all the saving from blocking of Corruption loop holes ?

There is a leaking basket somewhere in this govts account and it will take the next good govt to reveal it

EzekaUdenee:
[s][/s]
amaechi is a criminal
kiss the truth

Hahahaha

[s]

Cherrybae:


Hahahaha

[/s]
shatap

EzekaUdenee:
[s][/s]
shatap

See how you are laughing at yourself insulting your mother

Cherrybae:


See how you are laughing at yourself insulting your mother

ikpu nne yi there

Cherrybae:
Buhari is the best thing to happen to Nigeria.
Very good and applaudable move by the FG
God bless Buhari

You are not smart enough to know anything so shift

Cherrybae:


See how you are laughing at yourself insulting my harlot mother

fixed

EzekaUdenee:
ikpu nne yi there

Amy nna gi

[s]

Cherrybae:


Amy nna gi

[/s]
nkita lachaa nne yi anya there

EzekaUdenee:
[s][/s]
nkita lachaa nne yi anya there

Amadioha gbakwa nne gi na nna gi dere

Nice idea but my wahala is that most of the revenue generated or got will be spent in the North.

Then when they want to start taxing, they will put the burden of tax on the South.

When will the South wakeup from its slumber?

Good...make dem pay in case PI&D go wan collect their bill.

Cherrybae:


Amadioha gbakwa nne gi na nna gi dere

afo sagbuo nne yi