Nigeria fails to review oil contract despite $21bn loss

The Federal Government has remained docile over the need to review the Production Sharing Contract (PSC) signed about 25 years ago between the Nigerian National Petroleum Corporation (NNPC) and International Oil Companies (IOCs).

While losses of over $21 billion have already been recorded since threshold for review of the contract was reached in 2000, experts are expecting the losses to triple as the price of crude oil increases and more deepwater projects come on board.

With over $7.2 billion spending going into Nigeria’s ultra-deep offshore blocks between 2018 and 2020, according to statistics from Global Data, the IOCs will by implication smile home daily at the detriment of Nigerians, especially as the price of crude oil moves up and cost of oil production drops.

Had the Federal Government been proactive, the 1993 contract would have been reviewed since 2000, using the three opportunities that allowed for a re-negotiation of the contract.

The Guardian, June 8, 2018

 

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