Oil debt recovery: A panacea to economic viability

Nigeria’s political space has recently taken another dimension with a set of reformists and critics since President Muhammadu Buhari assented to the Deep Offshore and Inland Basin Production Sharing Contracts Act on November 4, 2019. By the new legislation, Nigeria is expected to get an estimated $62,19 billion as at December 2018, as unpaid arrears […]

Nigeria’s political space has recently taken another dimension with a set of reformists and critics since President Muhammadu Buhari assented to the Deep Offshore and Inland Basin Production Sharing Contracts Act on November 4, 2019. By the new legislation, Nigeria is expected to get an estimated $62,19 billion as at December 2018, as unpaid arrears from International oil companies.

The issue of recovering this huge amount of money to the FG  remains a focal point of concern to the reformists as to whether it can be recovered from the oil companies without the full weight of legal machinery being put in place.

Before the President assented to the bill, the Supreme Court of Nigeria had in 2018, based on the suit filed by Bayelsa, Rivers and Akwa Ibom states, ruled that the Federal Government has the right to renegotiate royalties in its production sharing contracts if oil prices rose to more than $20 per barrel.

Shortly, after the court verdict, international oil companies rejected it, implying that the decision requires a full legal back up against the oil companies to recover these unpaid arrears.

This has resulted in the trooping of legal entrepreneurs to lobby the FG to engage them as agents to recover the money, based on five per cent incentive agreement to be paid upon recovery of the money in question.

Trobell International Nig Ltd, based on proposal forwarded to the office of the Minister of Justice and Attorney General of the Federation, Abubakar Malami, SAN, won the contract following the approval of the minister on  April 12, 2018.

The five per cent recovery fee was recently greeted with outcry by the critics who compared the percentage that will be given to the company with the Lagos State budget and keeping a blind eye on the huge amount of money that Nigeria stands to get if the revenue in question is recovered.

Some are even of the opinion that the office of the Attorney-General awarded the contract based on personal gain. Isn’t this a bizarre accusation?  It was obviously made clear that the Attorney-General has no power to make payment and that it was the statutory mandate of the Federal Ministry of Finance, Budget and National Planning to approve the dues to the said company.

In view of the foregoing, the parameter for measurement and consideration should not be Lagos State budget but the 95 per cent revenue that Nigeria stands to benefit from the money, if recovered.

It is expected of every good citizen to exhibit high sense of patriotism above any personal gain and stop propelling any unnecessary disquisition among Nigerians.

Rabiu Musa is an Intern with the PRNigeria Centre, Kano and can be reached at: [email protected]