Constitutional lawyer and Senior Advocate of Nigeria (SAN), Mr. Femi Falana has said that fiscal incentives given to Oil Companies operating in Nigeria in the Deep Offshore and Inland Basin Production Sharing Contract Act of 1999 have cost the Federal government $7 billion.
Falana in a statement on Sunday called on the National Assembly to review the act promptly.
Falana said “Since a large quantity of the oil produced by Nigeria is located beyond 1, 000 metres depth, the multinational 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.”
He added that Section 16 provides for a review “after a period of 15 years from the commencement and every five years thereafter.”
He said “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 per cent royalty in areas of 1,000 metres.”
“If the National Assembly fails to discharge its constitutional duty in the circumstance we shall not hesitate to file an application for mandamus at the Federal High Court with a view to ensuring compliance with the law forthwith.”
He threatened to go to court if the national assembly refuse to discharge its constitutional duty.
Falana explained that Abdulsalami Abubakar military regime enacted the PSC Act Decree in order to give effect to certain fiscal incentives for the oil and gas companies operating in the Deep Offshore and Inland Basin under PSCs between the Nigerian National Petroleum Corporation (NNPC) and other companies holding oil prospective licenses or mining licenses and various petroleum exploration and production companies.