President Muhammadu Buhari has signed the amended Deep Offshore Act.
Garba Shehu, the spokesman to the president, disclosed this in a statement on Monday.
Okay.ng recalls that the National Assembly had on Tuesday, October 29, passed the amended Offshore and Inland Basin Production Sharing Contract Act 2014.
The lawmakers amended Section 5 of the principal Act, which now reads in quotes: “(1) Royalties shall be calculated on a field basis. The royalty shall be at a rate per centum of the chargeable volume of the crude oil and condensates produced from the relevant area in the relevant period as follows: In deep offshore greater than 200 metres water depth – 10 per cent; in frontier/inland basin – 7.5 per cent.
“(2) Royalty by price is adopted in order to allow for royalty reflexivity based on changing prices of crude oil, condensates and natural gas. This also replaces the necessity for Section 16 of the principal Act.
“(3) The royalty based on price shall be identical for the various water depths in deep offshore – beyond 200m water depth, including frontier acreages for crude oil and condensates.
“(4) The royalty rates shall be based on increase that exceeds $20 per barrel, and shall be determined separately for crude oil and condensates as follows: From $0 and up to $20 per barrel – 0 per cent; above $20 and up to $60 per barrel – 2.5 per cent; above $60 and up to $100 per barrel – four per cent; above $100 and up to $150 per barrel – eight per cent.”
Also, a new Section 17 reads in quotes: “The minister (of petroleum resources) shall cause the corporation (Nigerian National Petroleum Corporation) to call for a review of production sharing contracts every eight years.”
In the amendment, Section 18 also criminalised any abuse of the law and prescribed punishments.
“Any person who fails to comply with any obligation imposed by any provision of the bill commits an offence and is liable on conviction to a fine not below N500,000,000 or an imprisonment for a period not (more or less: not indicated) than five years or both,” the section reads.
Buhari after completion of the signing said:
“Today is an important day for all Nigerians – but particularly the young generation.
“Today I signed into law the amended Deep Offshore Act. Nigeria will now receive its fair, rightful and equitable share of income from our own natural resources for the first time since 2003.
“In that year oil prices began a steep increase to double – and at times – triple over the following decade.
“All this time Nigeria has failed to secure its equitable share of the proceeds of oil production, for all attempts to amend the law on the distribution of income have failed. That is, until today.
“Rapid reductions in the cost of exploration, extraction and maintenance of oil fields had occurred over these 25 years, at the same time as sales prices have risen.
“A combination of complicity by Nigerian politicians and feet-dragging by oil companies has, for more than a quarter-century, conspired to keep taxes to the barest minimum above $20 per barrel – even as now the price is some three times the value.
“Today this changes. For the first time under our amended law, 200 million Nigerians will start to receive a fair return on the surfeit of resources of our lands. Increased income will allow for new hospitals, schools, infrastructure and jobs.
“Today marks a new and beneficial relationship with our oil company partners: one that benefits all – starting with the Nigerian people.”President Muhammadu Buhari
The spokesman disclosed that the Chief of Staff to the President, Abba Kyari, was present during the signing of the act.