Nairametrics| “Water here, water there, yet no water”. At this point, that popular saying could be applicable to the Nigerian situation. The economic crisis in the country has led to politicians emphasizing the need for the country and its citizens in particular to maximize the resources available to them. However, that advice seems to be applicable to the citizens, as more evidence has come up to show how government has failed to utilize resources available to it.
The latest example is the suit filed by the Rivers, Bayelsa and Akwa-Ibom states against the FG at the Supreme Court over the government’s failure to review the sharing formula, when the price of crude oil exceeded $20 per barrel from August 2003 as provided by law. According to the plaintiffs, this has resulted in the loss of at least N500 trillion Naira over a period of 15 years.
The suit, All Africa reports, is based on the Deep Offshore and Inland Basin Production Sharing Contracts Act (DOA) stipulated in Section 16(1) which stipulated that “any time the price of crude oil exceeds US$20/bbl, the share of the defendant (FG) shall be adjusted upwards under the Production Sharing Contracts to favour the Defendant.”
However, the plaintiffs argue that since 1999, when crude oil prices have exceeded $20 per barrel, the FG has ignored Section 16(1) leaving its share in the contracts as it was. “At the least price of US100/bbl, there was earnings of US$210,000,000 per day which translates US$76,650,000,000 (Seventy-six billion, six hundred and fifty million US dollars) per annum. Using the total earning per annum as a multiplicand by 15 years from 1999-2015, a total sale earning of US$1,149,750,000,000 (One trillion, one hundred and forty-nine billion, seven hundred and fifty million US dollars) was earned between the defendant and its Production Sharing Partners in the Production Sharing Contracts for the period.” They claim.
The contracts under contention are those between the FG and Nigeria Agip Energy (NAE), Shell Nigeria Exploration and Production Company Limited (SNEPCO), Exxon-Mobil and Statoil. If these claims are true, then it means that all of Nigeria’s present deficit, including that of the 2017 budget could have been settled by enacting the law as stipulated. What will continue to baffle many is why was it not activated? Rather than look for ways of stopping obvious leakages, FG seems more intent on taxing Nigerians. Hence, there is little where there is so much.