President Muhammadu Buhari has assented to the Bill amending the Deep Offshore (and Inland Basin Production Sharing Contract) Act.
This was disclosed in a series of tweets on the President’s verified Twitter handle. According to the President, this is a landmark achievement as all attempts to amend the law on the distribution of income have failed.
The President’s tweets read:
“This afternoon I assented to the Bill amending the Deep Offshore (and Inland Basin Production Sharing Contract) Act. This is a landmark moment for Nigeria; let me use this opportunity to thank the National Assembly for the cooperation that produced this long-overdue amendment.
“You will recall that in my 2020 Budget Presentation Speech before the National Assembly in October, I highlighted the need to urgently review the fiscal terms for deep offshore oil fields, to reflect current realities and to ensure increased government revenues.
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“Now, a month later, we have together with the 9th National Assembly made history with the passage and the signing of the amended Bill into law. We will continue to work together to deliver on all our promises to ensure inclusive growth and enhance the welfare of all Nigerians.
“Nigeria will now receive its fair, rightful and equitable share of income from our own natural resources for the first time since 2003.
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“All attempts to amend the law on the distribution of income have failed. Until today. A combination of complicity by Nigerian politicians and feet-dragging by oil companies has, for more than a quarter-century, conspired to keep oil taxes to the barest minimum.
“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.”
The Deep Offshore Act: The Bill, signed into law by the President, amends legislation on agreements related to offshore oil production. Essentially, the bill changes the 1993 Deep Offshore and Inland Basin Production Sharing Contract to add two new revenue streams.
One is a flat 10% royalty on all projects over 200 meters deep and the other is a 7.5% royalty on frontier and inland basins. Essentially, the two measures are designed to add about $1.5 billion to government coffers in just two years but an oil industry group.
Although the offshore oil projects have helped to boost oil output in the last few years from Nigeria, they are among the most challenging for companies to develop.
Earlier in October, the Nigerian Senate passed the Deep Offshore and Inland Basin Production Sharing Contract (Amendment) Bill 2019. Senate President Ahmad Lawan said:
“The bill must be passed and concurred to, by the House of Representatives and of course, assented to by President Muhammadu Buhari who is on the same page with us on it.
“As a patriotic Senate, there is no way we would have yielded to such pressures and deny our dear country $1.5billion that will be accruing into her account on yearly basis based on contractual sharing agreements put in place by the new provisions which become laws when finally assented to by the president.”