President Muhammadu Buhari on Monday signed the amended Deep Offshore Bill into law.
Senior Special Assistant on Media and Publicity, Malam Garba Shehu said in a statement that the President assented to the bill in London.
Buhari said with the Act, Nigerians would get equitable income from natural resources.
The statement reads: “Today (Monday) is an important day for all Nigerians – but particularly the young generation.
“I signed into law the amended Deep Offshore Act. Nigeria will now receive its fair, rightful and equitable share of income from our 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 (Monday).”
Buhari said rapid reductions in the cost of exploration, extraction and maintenance of oil fields had occurred over the past 25 years, just as sales prices have risen within the period.
The President added: “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.”
Chief of Staff to the President, Malam Abba Kyari, was with him when he signed the Act.
The deepwater or deep offshore fields are currently produced under the production sharing contract (PSC) arrangement and are operated by international oil companies (IOCs).
Members of Oil Producer Trade Section (OPTS), a private industry group under the umbrella of the Lagos Chamber of Commerce and Industry (LCCI), in a position paper, stated that the amended Deep Offshore Act will only increase the Federal Government’s revenue in the short term.
They said it will diminish economic viability of deepwater projects, which would stall deepwater investments in Nigeria and negatively impact production, government’s revenue, local jobs and the broader economy.
According to the group, the Act does not reflect business realities; therefore, increasing the royalty without addressing the full fiscal package is not consistent with the Federal Government’s objectives of sustainable long term growth.
“The amended Deep Offshore Act, with a price-based royalty on revenues above $35 per barrel, in addition to existing water depth based royalties, is a burden on the industry.
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