The Senate had, on Tuesday, considered and passed the bill in the committee of the whole after it received the report from the joint committees on Petroleum Upstream, Gas, Finance and judiciary which met with stakeholders on the best option to regulate the sector at Monday public hearing in Abuja.
The Senate noted that the extant law to be amended left Nigeria drawing only 0.21 per cent royalty from the 275.25 million barrel of crude produced per year.
The law was enacted in 1993 with an obligation on all parties to review the contract in 15 years and subsequently make a review every five years.
The Bill passed by the Senate prescribes about 12 per cent aggregate royalty to the federal government comprising of 10 per cent royalty for an increase of on $20 to $60 and a statutory 2.5 per cent share on production.
The President of the Senate, Senator Ahmed Lawan congratulated the senate for the passage of the bill stating that: “We have done what could not be done between 2003 till date. Today marks milestone in the history of the Senate particularly, this senate and indeed the National assembly that we can do whatever it s for our people and for our country by passing this bill Nigeria will gain $1.5 in 2020 as a result of passing this amendment.”
The bill was passed with an amendment on clause 17 which earlier prescribed 10 years periodic review of the law to meet the industry reality but the senate adopted 8 years following the counsel of the Senate leader Abdullahi Yahaya who argued that senators should consider the implication of the review period for five years in s sensitive sector.
According to him: “Just imagine that you are an investor and it will take you five years to reach an investment decision and when you were about to invest and the rules of the game completely changed.
“Will you invest?
“And if it takes them up to thirty years to reach a decision and then we change the rule of the game just when they are about to reach a decision, imagine the impact of that on the progress of our own industry?”
Also amended was clause 18 which stipulated the penalty of N50 million or an option of five years imprisonment which the Deputy President of the Senate, Ovie Omo-Agege protested and proposed a heavier fine.
“In any event, Mr President, the N50 million fine is too small for a period of not less than one year or both what is that?
The motion was seconded by Senator Mpigi Barinada, Rivers South East (PDP) and adopted by the senate.