Malami charges IOCs to settle $62bn debt to FG

ATTORNEY-General of the Federation and Minister of Justice, Abubakar Malami, challenged International Oil Companies (IOCs) to settle their unpaid arrears of approximately $62.19 billion to the Federal Government of Nigeria.

This is contained in a statement issued by Dr Umar Jibrilu Gwandu, the Special Assistant on Media and Public Relations Office of the Attorney General of the Federation and Minister of Justice, Abubakar Malami, SAN and made available to newsmen in Abuja on Tuesday 26th November 2019.

The Minister noted that since the signing of Deep Offshore and Inland Basin Production Sharing Contracts Act CAP D3 Law of the Federation of Nigeria 2004 (as amended) 2019 for oil exploration in deep offshore and inland basis, the Federal Government was to get more shares of the oil revenue which the international companies did not pay, the arrears of which was estimated as at 2018 at sixty- two billion one hundred ninety million, six hundred and seventy-nine thousand seven hundred and nine three dollars.

Speaking on the media reports on development, the Minister said the matter was not about percentage to be given to the recovery agency, but of patriotic desire to get back to the country the revenue it deserves noting that the 5% was a reduction from what it used to be during the past administration.

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The Minister noted that the 5% propose success contingent fees was an unprecedented reduction from what it used to be.

“The 5% as a recovery fee is a product of innovation introduced by the Federal Government upon the assumption of office of the President Muhammadu Buhari as against 30% and above which was the traditional fee by the previous administration.”

According to Malami: “The comparative basis is not the Lagos budget as the considerable parameter, but the amount due for the recovery which in the circumstance is approximately $62, 190,679,793.00 as at December 2018.”

The Attorney-General of the Federation argued that “when you convert $62, 190,679, 793 billion dollars into naira it will give you an amount more than 20 trillion naira.

“By virtue of Section 162 of the Constitution of the Federal Republic of Nigeria 1999 as amended, the amount in question is more than enough for three year budget of the most populated African country; the Federal Republic of Nigeria considering the 2020 budget of 10.3 trillion naira,” Malami said that it was not about the composition and who the recovery agents are, but the funds belonging to the Nigerian masses must be recovered for the government to carry out more development projects for the benefits of the teaming populace who brought the government into power and whose interest the Federal government stands firms to protect.

“Above all, the volume of the fees payable to the recovery agents which in all cases is contingence upon recovery of has never been a subject of executive contention in this matter.”

“It does not accord with reason and logic for the Federal Government of Nigeria to overlook, forgo and condone the loss of $64bn on account of meagre five per cent fee payable upon recovery,” the Minister has said.

It may be recalled that three oil-producing states of Bayelsa, Rivers and Cross River filed an action in the Supreme Court on 27th April 2019 praying, among other things that Federal Government must “recover and pay immediately all outstanding statutory allocations due and payable to the plaintiffs.”

On 19th January, 2018, Trobell International (Nig) Ltd forwarded proposal to the Office of the Attorney-General of the Federation requesting to be engaged as an agent to recover diverted proceeds of the Governments of Nigeria due from the share of profit oil under the various Production Sharing Contracts made pursuant to sharing contract made pursuant to Section 16(1) of the Deep Offshore and Inland Basin Production Sharing Contracts Act CAP D3 Law of the Federation of Nigeria 2004.

Following the approval for Trobell International (Nig) Ltd to undertake the task on April 12th 2018, the company engaged the services of lawyers, engineers, financial experts and petroleum experts nominated by the three state governments.