How Nigeria Lost $21 Billion In Oil Sharing In 20 Years – Kachikwu

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The Minister of State for Petroleum Resources, Dr Ibe Kachikwu has revealed how a defect in regulations lost Nigeria $21 billion in oil production sharing contact (PSC) revenue.

Addressing journalists after a Federal Executive Meeting headed by Vice President Yemi Osinbajo yesterday, Kachikwu said previous administrations failed to explore a provision of the Deep Offshore Act which prescribes that premium elements be shared once the price of oil exceeds $20 per barrel.

The Minister said that this failure has made the nation lose $21 billion dollars since 1993.

He said, “The first and most substantial for me is the decision to work with the Attorney-General to amend Section 15 of the PSC of the Deep Offshore Act.

“Under the Deep Offshore Act, there was a provision in 1993 that once the price of crude exceeds $20 a barrel, the government will take steps to ensure that that premium element is then distributed at an agreed premium level for the Federal Government so that we get more for our oil.

“But over the last 20 years, nothing really was done. From 1993 to now, cumulatively, we have lost a total of $21 billion just because government did not act. We did not exercise it.

“In 2013 there was a notice to oil companies that we were going to do this but we didn’t follow through in terms of going to council to get approval.

“One of the things we’ve worked on very hard over the last one year is to get that amendment because once we do, the net effect for us is close to $2 billion extra revenue for the federation.

“Let me just say that however we do it, we would definitely try to see whether a possibility exists for claw back some advantages. Let me just keep it at that.”

Kachikwu equally revealed that there was no plan by the Federal Government to increase price of fuel as being insinuated in some quarters.


John is a University of Lagos-trained, tech-savvy journalist with an uncanny nose for news. His views are always the end products of a deliberate search for information and knowledge. He has read almost every novel written by Chinua Achebe, Jeffrey Archer and Dan Brown. He is an expert Scrabble and draughts player who is also excellent at swimming. If you know the capitals of 45 African countries by heart, then you are exactly like him.

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