The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, on Tuesday said the country had lost a lot of money to Production Sharing Contracts entered into with oil companies in the past.
Kachikwu said the conditions of the agreement would change to help the Federal Government to get more from oil production in the country.
The minister, who stated this in Lagos during a visit to the Egina Floating Production, Storage and Offloading vessel at the LADOL Free Zone, applauded Total Upstream Nigeria Limited for going on with the project despite the slump in global oil prices.
“For companies that invested and took the risk, like Total did, and continued investing during that period, this is the time to hopefully reap from that,” he stated.
Kachikwu noted that the country would begin to look at its priorities differently, adding, “We are going to begin to look at what is the net value for the country in this huge project. We are not as a country very impressed with a lot of the PSCs that we have put together. We lose a lot of money in the process.
“We would like to see a lot of movement in those areas and in an era where we are going to be quite frankly rationing production. And as we begin to ration those numbers, we are going to begin to place emphasis on where we make more money.”
He told the oil majors present at the event that “as you look at your numbers and the terms under which you want to develop these fields, please spend a good amount of time checking the bottom line and what goes into the Federation Account.”
He said looking at one field, he felt very pained that no single royalty was paid for one reason or the other.
The minister stated, “Those kinds of things will not happen anymore. So the terms will change; the basis upon which we proceed will change. But Nigeria will continue to be a prolific economic return model for any country in the world in terms of oil production.