The House of Reps has passed the Deep Offshore and Inland basin sharing contracts bill.
The new amendment which is a concurrency of the bill passed by the Reps according to report will ensure that Nigeria earns about $1.6billion annually from offshore oil drilling.
The Executive bill was given expedient passage by the bill, circumventing the normal process. The bill was passed through second reading by the committee of the whole and third reading on Tuesday, October 29.
The passage means that oil companies exploring at the depth of 201-500meters offshore will pay 12% of its revenue to the federal government if the price of oil is above $20 per barrel.
The act was amended to include a fine of N50million or 5years imprisonment for anyone who breaches the law and Nigeria National Petroleum Corporation (NNPC) to review the contracts every five years.
Speaking during the debate on the general principle of the bill, House of Reps member; Isiaka Ibrahim called for caution in passing the bill.
He also argued that adjustment in financial obligations on oil companies will lead to disincentive.
He said: “I am very reluctant to oppose this bill because it is far expensive to explore offshore today. This is unlike before where it was only Nigeria that has oil in abundance; we have other countries we are competing with.
“I don’t know if we are taking into consideration if these companies will not leave Nigeria before measuring the longterm effect of the review.”
Also speaking about the bill; Toby Okechukwu condemned the reactive approach by the present administration, instead called for passage of the Petroleum Industry Act.
“We are under pressure to source for revenue. This government should be responsive to support the Petroleum Industry Bill because all these pockets of acts dealing with one issue or another will not help.”
The Reps, therefore, adjourned till 5th of November after the passage of the bill.