Why $60 billion claim against IOCs is hard to sell- NNPC

The Nigerian National Petroleum Corporation (NNPC) has disclosed that the claim that international oil companies operating in Nigeria owe the Federal  Government the sum of $60 billion is hard to succeed.

The $60 billion claim, which is with respect to the Production Sharing Contracts, was said to have been lost to the delay in the review of the PSC law after the price of oil rose above the $20 stipulated by the law.

President Muhammadu Buhari had signed the bill that amended the Deep Offshore (and Inland Basin Production Sharing Contract) Act after its passage by the National Assembly.

Speaking on the development, the Chief Operating Officer, Upstream, NNPC, Roland Ewubare, said legal experts have stated that the claim can’t be recovered.

According to Ewubare, the legal experts said the NNPC and the Nigerian government had the right to ask for the payment but slept on the opportunity. In a report by Punch, the NNPC top executive said the corporation has on its part tried to recover the fund.

However, he revealed that the money wasn’t what was lost, but the opportunity to make the money, adding that making a legal claim would be difficult.

He said,

“The crux of those opinions is that we slept on our right – we had the right to ask and we didn’t ask and so it is gone.

“The second position was that what we really lost was not quantifiable dollars and cents or naira and kobo but an opportunity to make that money and that it is hard to make a legal claim that will succeed on the basis of an opportunity that was lost,”

Ewubare said.

He added that the steps taken by NNPC to savage the situation proved that recovering such amount isn’t as easy as expected, “Those steps resulted in a dispute which went to arbitration because the argument of the other party was that NNPC had gone ahead to try to correct the anomaly through self-help by taking more barrels of oil than it was entitled to.

At the arbitration, NNPC has won against Esso Exploration and Production Nigeria Limited and they are going on appeal. So, clawing back that money is not quite a straight-forward affair.”

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