Skip to main content

Deep Offshore and Inland Basin Production Sharing Contract Law: One of Senator Dr Patrick Ifeanyi Ubah's midas touch @ the 9th Senate.

 



By Chigozie Igbo Jr


The name Senator Dr Patrick Ifeanyi Ubah, needs no introduction both in business and political circles in Nigeria. Over the years, he has continued to impact positively on the lives of the people in his community, state and by extension Nigeria. His journey to the 9th Senate has been awesome, going by his many achievements. Today, one can't talk about the 9th Senate without the mention of Senator Dr Patrick Ifeanyi Ubah, the Prince of the Senate. One of the most outstanding senators  who was able to sponsor bills that is today impacting on the lives of Nigerians positively.


Today, I will be looking at the Deep Offshore and Inland Basin Production sharing contract law, which is one of the most prominent bills the senator has co sponsored. I will be stating it's benefits and possible implications to the overall development of Nigeria, which many do not know about and how Nigerians have benefited from it therein. In this piece I will throw more light on the impact of this law, on the lives of Nigerians, and the futuristic benefits attached.



The Deep Offshore and Inland Basin Production Sharing Contract Act, which is today law, courtesy of Senator Dr Patrick Ifeanyi Ubah, was  enacted as a decree in 1993 as (DOIBPSCA Act) which provides the legislative framework guiding Nigeria's deep offshore oil production, covering acreages greater than 200 meters in water depth. It embodies a gradation of fiscal incentives with a zero royalty and fifty percent (50%) flat rate of chargeable profit from oil exploration and production companies (Contractors) involved in exploration beyond 1000 meters water depth.


As an oil mogul who has played major roles in the upstream and downstream sectors of the Nigerian oil sector, Senator Ubah based on hindsight, brought the motion and co sponsored the Bill on the Deep Offshore and Inland Basin Production Sharing Contract 2004 (Amendment) Bill 2019, which has now been signed into law, in collaboration with Senator Albert Bassey Akpan, who has now formally joined the Young Progressives Party,(YPP) representing Akwa Ibom Northeast and is the Gubernatorial candidate of the party in Akwa Ibom presently.  


Based on the need to bring in upstream investments in offshore acreages, which was considered extremely risky and novel at the time, the DOIBPSCA was enacted more than two decades ago to provide fiscal incentives for investment in deep waters. Nigeria's offshore deep waters proved prolific and profitable with the Bonga oil field being the first commercial deep water discovery (OML118), which has produced over 700 million barrels of oil since inception, followed by Agbami (OML 127 and 128), Erha (OML 133) , Akpo and Egina (OML 130), and Usan (OML 138) amongst others.


Seeing the benefits, the IOCs or commonly known as Major Intergrated Oil Companies, as Shell, Chevron, ExxonMobil, Eni etc unlocked an increase in Nigeria's crude oil reserves to about 36 Billion barrels as at June 2019. Despite oil price rising slightly above $100 per barrel between 2010 and 2014, the FGN where not able to maximizie the opportunity to review the DOIBPSCA in order to rake in the additional revenues thus losing about $21 billion dollars (Twenty One Billion Dollars) of extra revenue due to non-review of the DOIBPSCA.


Senator Ubah as a major player in the industry having analyzed the scenario and the positive impact the lost revenue will play in the lives of Nigerians, took it upon himself to kickstart the revenue recovery process for Nigeria  by bringing the motion and co sponsoring  the bill, with Senator Albert Bassey Akpan. Today, the law has helped the federal government of Nigeria generate over 700 Billion naria in excess, which has helped in offsetting some of government's responsibility to Nigerians. The Law has also made it possible for the IOCs to pay what is due Nigeria, unlike what used to be the norm in the past.

 

 *Major takes of the laws* 


 “ *The provisions of this Act shall be subject to review to ensure that if the price of crude oil at any time exceeds $ 20 per barrel, in real terms, the share of the government of the Federation in the additional revenue shall be adjusted under the production sharing contracts to such extent that the production sharing contracts shall be economically beneficial to the government of the Federation.”* 


 *“Notwithstanding the provisions of subsection (1) of this section, the provisions of this Act shall be liable to review after a period of fifteen years from the date of commencement and every five years thereafter.”*


The implication of this, is that the provisions of the law is economically beneficial to the FGN whenever the price of crude oil in real terms exceeds $20 dollar per barrel, thus impacting on the fiscal terms of the Production Sharing Contracts (PSCs) negotiated between the Contractors and the FGN. Although the fiscal terms enshrined in the Act have long been due for review, since crude oil price soared above $20 for more than fifteen years, no progress towards review of the Bill has been made until recently, when Senator Ubah and his colleague came on board and ensured that the act got legislative backing which made the President to sign it into law. The first bill and only bill till date  signed into law outside the shores of Nigeria, by President Muhammad Buhari. This particular bill has further helped not just the federal government of Nigeria, but have also enabled local content and patronage.  The law in its futuristic sense will help develop infrasturctures and set the target for revenue generation acruable from crude oil in Nigeria.


I pity those, Senator Dr Patrick Ifeanyi Ubah will be contesting the forth coming senatorial election in Anambra South Senatorial District with, as most of them in their whole political life, have not been able to impact 1% of what the senator has done in his first 3 years at the senate. *Senator Ubah returning as a ranking member will be to the overall benefit of not just Anambra South Senatorial District, but to Anambra state and the South East by extension*. He has shown that he was not elected to play to the gallery, as all the steps he has taken thus far, has shown off the character he is made of. A serious and detertmined personality, whose interest is on how to better the lives of his people which he has done perfectly well. The coast gets clearer by the day, and Senator Ubah is assured of retunring to the Red Chamber, as his works in the last 3 years cant be wished away, as they litter all over Anambra senatorial district.


#InterventionsThatMatter 

#TheYoungProgressives

Popular posts from this blog

Tinubu Appoints Chioma Awuzie Substantive Rector, Fed Poly Oko

President Bola Ahmed Tinubu has approved the appointment of Dr. Chioma Irene Awuzie as the substantive Rector of Federal Polytechnic, Oko, Anambra State.  Dr. Awuzie's appointment, which takes effect immediately for a five-year term, follows the recommendation of the Polytechnic's Governing Council, chaired by Sen. Dr. Barnabas Gemade, after a transparent and competitive selection process where she emerged as the leading candidate. Prior to her appointment, Awuzie, who holds a Doctorate Degree in Physical and Materials Chemistry, was a distinguished Chief Lecturer in the Department of Science Laboratory Technology (Chemistry Option) and also Director in-charge of Tertiary Education Trust Fund (TETFund) Projects in the Polytechnic.  Under her stewardship, Federal Polytechnic, Oko, witnessed unprecedented advancements in infrastructure and institutional transformation.  Her leadership facilitated monumental developments across the Polytechnic’s campuses in Oko, ...
Read more

#Watchvideo : SECURITY FORCES BURST THE CAMP OF UNKNOWN GUNMEN IN AKOKWA

Security Forces in the state through a coordinated intelligence report has bursted the camp of the unknown gunmen at Akokwa, Arondizuogu after a long gun duel which resulted to the death of some of the criminals and others arrested. These criminal elements have been known to be behind several attacks in the state such as the killing of police men in Mbaise, Aba Branch in Ehime Mbano, burning down of police stations, attack and attempted kidnapping of former Governor Ikedi Ohakim, abduction of Miss. P.P. Johnson, a female soldier in Okigwe and recently the attack in Akokwa that left many dead. It is obvious that these daredevil gunmen have been perpetuating their evil plans unabated until yesterday when their camp was bursted by security agencies. This is another assurance that our security operatives are leaving no stone unturned in the fight against banditry and other related activities. While it has become obvious that the activities of these non state actors are politically motivate...
Read more

Valentine Ozigbo Resigns from Labour Party

In a shocking move, against all speculations over the last few days, Valentine Ozigbo, a close ally of Peter Obi, has announced his resignation from the Labour Party (LP). Ozigbo confirmed his decision to Diaspora Digital Media on Wednesday, February 19, 2025, but declined to provide further details, opting instead to share his reasons during an interactive session on X (Twitter) Space.  The session, scheduled for 8 PM, will feature Ozigbo in conversation with Anambra's First Son, @uchepokoye, discussing pressing issues affecting Anambra State, including security challenges, societal fabric collapse, and the hope for a better future. Ozigbo's resignation has sparked interest, with many awaiting his detailed explanation for leaving the Labour Party. His decision comes at a critical time for the party, which has been navigating various challenges in recent months. Credit:  Diaspora Digital Media 
Read more