(Ecofin Agency) - The Nigerian National Petroleum Corporation (NNPC) has recommended some legal changes to the Deep Offshore and Inland Basin Production Sharing Contract (PSC) Act.

This changes will enable the Federal Government improve the collection of royalties and other revenue from deep water oil production.

According to NNPC Chief Operating Officer for Upstream activities, Malam Bello Rabiu, it is important to increase royalties in all categories so as to increase government revenue.

“It is our opinion that the proposal to increase the royalty rate for terrains beyond 1,000 metres, from zero per cent to three per cent, is commendable but it is necessary to also make corresponding adjustments in other categories,” he said.

In order to ensure impartiality and balance between the government and PSC contractors, what is due to the government should be calculated based on production and price, he stated adding that the petroleum minister should have authority to occasionally set royalties to be paid, for acreages located in deep offshore and inland basin production-sharing contracts.

The NNPC COO, advised that some incentives like investment tax credit, investment tax allowance and capital allowances to PSC contractors, should be removed.

Anita Fatunji