A LEGAL REVIEW OF THE DEEP OFFSHORE AND INLAND BASIN PRODUCTION SHARING CONTRACT (AMENDMENT) ACT 2019: ISSUES ARISING

Abstract

In Nigeria, oil and gas contracts could be in the form of a Joint Venture agreement, a Service Contract, Concession, or a Production Sharing Contract agreement. This paper focused on the contractual arrangements captured under the Production Sharing Contract arrangement. The principal legislation regulating contractual arrangements under the Production Sharing Contract is the Deep Offshore Inland Basin Production Sharing Contract Act 2004 (DOIBPSCA). The Production sharing Contract arrangement was adopted to aid the funding constraints created by the joint venture agreements. In 2019, an amendment bill was passed by the senate amending the principal Act of 2004 which has been assented to by the president. The Deep Offshore and Inland Basin Production Sharing Contract (Amendment) Act of 2019 sought to cure the lacunae created by the Act of 2004. Over the years, there have been need to review the fiscal terms associated with the Deep offshore and Inland Basin Production Sharing Contract Act of 2004 (DOIBPA) which incentives to the International Oil Companies (IOC’s) to encourage them to invest in the oil and gas sector in Nigeria. The need to reflect a more equitable and increased source of revenue is vividly captured under the amendment Act of 2019. This study therefore took a critical look at the reviews contained in the Amendment Act, the increase in the fiscal measures as contained in the Act, its implication to the IOC’s and its effect on investments in the oil and gas sector in Nigeria and made recommendations thereto.