Three states drag FG to S’Court over loss of N500tr revenue

Three major oil producing states, Rivers, Bayelsa and Akwa Ibom, have sued the Federal government at the Supreme Court challenging the loss of N500 trillion oil revenue to oil companies operating in Nigeria as a result of negligence in the execution of oil production contracts.

The plaintiffs, who bemoaned the huge oil revenue loss, are asking the apex court to compel the Federal Government to implement section 162 of the 1999 constitution as it relates to oil revenue generation and sharing among the component parts of the federation.

In the originating summons filed by Luscious Nwosu (SAN) on behalf of the three states, the Supreme Court has been called upon to determine whether there is a statutory obligation imposed on the defendant pursuant to section 16 of the Deep Offshore and Inland Basin Production Sharing Contracts Act. Cap D3 of the laws of the federation 2004.

Plaintiffs also want the apex court to determine whether there is a statutory obligation imposed on the Federal Government to adjust the share of the government of the federation in the additional revenue accruing under the various production sharing contracts approved by the defendant if the price of crude oil at any time exceeds $20 per barrel, in real terms, to such extent that the production sharing contracts shall be economically beneficial to the government of the federation.

They further asked the court to determine whether the failure of the defendant (Federal Government) to adjust the share of the governments of the federation in the additional revenue accruing under the production sharing contracts it approved following the increase of price of crude oil in excess of $20 did not constitute a breach of the said section 16 of the Deep Offshore and Inland Basin Production Sharing Contracts Act.

They, therefore, asked the apex court for a declaration that there is a statutory obligation imposed on the defendant by section 16 of the Deep Offshore and Inland Basin Production Sharing Contracts Act.

The three states also sought a declaration that the failure of the defendant to adjust the share of government in the additional revenue in the production sharing contracts as variously approved following the increase of price of crude oil in excess of $20 constitute a breach of section 16 of the Deep Offshore and Inland Basin Production Sharing Contracts Act.

The states also sought consequential order of the apex court to compel the defendant to adjust the share of the
government of the federation in the additional revenue under all the production sharing contracts in the Nigeria’s oil industry within the Inland Basin and deep offshore areas as approved by the defendant from the respective terms the price of crude oil exceeded $20 per barrel.

Besides, the three plaintiffs also want order of the Supreme Court to compel the Federal Government to calculate in arrears with effect from August 2003 and recover and pay immediately all outstanding statutory allocations due and payable to them from the said adjustment.

In a 33 paragraph affidavit in support of their originating summons, the plaintiffs said that they sought to invoke the original jurisdiction of the Supreme Court to interpret various constitutional provisions in sections 80(1), 162(1) of the 1999 constitution and section 16(1) of the Deep Offshore and Inland Basin Production Contacts Act Cap D3 laws of the federation 2004 as it relates to the fiscal responsibility of the defendant to them.

They averred that the defendant is by the constitution vested with ownership and control of all crude hydrocarbon petroleum oil and gas in Nigeria which include the collection of revenue therefrom into the federation account and consolidated revenue fund.

When the matter came up for mention on Thursday, the plaintiff counsel informed that Akwa Ibom State had filed application to be joined as co- plaintiff.

Federal Government counsel, Tijani Gazali, said he had no objection.

Presiding Justice of the seven man panel, Justice Bode Rhodes- Vivour, adjourned the matter to November 14, 2017.