The federal government and international oil companies (IOCs) operating in the country are to calculate and negotiate arrears of contractual obligations to the former and the benefitting states, arising from last week’s decision of the Supreme Court over the sharing of crude oil proceeds whenever its price is above $20 per barrel based on the interpretation of Section 16(1) of the Deep Offshore and Inland Basin PSC Act.

The Supreme Court in a landmark judgment last Wednesday, had ordered the federal government to adjust its share of proceeds from the sale of crude oil whenever the price exceeds $20 per barrel. The order, which was made in a ruling in a suit filed by the Attorneys-General of Rivers, Bayelsa and Akwa Ibom States, was a fallout of the terms of settlement between the Attorney General of the Federation (AGF) and the plaintiffs.

The seven-man panel of the apex court, which included the Chief Justice of Nigeria, Justice Walter Onnoghen, in a unanimous ruling, ordered that the 13 per cent derivation that is due to the oil producing states be paid upon recovery, in accordance with Section 162 of the 1999 Constitution (as amended).

The lead counsel to the three states, Mr. Lucius Nwosu (SAN), said the terms set by the apex court, was for the parties to set up a committee to within a period of time, sit down and calculate the backlog of unpaid contractual obligations to the federal government and the benefitting states.

Source: THIS DAY