IN a bid to increase its oil revenues, the Federal Government is set to reclaim $62 billion from five major international oil companies working in Nigeria through a Supreme Court ruling that allows it lay claim to income from the production-sharing contracts.

A Bloomberg report referenced a document from the attorney general’s office and the Ministry of Justice stating that the oil companies failed to comply with a 1993 contract requirement that the state should receive a balanced share of revenue earned by the oil firms when the oil price exceeds $20 per barrel.

Currently, oil companies take 80 per cent of the profit from these deep-offshore fields, while the Federal Government receives 20 per cent according to the document.

“The 1993 law required that its provisions be reviewed after 15 years and subsequently every five years. The attorney general’s office insists that the provision for a higher share of revenue doesn’t require legislative action to take effect,” the document affirms.

The firms involved include Royal Dutch Shell Plc, ExxonMobil Corp, Chevron Corp, Total SA and Eni SpA which were signatories to the production-sharing contract that funds the exploration and production of deep-offshore oil fields on the basis that they would share profit with the government after recovering their costs.

A bulk of deep offshore crude oil being pumped from Nigeria is carried out by the five oil firms operating joint ventures and partnerships with the Nigerian National Petroleum Corporation, NNPC.

A Supreme Court ruling followed a lawsuit by states in the oil-producing region seeking the interpretation of the nation’s production-sharing law. The states argued that they weren’t receiving their full due.

The court ruled in their favour and asked the Attorney General and justice minister, Malami Abubakar to take steps to recover the outstanding revenue.

Royal Dutch Shell Plc, proceeded to the Federal High Court to dispute the Federal government’s claim that they owe the state any money, arguing that the Supreme Court judgment doesn’t allow the government to collect arrears.

Shell’s head of upstream Andy Brown in an interview hinted that the company wasn’t party to the court ruling in 2018 and shouldn’t be subject to the ruling.

“It is something that has gone through the courts in Nigeria which relates to an original clause within the original PSCs (production sharing contracts). We will have to take it seriously but we think it has no merits,” he said.

Several multinational firms have been fined by the Federal Government in recent times. In 2019, MTN Group Ltd paid an estimated $1 billion for failing to disconnect undocumented SIM-card users, while JPMorgan Chase & Co were also sued by the Nigerian government in a corruption scandal.