LAGOS: Nigeria is looking to claim $62 billion from international oil firms for back revenues it says it is owed — but even the country’s own oil minister admits the government has little chance of success.

The eye-watering amount relates to a 1993 law governing production sharing agreements between the country and oil majors that said the revenue split should be reviewed if prices reached over $20 per barrel.

Despite the price of crude soaring above that point over the past two decades the division of spoils was never recalculated — and Africa’s biggest oil producer insists the time has come to pay up.

In October 2018, three oil-rich states in southern Nigeria won a court ruling obliging the central government to up its share of the revenues from the lucrative offshore fields.

When the law governing production-sharing contracts came into effect 26 years ago, foreign oil majors agreed to pay about 20 per cent of revenues from deep offshore facilities to the government.

The authorities say that means they are owed funds — and have come up with figure.

“We are demanding $62bn from oil companies,” Nigeria’s Attorney General Abubakar Malami confirmed to AFP.

‘No basis’

But the details of the claim remain sketchy and the way forward unclear.

Oil executives insist the companies are not liable for any back payments.

AFP has learnt that at least five cases are before the Nigerian high court challenging the claim.

Some of the world’s biggest energy companies — Shell, Exxon Mobil, Chevron Eni, Total and CNOOC — extract most of the crude oil in Nigeria. “These demands have no basis,” a representative of one of the major oil firms told AFP on condition of anonymity.

“We have no idea how the government arrived at such an amount, it has not told us.” The executive said the companies were not involved in the case between the oil-producing regions and the government that resulted in the 2018 ruling.

Published in Dawn, October 17th, 2019