Nigeria does not expect that it would get all of the $62 billion claim made against international oil companies in a dispute over sharing of profits from deepwater wells.

The government has started discussing with the oil majors over the disagreement but does not expect that they have the money to pay, Timipre Sylva, minister of state for Petroleum Resources said.

“Nobody can bring out that kind of money. We can’t get $62 billion. We can maybe get something out of them but we can’t get back $62 billion” Sylva said.

Africa’s largest oil producer is keen on passing into law an amended petroleum bill that guides how profit is shared between the government and oil firms in deep offshore exploration. The new law, which scaled through the Senate on Tuesday and now awaiting concurrence by the House of Representatives before its sent to the president for assent, adjusts the tax regime in the sector so that the government gets a higher take from profits.

Most of Nigeria’s crude is pumped by Royal Dutch Shell Plc, Exxon Mobil Corp., Chevron Corp., Total SA and Eni SpA, who operate joint ventures with state-owned Nigerian National Petroleum Corp. Under production-sharing legislation, the companies agreed to fund the development of deepwater oil fields on the basis that they would share profit with the government after recovering their costs.

It was part of the agreement that the government will negotiate a bigger share of profits once oil prices rose above $20 a barrel. Crude was selling at $9.50 a barrel when the law became effective 26 years ago, but the deal was never renegotiated when crude rose above the agreed price.

“We were supposed to negotiate and get some additional revenue. Unfortunately we slept on our right, so we didn’t take advantage of that. The money is gone because this money has not been kept in some cupboard. So of course it’s a lost opportunity” Sylva said.

Source: bnn bloomberg