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| NNPC Towers Abuja |
It has been disclosed by the Nigeria Extractive Industries Transparency Initiative (NEITI) that a total sum of $8 billion is currently at stake in a disagreement between the contractors(oil multinationals) and Nigerian National Petroleum Corporation (NNPC) over legal basis used in calculating revenues from the Petroleum Sharing Contracts (PSC), royalty payments and petroleum profit tax (PPT) accruable from Nigeria's hydrocarbon resources.
Having audited NNPC in 2006-2008, it explained that NNPC and the contractors are currently before an arbitration panel which is expected to determine the legal status for calculating various proceeds from activities in the sector.
The report we gathered did not however divulge the identity of the contractors or composition of the panel but stated that: "The audit observed that the legal basis for Petroleum Sharing Contract (PSC), royalty, and petroleum profit tax (PPT) calculations were in dispute between NNPC and the contractors and therefore before an arbitration panel", It further explained that the NNPC stands to incur a possible liability of $8 billion if it loses in the negotiation, This transcends to cost and fiscal entitlements with a possible contingent liability of up to $8 billion if NNPC loses the arbitration, it noted.
(Edited by: Blueblock)
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