The Supreme Court on Wednesday ordered Federal Government to immediately commence steps to recover all revenues lost to the international oil companies (IOCs) and other Exploration and Production (E&P) companies due to wrong profit under the Production Sharing Contracts since August 2003.

A seven-man panel of the apex court led by the Chief Justice of Nigeria, Justice Walter Onnoghen, gave the order in a consent judgment in a suit filed by three states, Rivers, Bayelsa and Akwa Ibom, against the Federal Government in 2016.

The apex court adopted as its judgment the terms of settlement which were filed on April 6, this year by the Attorneys General of the states and the Federal Government, through the Attorney General of the Federation (AGF).

The terms of the settlement were signed by the Attorneys General of the three states, namely Emmanuel Aguma (SAN) for Rivers State, Kemasuode Wogu for Bayelsa State and Uwemedimo Nwoko for Akwa Ibom State as well as the lead counsel for the AGF, Mr Lucius Nwosu.

In addition, the Permanent Secretary in the Federal Ministry of Justice, Mr Dayo Apata, signed as the witness.

Based on the agreement between the states and the Federal Government which culminated in the consent judgment of the apex court, the AGF, Abubakar Malami (SAN), is to work with the affected states within 90 days to “immediately set up a body and the necessary mechanism for recovery” of all the lost revenue since August 2003.

Rivers, Bayelsa and Akwa Ibom States which jointly filed the suit marked SC.964/2016, in the names of their respective Attorneys General, had contended that the Federal Government had been short-changed on its supposed shares of estimated earnings of $1,149,750,000,000, under the (PSC) for the period between 2003 and 2015.

The states attributed the substantial losses suffered by the government to the failure of the Minister of Petroleum Resources to commence the re-adjustment of the sharing formula (the PSC) of 60 per cent share of oil profits to the Federal Government and 40 per cent to the oil companies for over 15 years.

The plaintiffs argued that the Federal Government had suffered huge losses under the PSC because of non-compliance with Section 16(1) of the Deep Offshore and Inland Basin Production Sharing Contracts Act which was said to have come into effect since January 1, 1993.

In addition, they faulted Section 8(1)(f) of the Production Sharing Contracts between the Federal Government and the oil companies, which makes provision for the 60 to 40 per cent sharing agreement.

In their argument, they maintained that under the Deep Offshore and Inland Basin Production Sharing Contracts Act, there ought to be an upward re-adjustment of Federal Government’s share of oil profit “in a manner as to become economically beneficial to the Federal Government” whenever the price of crude oil exceeded $20 per barrel.

The states argued that the PSC, which provides for the current sharing formula between the Federal Government and the oil companies, could no longer be valid because the oil prices had since the past years risen above the $20 per barrel reflected in the PSC Act.