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The Attorney-General of the Federation (AGF) and Minister of Justice, Abubakar Malami (SAN), has declared that there is no limit to what the Federal Government could do in terms of engagement and settlement in pursuit of $62 billion oil revenues allegedly underpaid by Shell, Chevron, ExxonMobil and two other oil super majors.

The country is seeking recovery of $62 billion from the oil companies, including Total and Eni, using a 2018 Supreme Court ruling, which it says enables it to increase its share of income from production-sharing contracts (PSCs).

Stating that Nigeria had been “short-changed” under the law by the companies, Malami said in a telephone interview with Reuters yesterday, that the regulations allow the government to revisit revenue-sharing deals on petroleum sales if crude prices exceed $20 a barrel.

The government was pursuing a case for recovery if it was established that the oil companies had underpaid the government, he said.

The AGF said: “Computing the amount that should be credited to the Nigerian government if the law was effectively applied, that translates to around $62 billion against the IOCs (international oil companies).

“All options are on the table and there is no limit to what we can do in terms of engagement, in terms of settlement, if the need arises.”

Though Malami declined to name the oil companies involved in the matter, industry and government sources declared, according to Reuters that Royal Dutch Shell, Chevron, Exxon Mobil and Eni, were earlier asked to pay the central government between $2.5 billion and $5 billion each.

In the latest plan, the government argued that the energy companies failed to comply with a 1993 contract-law requirement that the state receive a greater share of revenue when the oil price exceeds $20 per barrel, according to a document prepared by the attorney general’s office and the Justice Ministry.

Oil prices rose to more than $100 a barrel in 2014 before a sharp drop that triggered a 2016 recession in Nigeria, leaving the government struggling to fund its budgets.

Under the production-sharing contract law, companies, including Shell Plc, ExxonMobil Corp., Chevron Corp., Total SA and Eni SpA, agreed to fund the exploration and production of deep offshore oil fields on the basis that they would share profit with the government after recovering their costs.

When the law came into effect 26 years ago, crude was selling for $9.50 per barrel. The oil companies currently take 80% of the profit from these deep offshore fields, while the government receives 20%, according to the document.

Most of Nigeria’s crude is pumped by the five oil companies, which operate joint ventures and partnerships with the Nigerian National Petroleum Corporation (NNPC).

Representatives of the oil companies met Malami on October 3 in Abuja.

Malami reportedly told them that while no hostility is intended toward investors, the government would ensure all the country’s laws are respected, Reuters reported.

Oil companies, including Shell, have gone to the Federal High Court to challenge the government’s claim that they owe the state any money, arguing that the Supreme Court ruling doesn’t allow the government to collect arrears. They also contend that because the companies weren’t party to the 2018 case, they shouldn’t be subject to the ruling.

“We do not agree with the legal basis for the claim that we owe outstanding revenues,” Bloomberg quoted Shell’s Nigerian unit to have said in an emailed response to questions.

Chevron’s spokesman, Ray Fohr, said the company doesn’t comment on matters before the court. Its units in Nigeria “comply with all applicable laws and regulations,” he said by email.

Exxon and Total declined to comment, while Eni officials didn’t immediately respond to requests for comment.

The Supreme Court ruling followed a lawsuit by states in Nigeria’s oil-producing region seeking an 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 to take steps to recover the outstanding revenue.

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, according to the document.

“Instead, it imposes a duty on the oil companies and contracting parties, being NNPC, to by themselves review the sharing formula,” the ministry said.