Abuja — The National Assembly, the Federal government and oil companies operating in the country may be heading for a collision course following moves by the National Assembly to dump the Memorandum of Understanding (MoU) signed between the oil companies in Nigeria and the Federal Government on the August 4, 1986 when oil sold for $9 in the international market.

The companies had then met with the Federal Government on the need to have some incentives built in for them, so they could produce more and make more profit. This they felt could help them recoup the production cost and also make more money for the Federal Government.

The MoU which had been reviewed severally, the last being in 2000 and signed by one Dr. Aboki who was the Permanent Secretary and Mr Gaius Obaseki, the then Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), specifically gives the oil companies tax incentives.

But National Assembly after a critical look at the MoU says the document should be confined to the archives "because it is funny and out of tune with realities and also mockery of the intelligence of Nigerians by the oil companies operating in the country."

Honourable Tam Brisibe, the member representing Burutu Federal constituency of Delta state, who also is chairman of the House Committee on Petroleum (Upstream), confirmed existence of the document to THISDAY. He said "there is no need for that memo in place now. What is the legality of such a document when there is the Petroleum Profit Tax .? As you can see does an MoU supersede a tax Act? Or Why the MoU when there is an Act in place.?The National Assembly is worried that though the memo has outlived its usefulness, the oil companies are not in a hurry to move with the current reality as they have benefited so much from the document.It was gathered that when the clumsy and lopsided document was signed, the agreement reached between government and the companies was that the Minister or the official in charge should advise government when the oil price reaches at least $30bpd.

Although the oil companies have been briefed on the moves by government, THISDAY confirmed that after a closed door meeting with lawmakers at the new Complex of the National Assembly complex before both chambers went on break, the companies after going through the documents asked that they be given more time to meet and then come up with a position on the MoU.