The Nigerian government, through its attorney-General, Abubakar Malami, says it is determined to recover over $62 billion from multi-national oil companies for 'under-payment' to the country since 1998.
Under the country's joint operating agreement, Nigeria is authorised to review the existing profit-sharing formula with its partners once crude oil prices at the international oil market rise above $20 per barrel.
But, the Minister of Justice, Mr Malami, was quoted to have said that Nigeria was unable to enforce the law since October 1998 when oil prices rose above the agreed threshold.
Reuters reported the Minister as confirming that the joint venture partners with the Nigerian Nation Petroleum Corporation (NNPC) "have been reluctant to adjust the sharing formula in line with their various operating agreements".
The six international oil companies are currently having joint operating agreements with the NNPC on behalf of the Nigerian government.
They include Shell Petroleum Development Company, Mobil Producing Nigeria Unlimited, Chevron Nigeria Limited, Nigeria Agip Oil Company, TotalElf Nigeria, and Pan Ocean Oil Company.
Apart from Shell, which holds 55 per cent equity in Shell/NNPC joint venture, all others control at least 60 per cent of the interests in the shares.
In 2014, crude oil prices at the international market rose to unprecedented levels by exceeding an average of $100 per barrel.
The price, however, plunged to the lowest level in decades in 2016, triggering a recession in the Nigerian economy, which depends almost 90 per cent on oil exports to survive.
Although the country has since recovered from the economic setback following a gradual improvement in oil price levels, the government has been desperate to find additional revenues to balance its budget.
With mounting criticisms by Nigerians against government's continued foreign borrowings to execute infrastructure necessary to drive growth in the economy, the search for alternative revenue sources has become inevitable.
Details of the N10.3 trillion "Budget of Sustaining Growth and Job Creation" for 2020 presented by President Muhammadu Buhari to a joint session of the National Assembly on Tuesday showed revenue projection for the year at about N8.2 trillion.
The budget proposal showed deficit levels at over N2.1 trillion, which government says would be funding with external and domestic borrowings as well as revenues expected from 50 per cent increase to the prevailing value-added tax rate from 5 to 7.5 per cent.
But, Mr Malami is quoted as saying that Nigeria has been "short-changed" by the oil majors' refusal to comply with the provision of the 1990 joint oil production sharing contracts, which allows the government to review revenue sharing formula when oil price rises above $20 per barrel.
He said considering the precarious situation the Nigerian economy has found itself, the government had no option than to begin to pursue the enforcement of the provisions of the agreement to recover the amounts the oil majors under-paid the government.
Although he was not certain about the exact figure the government is expected to recover from the companies, Mr Malami is quoted to have put the figure conservatively at about $62 billion.
"Computing the amount that should be credited to the Nigerian government if the law was effectively applied will translate to about $62 billion," the Minister told Reuters.
He also said Nigeria is "open to all options, as the government has no limits to what the terms of engagement and settlement are".