Nigeria Extractive Industries Transparency Initiative (NEITI) says 51 oil companies owe the Federal Government of Nigeria N1.32tn.
Gatekeepers News reports that NEITI announced this in the 2020 oil and gas industry report released on Monday.
The Executive Secretary, NEITI, Orji Ogbonnaya-Orji, at the public presentation of the report in Abuja explained that the liabilities of the 51 oil companies to the Federation as of December 31, 2020, were N1.32tn or $3.17bn compared to the N2.6tn owed in 2019.
In the report, NEITI disclosed that a total of 370 oil spill cases were recorded during the review period, adding that 3.4 million litres of oil were spilled in 257 minor spills, 23 medium spills, and one major spill.
According to Ogbonnaya-Orji, the latest report indicated that the number of defaulting companies dropped from the 77 reported by NEITI in 2019 to 51 in 2020.
The agency’s Executive Secretary described the current debts as collectible revenues that were due to the Federation by the defunct Department of Petroleum Resources (DPR) and the Federal Inland Revenue Service (FIRS).
According to NEITI, the revenue streams that accounted for the liabilities in question include royalty oil, royalty gas, concession rentals, Petroleum Profit Tax, Company Income Tax, Education Tax, Value Added Tax, Withholding Tax, among others.
Although the names of the defaulting companies were not listed at the public presentation of the report, the agency assured officials of the FIRS in the event that the identities of the firms would be made available to the service to help in the recovery of the funds.
Ogbonnaya-Orji stated that “The public disclosure of companies’ liabilities to the Federation by NEITI is in line with its national mandate and in fulfillment of its obligation as a member of the global Extractive Industries Transparency Initiative, and not in any way against the companies.”
The NEITI boss further explained that the agency’s disclosure sought to draw the attention of the oil and gas companies to their obligations to remit all revenues due to the government, especially at this time that government was in dire need of revenues to rebuild the nation’s infrastructure and improve the country’s investment climate.
He described oil companies operating in Nigeria as the backbone of the industry.
“Without the companies, there will be no industry, no investments, and no revenues to remit,” the NEITI boss said.
Ogbonnaya-Orji added, “So NEITI will continue to support the companies and also expect that they live up to their obligations as regard to payment of taxes, royalties, and levies to the Federation, as they do in other jurisdictions of their operations.”
The report further revealed that Nigeria earned $20.43bn from the sector in 2020, representing a decline of 40 per cent when compared to the N34.22bn realised from the sector in 2019.
On remittances to the Federation Account from the sector, the report disclosed that $14.65bn, representing 71.17 per cent of the total earnings in 2020, was remitted to the account.
It stressed that the total aggregate financial flows from the oil and gas sector to the government in 10 years (2011-2020) was $394.029bn.
According to NEITI, the total crude oil production in 2020 was 646.7 million barrels, representing a 12 per cent decrease when compared to the 735.24 million barrels produced in 2019.
“Out of the above total production in 2020, 648.48 million barrels were lifted, and this was 11.85 per cent lower than the 735.66 million barrels lifted in 2019,” the report further read.
On domestic crude allocation and consumption, the NEITI report disclosed that 107.746 million barrels were managed by the Nigerian National Petroleum Company Limited under the Direct Sale Direct Purchase arrangement.
It added that the value of the crude exchanged under the DSDP arrangement was $6.7bn, while the value of the refined products received for local consumption was $6.03bn, indicating a variance of $134.78m.
On fuel subsidy, the report revealed that N106.9bn was paid as subsidy between January and June 2020 to sustain product availability with an outstanding balance of N26.74bn yet to be paid.
The agency further reported that 20.01 billion litres of petrol, 52 million litres of kerosene, and 5.33 billion litres of diesel were imported into Nigeria for domestic use during the period under review.
On oil theft and crude losses, the agency’s report made an assessment based on the data provided to the agency by 22 of the 69 covered companies.
The result of the assessment showed that 39.16 million barrels of crude valued at $44.73m (N15.71bn) were stolen with 349 cases of pipeline vandalism recorded in 2020.
“This is an improvement when compared to the 1,387 cases of vandalism reported in 2019,” the agency stated.
According to the report, the gas sub-sector contributed over $1.5bn to the Federation Account, adding that total gas production in 2020 was 3.01 million cubic feet.
It stated that while 64 per cent of this total quantity was sold, eight per cent was flared and four per cent unaccounted for.
The NEITI report also showed that the oil and gas sector contributed only 8.16 per cent to the total Gross Domestic Product in 2020, which represented a decline of 0.46 per cent when compared to the 8.62 per cent recorded in 2019.
The report further revealed that the sector dominated the country’s export in 2020, contributing about 75 per cent or N9.44tn of the total export value of N12.52tn.
Meanwhile, NEITI in its report called for investigations into the circumstances surrounding the transfer of the Federation’s stake in OML 24 operated by Pan Ocean and New Cross Energy.
