Oil companies owe FG N1.38tn–NEITI and how NEITI can help to recover the money

by Israel Olasinde

Oil companies owe FG N1.38tn–NEITI


Executive Secretary, NEITI, Mrs. Zainab Ahmed
Executive Secretary, NEITI, Mrs. Zainab Ahmed
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Oil companies operating in Nigeria owe the Federal Government over $7bn (N1.38tn), the Nigerian Extractive Industries Transparency Initiative has said.

NEITI also stated that the restructuring at the Nigerian National Petroleum Corporation was part of its recommendations to the past government, but this was ignored.

The agency said it welcomed President Muhammadu Buhari’s decision to set up a Presidential Committee on anti-corruption led by Prof. Itse Sagay, SAN.

It described the committee as a good platform for all the 21 anti-corruption agencies, coordinated by the Technical Unit on Governance and Anti-Corruption under the chairmanship of NEITI, to share information and offer informed advice based on experiences over the years.

The agency, in a statement issued by the Director of Communications, Dr. Ogbonnaya Orji, said, “One important issue that NEITI will be bringing to the table if given opportunity is how the committee can assist the government to recover over $7bn owed by oil companies.”

It said the amount was arrived at after the agency computed cases of underpayments, under assessment’s arising from subjective interpretation of MoUs and tax laws.

It said it had no doubt that its contributions would add value to the work of the committee.

“It is our expectation that Prof. Sagay’s committee will provide NEITI and all the agencies under the Inter-Agency Task Team an opportunity to make presentations,” it said.

The agency said the stance by Buhari to restructure the management and administrative organs of the NNPC would inspire hope and confidence.

It said, “The measures are also consistent with the findings and recommendations of NEITI in its various independent audit reports. These reports
were ignored in the past.

“We are therefore delighted that the much-needed political will required to boldly implement the NEITI recommended reforms is now provided, available and accessible under the leadership of President Muhamadu Buhari.”

It said the appointment of Dr. Emmanuel Kachikwu as the Group Managing Director of the NNPC was already evident in the ongoing dismantling of the unwieldy structure of the corporation that made it impossible in the past for it to respond to increasing public demands for reforms.

It urged the NNPC GMD to consider it a priority to carefully study the findings and recommendations outlined in NEITI’s independent reports on the sector.

It said, “Among these recommendations are the issue of inadequate metering infrastructure for accurate measurement of crude, the onerous Joint Venture cash call regime, inefficient cost determination, urgent resolution and review of pricing issues related to expired MoUs and legal agreements with oil companies that have huge revenue loss implications for the nation.

“Others are huge costs of fuel subsidy, crude oil swap and products exchange agreements, repair of the refineries, oil theft, review of existing fiscal regime in the industry, automation of record keeping, and the politics of acquisition and assignments of oil blocks by discretion etc. NEITI is ready and willing to provide further details if required.”

It said the recent pronouncement of Kachikwu on remittances of all NLNG dividends directly to the Federation Account as required by law was demanded by all NEITI reports.

The agency explained that by implementation of this remedial issue alone, a total of $11.6bn that was paid by NLNG to NNPC but not remitted by the NNPC to the Federation Account, could be recovered into government coffers.

NEITI endorsed the directive on operation of a single treasury account system directed by President Buhar

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