55 Oil Companies Owe FG N1.32tn -NEITI Report
The Nigeria Extractive Industries Transparency Initiative on Monday released the 2020 oil and gas industry report, as it announced that the indebtedness of 55 oil companies to the Federal Government was N1.32tn.
NEITI also revealed that a total of 370 oil spill cases were recorded during the review period, adding that 3.4 million litres of oil was spilled in 257 minor spills, 23 medium spills and one major spill.
At the public presentation of the report in Abuja, the Executive Secretary, NEITI, Orji Ogbonnaya-Orji, explained that the liabilities of the 51 oil companies to the Federation as at December 31, 2020 was N1.32tn or $3.17bn compared to the N2.6tn owed in 2019.
The agency’s latest report indicated that the number of defaulting companies dropped from the 77 reported by NEITI in 2019 to 51 in 2020.
Ogbonnaya-Orji described the current debts as collectable revenues that were due to the Federation by the defunct Department of Petroleum Resources and the Federal Inland Revenue Service.
On the revenue streams that accounted for the liabilities in question, NEITI stated that they include royalty oil, royalty gas, concession rentals, Petroleum Profit Tax, Company Income Tax, Education tax, Value Added Tax, Withholding Tax, among others.
Although NEITI did not name the defaulting companies at the public presentation of the report, it assured officials of the FIRS at the event that the identities of the firms would be made available to the service to help in the recovery of the funds.
“The public disclosure of companies’ liabilities to the Federation by NEITI is in line with its national mandate and in fulfilment of its obligation as a member of the global Extractive Industries Transparency Initiative, and not in any way against the companies,” Ogbonnaya-Orji stated.
He explained that NEITI’s disclosure sought to draw the attention of the oil and gas companies to their obligations to remit all revenues due to 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.
The NEITI boss 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,” he 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 2020 oil and gas report also 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 oil and gas sector, the report disclosed that $14.65bn, representing 71.17 per cent of the total earnings in 2020, was remitted to the account.
It stated that the total aggregate financial flows from the oil and gas sector to government in 10 years (2011-2020) was $394.029bn.
NEITI further stated that 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,” NEITI stated in its latest report.
On domestic crude allocation and consumption, the NEITI report disclosed that 107.746 million barrels was managed by the Nigerian National Petroleum Company Limited under the Direct Sale Direct Purchase arrangement.
It also revealed 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 NEITI report disclosed that NGN106.9bn was paid as subsidy between January and June 2020 to sustain product availability with an outstanding balance of N26.74bn yet to be paid.
NEITI also reported that 20.01 billion litres of petrol, 52 million litres of kerosene and 5.33 billion litres of diesel were imported into the country for domestic use during the period under review.
On oil theft and crude losses, the report made assessment based on the data provided to NEITI by 22 of the 69 covered companies.
According to the result of the assessment, 39.16 million barrels of crude valued at $44.73m (N15.71bn) was 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 transparency agency stated.
On gas production, the report stated that 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.
