77 Oil Companies Owing FG N2.6trn – NEITI

NEITI Executive Secretary, Dr. Ogbonnaya Orji speaks during a press conference in Abuja on September 28, 2021.

 

Seventy-seven oil companies owe the Federal Government N2.6 trillion debt, the Nigeria Extractive Industries Transparency Initiative (NEITI) has said.

The debt arises from the failure to remit petroleum profit tax, company income tax, value-added tax, royalty, and concession on rentals.

NEITI Executive Secretary, Dr. Ogbonnaya Orji disclosed this on Tuesday while presenting the agency’s scorecard in the last seven months during a press briefing in Abuja.

“The NEITI reports based on findings in its 2019 audit of the oil and gas sector show that oil and gas companies in Nigeria owe government about $6.48bn, which equals N2.66tn at today’s exchange rate of N410.35,” he said.

“A breakdown of the figures shows that a total of $143.99m is owed as petroleum profit taxes, $1.089bn as company income taxes, and $201.69m as education tax.

“Others include $18.46m and £972,000 as Value Added Tax, $23.91m and £997,000 as withholding tax, $4.357bn as royalty oil, $292.44m as royalty gas, while $270.187m and $41.86m were unremitted gas flare penalties and concession rentals respectively.”

While underscoring the importance of the funds to the economy, he said that the agency is set to take measures to recover the money.

According to the NEITI boss, the disclosure was important in view of the government’s current search for revenue to address the demand for steady power, good roads, quality education, fight against insurgency, and job creation.

Orji explained that NEITI decided to provide relevant information and data to support the government’s efforts at recovering this money.

He also cautioned oil firms that NEITI would no longer watch while these debts continued to remain in its reports unaddressed.

Revenue Allocation: Governor Emmanuel Calls For Upward Review

Akwa Ibom Governor, Udom Emmanuel

 

Akwa Ibom State Governor, Udom Emmanuel has called on the Federal Government to upwardly review the revenue allocation to states in order to improve economic growth and enhance industrialization in the country.

Governor Emmanuel made the call on Thursday when members of the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) visited him at Government House in Uyo.

He urged the team to reflect the major challenges of the states in their input and work towards its implementation to further assist states tackle pending financial issues.

The governor further appealed to the Federal Government to review the revenue allocation of the state to address the issue of population increase, marine security along the coastal lines, and erosion menace to reduce the burden on the state government.

READ ALSO: Kogi Govt Threatens To Sue EFCC Over Salary Bailout Funds

“Honestly, the current sharing formula is not helping matters at all especially for us in the oil-producing areas. What you sign into law from the center is also a major problem. How can you say that a community will take only 3% of the proceeds of the NNPC? This is generating a lot of heat here but we are trying to manage that.

“So, I hope this won’t be a similar exercise and that what we contribute will be taken into consideration. What we should do is to build and unite the country, coordinate economic activities for our growth and for the interest of everybody so that we can live in peace. I welcome you to the state; be rest assured you will have all our cooperation and the exercise will go smoothly. Please, let it be an exercise that will yield success and not another fruitless labour,” the governor explained.

The governor regretted that the state does not receive revenue from its large gas reserve, and VAT from international oil companies (IOCs) operating in the state.

“Gas is a major issue; I can’t be a state that sits on the largest quantum of gas in this country and I am not getting anything. 36.1% of oil and gas reserve in Nigeria is in Akwa Ibom State and I am not getting anything from gas. So, how is it computed? There is something wrong somewhere; it is wrongly computed.

“These are raw data that can be verified anywhere. Now there is another controversy of VAT. All VAT from these IOCs, where are they paying them to? They are not paying them to us. So, there are many things you should look at and develop for the Federal Government. So, VAT from IOCs, from oil and gas should actually go to the states these things are produced,” the governor added.

In his remark, the RMAFC team leader and Federal Commissioner representing Akwa Ibom State, Sunday Ayang, stated that the visit was to sensitize people in the state on the review of sharing formula between the federal, state, and local governments. He noted that stakeholders will send in their inputs to capture grey areas.

According to Ayang, the constitution provides for the exercise to be carried out in five years to further improve revenue among the three tiers of government.

He noted that the team is working towards presenting memoranda before President Muhammadu Buhari for assessment and necessary actions.

COVID-19: NUPENG, PENGASSAN Warn Against Attempts By Oil Companies To Sack Workers

An oil pumpjack operates in Signal Hill, south of Los Angeles, California on April 21, 2020, a day after oil prices dropped to below zero as the oil industry suffers steep falls in benchmark crudes due to the ongoing global coronavirus pandemic. Frederic J. BROWN / AFP.

 

The leadership of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), have said that any attempt by multinational and indigenous Oil and Gas Companies to downsize, sack, or introduce indecent work system on its members would be resisted.

In a joint statement issued on Tuesday, the leadership of the unions stated that they sympathise with the employers over the negative impacts COVID-19 is having on the industry and business operations, but the moves if not properly checked, will further complicate the already impoverished state of Nigerian Oil and Gas Workers.

“The leadership of NUPENGASSAN condemn these moves and vow to resist them with all our might, as the moves are seen as unfair to the selfless and patriotic services of the Nigerian Oil and Gas workers to these Companies and the Nation over these past highly productive years and even when these workers are still fully participating in the frontline of the struggle against the pandemic rendering essential services.

These moves if not properly checked and managed by relevant authorities whose guidelines are being continually disobeyed by these Organisations will further complicate the already impoverished state of Nigerian Oil and Gas Workers, their immediate family and others depending on the workers’ incomes, for a living.”

The unions also called on the Federal Government to “urgently nip these ugly trends in the bud to avoid many untoward and damaging consequences of the actions and reactions.

The statement added that the unions will be forced to carry out an action that will affect the entire industry if the trend is not halted.

“The Federal Government and all its relevant Agencies are further put on notice that NUPENGASSAN might be forced to precipitate an action that will affect drastically the entire industry if this ugly trend is not halted and erring Organisations called to order.

“We earnestly implore these Companies that in the same manner and spirit they are making donations for the fight against COVID-19, they should also spare some kind thoughts for their Workers and strive to keep them alive and on the job so as not to create social upheavals that would be more devastating than the COVID19 pandemic.”

Oil Licences: House Orders CBN, DPR, NNPC To Produce Records Of Payments

House, CBN, DPR, NNPC, Oil LicensesThe House of Representatives has given the Central Bank of Nigeria (CBN) and the Department of Petroleum Resources (DPR) one week to produce records of payments of application fees, signature bonuses and other fees paid by oil companies.

The decision followed a meeting between the House ad-hoc Committee on Oil Prospecting Licenses and Oil Mining Leases and representatives of the different agencies who had been invited to give details of the transactions.

Also present at the hearing on Monday were officials from the Office of the Accountant General of the Federation and some oil companies.

The committee also heard from the Nigerian National Petroleum Corporation (NNPC) on its role in such transactions involving oil companies.

The Chairman of the committee, Representative Gideon Gwani, said they have not received records of accounts where the fees for the oil prospecting licenses and the oil mining leases were lodged.

He stated that the committee was determined to resolve what he said had become a lingering problem in the petroleum sector.

The CBN Deputy Governor in charge of Operations, Mr Adebayo Adelabu, who sought to put things in perspective, explained what was being done to provide the needed records.

SERAP Asks FG To Stand Up To Powerful Oil Companies 

SERAPThe Socio-Economic Rights and Accountability Project (SERAP) is asking the federal government to stand up to powerful oil companies which SERAP alleges have continued to abuse the human rights of the people of the Niger Delta with impunity for decades.

A statement issued by the group says that it is important for President Muhammadu Buhari to implement the ECOWAS court judgment which ordered the Nigerian government to punish oil companies over oil pollution and devastation in the region.

“This government should make sure that the activities of oil companies in Nigeria bring development to the people, rather than a string of needless human rights tragedies.”

SERAP says that the government of former President Goodluck Jonathan ignored the judgment and showed no political will to hold to account, oil companies that have for many years continued to destroy the livelihoods of tens of thousands of people with almost absolute impunity.

Niger Delta Development: Senate Faults Defaulting Oil Companies

Niger DeltaNigeria’s Senate has threatened to do whatever is necessary to ensure that oil companies remit the statutory 3% of their budget to the Niger Delta Development Commission (NDDC) as contained in the NDDC Act.

Federal Lawmakers, at a meeting of the Committee on Niger Delta on Thursday with officials from several oil companies in Nigeria, expressed displeasure that some of the companies failed to remit the statutory contribution to the NDDC.

They also queried why they have also refused to disclose their budgets to the NDDC.

A member of the Committee, Senator Jubrin Barau, said the failure of the companies to obey the law was hampering the development of the region.

 

Labour Minister Meets Oil Companies, Workers Over Labour Issues

Oil companiesThe Minister of Labour and Employment, Dr. Chris Ngige, has advised oil companies to dialogue with their workers to prevent industrial actions and loss of jobs.

The Minister gave the advice at a meeting with oil and gas workers and their employers to resolve petitions from the workers unions on allegations ranging from indiscriminate dismissal of workers to job outsourcing.

This joint meeting followed separate meetings held with the workers, the oil companies and their contractors on the crisis.

Prior to this meeting, the Labour Minister said that he had held separate meetings with the oil companies and their employees over petitions of mistreatment.

According to him, some of the allegations against the oil companies include indiscriminate dismissal of Nigerian workers at the expense of the expatriates.

Some representatives of the oil companies said that the continued fall in the prices of oil is making them take hard decisions to sustain their operations.

“The current business environment of sustained low oil prices requires us to make tough and difficult decisions to sustain the business for a long term.

“Many of the projects we have underway are uneconomic, so our activity level is declining and we are having to make adjustments in the resourcing of our operations and our projects,” said the Managing Director of Chevron Nigeria, Mr Clay Neef.

In spite of the explanation, the workers insisted that the actions of the oil companies are not in harmony with what happens in other African countries.

The President of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), Igwe Achese, made this assertion.

“The oil price drop did not only hit Nigeria alone. It is a global issue and Nigeria is not the only country producing oil in Africa.

“Angola had the same issue and other African countries, those countries are not experiencing the level of job loses that we are experiencing in Nigeria.,” he said.

Oil workers have threatened to go on strike if the issues raised in their petitions, including the alleged indiscriminate dismissal of workers, are not addressed.


Imo Lawmakers Demand 40 Billion Naira Unpaid Oil Rates

oilThe Imo State House of Assembly has passed a bill urging the State Governor, Rochas Okorocha, to demand the immediate payment of outstanding ground rents and other statutory payments, amounting to 40 billion Naira from Oil companies operating in the state since 1978. 

As contained in the bill, the Governor is expected to direct the Chairman of the Board of Internal Revenue in the state to mandate the companies to pay up all outstanding ground rent and other statutory payments owed the since the said period.

It also directed the oil companies to comply and henceforth pay all entitlements due the state as at when due.

While deliberating on a motion moved by the member representing Oguta State Constituency, Honourable Henry Ezediaro, the House decried the continued short-changing of the state by oil companies, stating that the companies have capitalised on the peaceful disposition of the people to deny them of their rights and privileges.

The motion, which was supported by three other House members, maintained that with the present economic challenges facing the nation and its resultant effect on state governments, the House would explore all channels to assist the Executive Arm of Government in generating additional funds, to enable it render services to the people of the state.

The Lawmakers decried the actions and negligence of the plights of their host communities in the area of providing social amenities, stressing that such will no longer be tolerated.

However, a nine-man committee was set up to supervise the debt recovery, interface with the oil companies and report their findings to the House within 60 days.

Tankers Responsible For 30 percent Of Road Accidents – FRSC

The Federal Road Safety Commission (FRSC) has attributed 30 percent of road accidents to tankers while 40 percent of deaths are caused by same.

Corps Marshall, Osita Chidoka made the disclosure while meeting with top officials of the Total group on the challenges posed by oil tankers to lives and property.

Mr Chidoka urged oil companies to take responsibility for their tankers.

He said FRSC is working to reverse this trend where the trucking industry has become a deadly menace on Nigerian roads.

Pirates Kidnap Three In Offshore Bayelsa Attack

Pirates attacked an oil industry supply vessel in Nigerian waters this week and kidnapped three crew members, security sources said on Thursday.

The captain, chief engineer and second engineer were abducted on Monday when gunmen boarded the Malaysia-flagged Armada Tuah 22 around 50 nautical miles (90 km) off the coast of the Brass region in Bayelsa State, three security sources said.

One of the sailors kidnapped was Indonesian, the sources said. The vessel is a tugboat contracted to supply an offshore oil platform. Nigeria’s navy spokesman gave no comment.

A fishing vessel, Orange 7, was attacked on March 2 in a similar position and one of the crew was killed, sources said.

There has been a surge in piracy attacks off the coast of Nigeria this year with gangs showing signs of moving further afield and using more violent tactics.

Oil majors Exxon Mobil and Shell said last month that security was a major factor in making Nigeria one of the most expensive oil-producing countries to operate in.

Oil and shipping companies have to hire crisis management teams, pay higher insurance premiums and face the prospect of ransom payments, as well as brace themselves for damage to their reputations.

The prime suspects for most attacks are Nigerian oil gangs, who already carry out industrial-scale theft of crude oil, known as ‘bunkering’, in the restive onshore Niger Delta swamplands.

Accept higher taxes, Alison-Madueke tells oil companies

The Minister of Petroleum Resources, Diezani Alison-Madueke on Tuesday urged foreign oil companies in Nigeria to accept higher government revenues from crude production outlined in a draft Petroleum Industry Bill (PIB) being debated in National Assembly.

The Minister of Petroleum Resources, Diezani Alison-Madueke

Speaking at an economic summit in Abuja, Mrs Alison-Madueke said fiscal reforms in the proposed PIB, if passed, would be the most comprehensive in four decades.

She described the increased government takes from oil revenues in the PIB as small and said they were fair, given sustained higher oil prices.

“Nigeria is not alone in the tightening of fiscal terms,” she said. “The goal has always been to find a fair balance between the government and the contractors’ shares.”

President Goodluck Jonathan presented the bill to the National Assembly in August and it is still being discussed.

Oil majors have cried out about proposed tax terms in the bill, with Shell and ExxonMobil saying they would make exploration deep offshore, which is the key to growing Nigeria’s reserves, non-viable.

Nigeria’s tax and royalties regimes are complex and often highly secretive. Little is known about existing terms on offshore contracts, but oil majors say the PIB has worse terms than existing ones.

“The government is not in the business of oil and gas to make a loss for the country. At the same time, the intent is to remain competitive to attract investment,” Mrs Alison-Madueke told delegates at the conference.

She has said after the changes were made in the PIB, Nigeria’s “government take” on offshore projects would be around 73 percent, lower than in rival producers Angola, Norway and Indonesia.

“The PIB has been 12 years in the making. If it was such an easy bill, it would have been hashed out a long time ago,” the Minister said.

“I don’t think any position you take on a bill such as this could be perfect … but I think we did a fairly equitable job.”

The PIB’s comprehensive nature — comprising everything including fiscal terms, reform of the state oil company, penalties for environmental infractions and funds for communities living on oil fields — is partly why it has been so hard to agree on.

In a speech, the head of local operator Seplat Petroleum suggested the fiscal regime be hived off from the rest of the bill and quickly passed, to end uncertainty holding back billions of dollars of investment.

Mrs Alison-Madueke said this had been considered and rejected in the drafting of the bill, which would remain comprehensive.

PIB: Good to go or not

A panel of analysts on our breakfast show Sunrise debated whether the latest draft of the Petroleum Industry Bill (PIB) is ready to passed into law or not and divergent views were expressed with calls made for more engagement for the bill.

An energy expert, Mr Zaka Bala claimed the PIB that was recently submitted by the federal government is good to be passed into law however a human right activist; Victoria Ibezim-Ohaeri argued that a whole lot still needs to be reviewed in the latest draft.

According to the Mrs Ibezim-Ohaeri who is the director of Spaces for Change, “a number of issues such as addressing the issue of environmental pollution by oil companies and Petroleum Equalisation Fund were not properly address in the new bill.”

She also alleged that a section of the bill permits the regulator of the sector to accept gifts from the oil companies, noting that this is asking the regulator to open to bribe-taking

The latest draft of the PIB is currently with the National Assembly, where deliberations are on-going ahead of its planned signing to law.

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