N2.6trn Debt: Affected Oil Firms Making Payments to FG, NEITI Reveals

Emmanuel Addeh

The Nigeria Extractives Industries Transparency Initiative (NEITI), yesterday disclosed that some oil companies had started repaying part of the N2.6 trillion debts owed the federal government, following its resolve to disclose the names of the 77 affected entities.

The Executive Secretary of the organisation, Dr Ogbonnaya Orji, who spoke during a media parley in Abuja, stated that NEITI would on March 7, release three additional reports dealing with the oil and gas as well as the mining sectors.

Orji urged the media and the civil society organisations to hold the oil companies accountable to ensure they offset the debts.

In September last year, NEITI revealed that 77 oil and gas companies operating in Nigeria were indebted to the country to the tune of N2.659 trillion, attributable to failure to remit petroleum profit tax, company income tax, education tax, value added tax, withholding tax, royalty and concession on rentals.

At the time, Orji stated that when converted to dollar, the government was being owed $6.48 billion at the time’s official exchange rate of N410.35.

He noted that a breakdown of the figures showed that a total of $143.99 million was owed as petroleum profit taxes, $1.089 billion as company income taxes and $201.69 million as education tax.

But speaking to journalists, NEITI stated that its fundamental responsibility as an organisation was public disclosure, urging the media and non-governmental organisations to take it up from there.

He said: “From our reports, we provided information and data that 77 companies were indebted to government to the tune of N2.6 trillion. We placed that information openly in the public domain.

“The role of the media, the civil society and citizens is to use the information to hold the companies to account. NEITI is ready and available to provide more information and data. But for asking us how far, where is the money?

“NEITI does not collect or keep money. Relevant government agencies do. For taxes such as PPT, CIT and VAT, it is the Federal Inland Revenue Service (FIRS) that collects the them while for royalty payments, Department of Petroleum Resources (DPR) now part of the Nigeria Upstream Petroleum Regulatory Commission (NURPC) collects the payments.

“NEITI is also aware that following the public disclosure, many companies have been rushing to the relevant government agencies to either pay up or ascertain the status of their liabilities.

“This is our impact on revenue generation for the government. However, our 2020 report to be released on the 7th of March will provide updates. I am in no position to speculate,” he explained.

Orji added that NEITI was highly encouraged that the House of Representatives rose to the occasion; tabled the issue as a motion, passed it and set up an adhoc committee to investigate the issue.

According to him, a public hearing on the disclosure from NEITI will begin in the coming days, applauding the house leadership and the members for their role in the investigation.

On the current scarcity of petrol, Orji noted that the it was just a mere symptom, while subsidy is the main disease.

He stated that oil theft poses a huge problem that is currently impacting very negatively and seriously especially on Nigeria’s downstream and midstream operations.

He pointed out that many International Oil Companies (IOCs) and big firms are gradually divesting in the downstream sector because the problems of oil theft, vandalism, and deliberate sabotage have been quite difficult to manage.

“This is in spite of the efforts by various security agencies to secure these huge investments. Many that can afford it, because it is very capital intensive, are moving into upstream.

“And that’s why you see revenues from Production Sharing Contracts (PSCs) outstripping returns from Joint Ventures (JVs). Let me tell you from our reports in the last five years (2015 – 2019), Nigeria has lost about 260.15mmbbls to crude theft.

“NEITI, as part of our monitoring functions, is reviewing the situation very critically and will soon be sending our policy advice on this to the government. Our board is already discussing the implications as well as possible short, medium and long term interventions. But for us, it is an issue of major concern,” he stated.

Furthermore, Orji noted that in the last one year, NEITI had signed series of Memoranda of Understanding (MoUs) with anti-corruption agencies, revealing that the body is now set to activate the MoUs once the release of the 2020 reports next week is concluded.

“ The time has now come, and going forward it will ever remain active because it is very essential to sustain compliance, sanctions and even incentives,” he noted.