Oil: Nigeria Still Being Cheated in PSC Earnings by IOCs, Report Indicates

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By Chineme Okafor in Abuja

A report — the 2017 Benchmarking Exercise — conducted by the Nigeria Natural Resource Charter (NNRC) has disclosed that the current earnings of the Nigerian government from crude oil production sharing contracts (PSCs) it signed with international oil companies (IOCs) operating in her oil fields are amongst the lowest in the world.

The NNRC report also noted that at the moment, the fiscal regime that applies to Nigeria’s production of crude oil was skewed more in favour of the IOCs than to the country which owns the oil, adding that the administration of oil-related taxes in the country were still very complex, thus leaving a lot of loopholes that IOCs leverage to shortchange her.

Presented on Thursday at a workshop organised by NNRC in Abuja, the report looked at a set of precepts that measure how well Nigeria has done in managing her natural resource, in this case oil and gas, for the benefit of its current and future generations of citizens in 2017, and disclosed that not very much had happened to guarantee that industry was progressive.

The NNRC said it was in charge of implementing the Natural Resource Charter (NRC) in Nigeria, and that the charters in the NRC included 12 precepts bordering on legal framework and institutions in the oil industry, transparency and accountability, exploration, licensing and monitoring, taxation and other company payments, as well as the local impacts of oil and gas exploration and production amongst others.

On the precept that has to do with taxation and other company payments, the report stated that: “The fiscal regimes remain unfavourable to Nigeria with the International Oil Companies benefiting more. The taxes in the sector remain complex with multiple agencies saddled with the responsibilities of collecting diverse types of taxes and streams of revenues and the ability of revenue authorities to collect what is due remains in doubt due to inadequate capacity and resources.”

Details later…