Senate sets up 7-man adhoc C’ttee to probe N1.2trn oil revenue loss

By Musa Baba Adamu

The Senate on Tuesday constituted a seven-man Adhoc committee to investigate a N1.2 trillion oil revenue loss to the Federal Government owing to a breach by SINOPEC ADDAX Petroleum.
The adhoc Committee which is chaired by Senator Aliyu Sabi Abdullahi (APC – Niger North) has six other members which include: Gershom Bassey; Biodun Olujimi; Ahmad Baba Kaita; Jubril Isah; Michael Nnachi; Clifford Ordia; and Haliru Jika.
The decision to investigate the revenue loss due to the Federal Government was conveyed in a resolution by the Upper Chamber after it considered a motion sponsored by Senator Gershom Bassey (PDP – Cross River South).
Bassey in his motion noted that in 2000/2001, the Federal Government had provided a Fiscal Incentive Package to Addax Petroleum Company that saw the reduction of the company’s Petroleum Profit Tax from 85 percent in the 1998 Production Sharing Contract (PSC) to 60 percent in the 2001 Fiscal Incentive Package; and the companies share of oil lifting increase from about 45 percent to 56 percent.
According to the lawmaker, Addax Petroleum followed through by investing to grow production from about 10,000bopb in 2000 to over 100,000bopd by 2008.
He noted that after the purchase of Addax Petroleum by Sinopec in 2009, “the assets have witnessed significant production decline due to poor investment decisions making production levels to fall presently to approximately 30,000bopb with no developed gas.”
Bassey observed that, “Sinopec Addax despite holding a 100 percent Production Sharing Contract (PSC) with oil mining leases OML-123, OML-124, OML-126 has refused to stick to its end of the bargain to continue investing in the operated assets leading to a revenue loss of about $3.55 billion per year by the Nigerian Government.”
The lawmaker further observed that, “in the fourth quarter of 2018, the lack of competent operations by Sinopec-Addax made five Nigerians General Managers and their deputies to exit the company voluntarily.