As Reps begin probe of $6.479bn debts owed by oil companies
By Christiana Ekpa
The Director General/Chief Executive of National Oil Spill Detection and Response Agency (NOSDRA), Idris Musa, on Tuesday, told the House of Representatives Committee that Nigeria loses about $7.733 billion due to emission reduction charges.
This was just as the House began investigation into over $6.479 billion debts owed Federal Government by oil and gas companies operating in the country.
As contained in the Nigeria Extractive Industries Transparency Initiative (NEITI) reports, the total outstanding liabilities of $638.090 million recorded in 2017 was due to DPR; while from the total outstanding liabilities of $6.207 billion recorded in 2018, the sum of $3.849 billion was due to DPR while $2.358 billion was due to FIRS.
In the 2019 NEITI report, the total outstanding liability stood at $6.479 billion out of which $5.002 billion was due to DPR while $1.477 billion was due to FIRS. In the same vein, the debt profile as of 31st December, 2020 stood at $3.171 billion out of which $3.094 billion was due to DPR while $77.097 million was due to FIRS.
For 2021, the status of the liabilities showed that $73.097 million was outstanding as of 30th September, 2021, with a Grand Total of $1,964,036,289.54 and 1,969,795.92 pounds owed by 84 oil companies operating in the country.
Speaking during the investigative hearing into the debts owed by the oil companies, Director General/Chief Executive of National Oil Spill Detection and Response Agency (NOSDRA), Idris Musa averred that Nigeria loses about $7.733 billion due to emission reduction charges, based on natural gas unit rate from US Energy Information Administration on the United States Natural Gas Industrial Price (in dollar per thousand cubic feet).
“According to the Gas Flare Tracker (GFT), Nigeria flared 1.1 billion Mscf. This amounts to a loss of about 2.2 billion dollars to the Nigerian economy for the period under review. Based on the National Gas Flare Commercialization Programme launched December 13, 2016, all gas flare points have been taken over by the Federal Government and are to be sold by Nigerian Upstream Petroleum Regulatory Commission (NUPRC). The programme waived penalties, as flared gas is now owned by the Federal Government rather than operators.”
He added that NOSDRA imposed a fine of $3.6 billion on Shell Nigeria Exploration and Production Company (SNEPCO) Bonga Oil Spill of December 2011 where 40,000 barrels of crude oil were spilt into the marine environment before the spill could be combated but noted the company appealed and the case is still ongoing.
Meanwhile, the FIRS record on the status of the money recovered from 38 oil companies as of 31st January, 2022 stands at $512,602,086.12 while NPDC records showed a total sum of $392,613.105.88, with a Grand Total of $905,215,192, while total outstanding liability was put at $467,691,568.67.
According to some documents submitted to the Committee, President Muhammadu Buhari approved a 50% waiver of a total sum of $880.139 million for Nigerian Petroleum Development Company (NPDC) in line with the special request made by the NNPC Group Managing Director, Mele Kyari.
President Buhari’s approval was conveyed via a letter with Ref. No: PRES/158/NNPC/85/87/MF/204 dated 9th July, 2021 signed by the Chief of Staff to the President, Professor Ibrahim Gambari, and addressed to the NNPC GMG and Minister of Finance, Budget and National Planning.
The approval was conveyed on the same day the NNPC Managing Director, Mele Kyari sent the 5-page letter titled: Special request for a waiver of fifty per cent (50%) outstanding of outstanding tax liabilities of the Nigerian Petroleum Development Company (NPDC)’, through which he urged “Mr President to kindly direct the Honourable Minister of Finance, Budget and National Planning to mandate the Federal Inland Revenue Service (FIRS) to i9mplement the above approval as provided in Sections 23(2) and 89 of the Corporate and Allied Matters Act (CITA) as amended.”
