TheCitizen - It's all about you
  • Home
  • Headlines
  • Latest News
  • Governance
  • Business
  • Financial Crimes
  • Opinion
  • Editorials
No Result
View All Result
  • Home
  • Headlines
  • Latest News
  • Governance
  • Business
  • Financial Crimes
  • Opinion
  • Editorials
No Result
View All Result
TheCitizen - It's all about you
No Result
View All Result

‘How major oil, gas firms defraud govt of revenues’ – Report

The Citizen by The Citizen
June 10 2014
in Headlines, Uncategorized
A A
0

Indigenous and multinational companies operating in the oil and gas sector may continue to defraud the Federal Government of petroleum revenues. Yet the detail of this loss is shrouded in secrecy.

The exact amount owed the government in royalties, rents, taxes, signature bonuses and concessions by oil companies remains closely guarded information, The Guardian investigation has revealed.

This trend does not only explain why corruption thrives in the nation’s oil and gas industry, it highlights in a striking way how key public institutions conceive the right to know of the Nigerian public.

FOIA as a paper tiger

The agencies responsible for the collection of oil revenues on behalf of the government, and subsequently for the dissemination of information about such receipts and the outstanding payments, hold tight control on the information even in defiance to the existing law on the free dissemination of public interest information.

Section 2 (1) of the Freedom of Information bill signed into law in May 28 2011 by President Goodluck Jonathan states that a public institution shall ensure that, it records and keeps information about all its activities, operations and business.

Section 2(4) states further that, the public institution shall ensure that such information is widely disseminated and made readily available to members of the public through various means, including print, electronic and online sources, and at the offices of such public institution.

But the disregard for the provision of this section of FOIA is evident in the manner petroleum revenue-collecting agencies such as NNPC, DPR and FIRS; handle access to information at their disposal.

For starter, the details of Federal Government’s earnings on petroleum as well as outstanding payments due to the government are not found on the websites of these government parastatals.

And the officials of those parastatals including their spokespersons are hardly well disposed to provide information.

The Ribadu report

Though the 2012 report of the Petroleum Revenue Special Task Force (PRSTF) headed by Malam Nuhu Ribadu attempted to throw light on the processes of the transaction in the petroleum industry and ascertain debts owed Nigeria by oil and gas companies, the implementation of that report remains stalled till date.

The implementation is sidestepped, according to the presidency, because of the flawed processes that produced the report.  Some of the data used in producing the report “could not be independently verified,” said   the Senior Special Assistant to the President on Public Affairs, Dr. Doyin Okupe.

Notwithstanding, the Ribadu-led Task Force has disclosed that over 47 companies are allegedly indebted to the nation to the tune of several billion of dollars.

The report, for example, states that 67 oil block licences were awarded between January 2005 and December 2011, with an outstanding balance of $566 million unpaid in signature bonuses. And for the discretionary allocation of oil blocks reviewed by the Task Force, $183 million remains the outstanding payment.

On concession rentals, the report said that about $2.9 million was yet to be paid into the government coffers, while $3.027 was outstanding from the operators for crude oil royalties as at December 31, 2011 among other outstanding ones.

NEITI’s Audit report

Part of the observation of the Task Force indicates that DPR was unable to collect the debt of $58 million representing the penalty for gas flaring as at the time of the report.

The “lack of verification” of these figures, as the Presidency argued, may have foisted credibility crisis on the Ribadu report, but the audit report of oil and gas industry between 2009 and 2011 published in June 2013 by Nigeria Extractive Industries Transparency Initiative (NEITI) has also shown that oil and gas companies are indebted to Nigerian government to the tune of $9.6 billion, out of which only $2.4 billion has been recovered into the Federation Account.

In his e-mail correspondence with The Guardian, the NEITI Director of Communication, Dr. Orji Ogbonnaya said, “From NEITI comprehensive independent audits of oil and gas sector, a total sum of $9.6 billion was identified as debt owed by companies and potential revenue to the Federation.

“This debt was as a result of under-assessment, under-payment and variance between what companies pay and what government received in form of royalties, taxes, signature bonuses, levies and sales of equity crude.”

He said though NEITI has been working with the relevant government agencies to ensure that this fund is recovered into the Federation Account, only about $2.4 billion has been so far recovered into the Federation Account from this debt.

With this figure, the outstanding debt payment due to Federal Government stands at $6.2 billion. This amount represents more than 20 per cent of the 2014 national budget. The amount indeed can offset Nigeria’s N577 billion debts in 2013 with a balance of N466 billion left in the coffers.

Orji, however, admitted that NEITI’s assessment does not capture the identities of the companies owing the country.

“For now, the structure of NEITI audit reports does not reflect company by company payments, as such the questions of how many companies owe Nigeria and how much they are owing cannot be answered. But subsequently, NEITI hopes to disaggregate its audit to capture the issue of company by company payments.”

The Guardian therefore attempted to speak to other relevant agencies in the oil and gas industry, asking questions around how much is being recovered lately into the government’s treasury, and which organisation still owes the government since the period covered in the report.

The Guardian sought information from the Department Petroleum Resources (DPR) which is empowered by the Petroleum Act of 1969 as amended, to collect royalties on producing concessions on behalf of the Federal Government of Nigeria. Monies so collected are paid into a designated Royalty account with the Central Bank of Nigeria (CBN) and credited to the Federation account on monthly basis.

In addition, the Department collects rents accruing to the Federal Government from awarded concession on yearly basis and pays same into a designated Federal Government account with the CBN.

Officials stonewalling

When approached, the spokesperson for DPR, Mr. Paul Osu advised The Guardian to submit a letter of request in order to be able to access the Department’s records and to be able to speak to the director. The letter was submitted on April 30 at the DPR office, at No 7, Kofo Abayomi Lagos. Osu then promised that DPR would respond to the request shortly.   “We will revert to you as soon as possible with our feedback,” he said.  When there was no response, another reminder was sent on June 3 to Osu. His terse response again was: “Please we will get back to you as soon as information requested is available”. The response never came till the time of this publication.

Meanwhile, a source at DPR, said information about earnings from oil and gas is often treated as confidential matter at the Department.

When similar questions were posed to the NNPC’s Group General Manager, Mr. Ohi Alegbe, he rather directed a junior officer who identified himself as Michael to relate with The Guardian reporter.

The questions sent to Alegbe reads thus:

• How much is NNPC owed by the major marketers of petroleum products at the moment in term of the sales including current debt, total overdue, disputed debt and total debt outstanding?

• Why does Nigeria sell 100 per cent of its crude to private commodities traders instead of selling directly to refineries as alleged by Ribadu and NEITI reports?

Michael responded thus on May 5: “Seen. Will revert”.  When he was reminded on May 7, he responded: “Ok”. And that was the last word from Michael, for subsequent reminder was probably ignored or escaped his attention.

A check on the NNPC website also did not provide relevant information to ascertain the Federal Government earnings from oil. Even the publication on the oil and gas sector activities provided on the site was issued with a caveat. It reads thus:  “This publication presents information on the oil and gas industry. Its content reflects individual as well as general analysis and trend of activities that characterised the industry within the country. Although NNPC endeavours to ensure accuracy of information in these documents, it cannot guarantee 100 per cent accuracy nor can it be held liable for errors that may occur.   Users are to note that use of any information herein is purely at their discretion.”

It is little surprise then that NNPC is being judged one of the world’s most closed oil and gas companies. A joint report by Transparency International, a Berlin-based anti-corruption monitor, and the Revenue Watch Institute in New York judged the NNPC to have the worst record of 44 national and foreign companies it examined. A recent external audit said it was “accountable to no one.”

FIRS was the last office visited by The Guardian. This agency collects the petroleum profit tax on behalf of the Federal Government of Nigeria. The tax constitutes revenues accruing to the Federal Government from penalties imposed on oil companies for gas flaring. The penalty is intended to serve as a deterrent to routine gas flaring.

When The Guardian called on their regional office on Lagos Island, a desk officer who did not want his name mentioned because he was not authorised to speak, advised The Guardian reporter to stop wasting his time, because trying to find out the amount owed Nigeria in Petroleum Tax from FIRS is a task that would not produce result. “Nobody here will be willing to speak on that subject. Such information is confidential,” he declared.    Notwithstanding, he requested that a letter of request be written and addressed to the regional coordinator. The letter was submitted on May 2, 2014 but no response came forth till the time of this publication.

In the 2012 annual compliance reports on FOIA provided by the Attorney General of the Federation and submitted to a human right group, Right To Know (R2K), the finding shows that of all the ministries, departments and agencies in Nigeria, only 23 submitted annual compliance reports, neither NNPC, DPR nor FIRS is included in the list. It is not unlikely that these agencies would still be missing on the 2014 annual report when it is published.

Culled from The Guardian. This report is supported and funded by Wole Soyinka Centre for Investigative Journalism (WSCIJ).

Previous Post

New Kano Emir gets appointment letter, staff of office

Next Post

NCC vows to ensure high quality telecoms services

Related Posts

Nigerian soldiers now earn N100,000 monthly, says Defence Minister
Headlines

FG denies rumours of Defence Minister’s alleged resignation

July 21 2026
Senate bans preaching, hawking in commercial buses, approves N50,000 fine
Headlines

Senate bans preaching, hawking in commercial buses, approves N50,000 fine

July 17 2026
Tinubu to launch AU combined maritime task force for Gulf of Guinea
Headlines

Tinubu to attend UN General Assembly in September

July 16 2026
Reps in rowdy session over motion to summon Tinubu
Governance

Reps withdraw own state police bill, consider Tinubu’s proposal

July 15 2026
Police confirm arrest of embattled ‘fake’ agency DG
Headlines

Police confirm arrest of embattled ‘fake’ agency DG

July 15 2026
FG suspends WAEC, NECO fees hike
Headlines

FG suspends WAEC, NECO fees hike

July 14 2026
Next Post

NCC vows to ensure high quality telecoms services

Imo bans political campaign posters

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

FROM THE GRASSROOTS

Sokoto LG chairman quits APC, resigns from office

Sokoto LG chairman quits APC, resigns from office

by The Editor
July 8 2026
0

...

Bauchi Electoral Commission fixes August 17 for LG election

Bauchi Electoral Commission fixes August 17 for LG election

by The Editor
June 19 2026
0

...

Court grants indigenous status to Hausas born in Jos North

Court grants indigenous status to Hausas born in Jos North

by The Editor
June 11 2026
0

...

42-year-old Sheikh Dasuki emerges Chief Imam of Ilorin

42-year-old Sheikh Dasuki emerges Chief Imam of Ilorin

by The Editor
June 11 2026
0

...

APPOINTMENTS

Tinubu appoints Fayose REA chairman, names 25 others

Tinubu appoints Fayose REA chairman, names 25 others

by The Editor
July 20 2026
0

...

Tony Elumelu to step down as UBA chair, bank names successor

Tony Elumelu to step down as UBA chair, bank names successor

by The Editor
July 6 2026
0

...

Sahara Group appoints Folake Soetan as Arahas MD to drive oilfield services transformation across Africa

Sahara Group appoints Folake Soetan as Arahas MD to drive oilfield services transformation across Africa

by The Editor
July 3 2026
0

...

Tinubu appoints new NUC chairman

Tinubu appoints new NUC chairman

by The Editor
June 23 2026
0

...

ODDITIES

75-year-old man bags 10 years jail for defiling minor

75-year-old man bags 10 years jail for defiling minor

by The Editor
July 16 2026
0

Court remands blogger over defamation of Soludo, son

Court remands blogger over defamation of Soludo, son

by The Editor
July 13 2026
0

My mother trained me selling akara, bananas – Tinubu’s aide backs First Lady’s remarks

My mother trained me selling akara, bananas – Tinubu’s aide backs First Lady’s remarks

by The Editor
June 28 2026
0

GLOBAL NEWS

Xenophobia: Nigerian students funded your freedom – Shettima reminds South Africa

Xenophobia: Nigerian students funded your freedom – Shettima reminds South Africa

by The Editor
July 21 2026
0

...

US Congress okays bill to cut foreign aid to Nigeria

US Congress okays bill to cut foreign aid to Nigeria

by The Editor
July 17 2026
0

...

Nine European countries, Ukraine form defence coalition

Nine European countries, Ukraine form defence coalition

by The Editor
July 14 2026
0

...

Putin orders Russian nuclear forces on high alert

EU, UK hit Russia with joint sanctions over cyber attacks

by The Editor
July 14 2026
0

...

Reps in rowdy session over motion to summon Tinubu

Xenophobic attacks: Reps reject calls to suspend ties with South Africa

by The Editor
July 10 2026
0

...

State of the States

Lagos blames heavy rainfall for worsening road conditions

Lagos blames heavy rainfall for worsening road conditions

by The Editor
July 17 2026
0

...

Kogi govt confirms rescue of abducted principal, NECO official, two students

Kogi govt confirms rescue of abducted principal, NECO official, two students

by The Editor
July 17 2026
0

...

Anambra agency cracks down on illegal street trading, shanties in markets

Anambra agency cracks down on illegal street trading, shanties in markets

by The Editor
July 14 2026
0

...

Plateau Assembly moves to provide pensions for ex-lawmakers

Plateau Assembly moves to provide pensions for ex-lawmakers

by The Editor
July 10 2026
0

...

Plugin Install : Widget Tab Post needs JNews - View Counter to be installed
  • Trending
  • Comments
  • Latest
FG mulls structures demolition for Lagos Coastal Highway service lanes, flood control

PFIPC scandal: How CBN opened domiciliary accounts for phantom agency

July 21 2026
Xenophobia: Nigerian students funded your freedom – Shettima reminds South Africa

Xenophobia: Nigerian students funded your freedom – Shettima reminds South Africa

July 21 2026
Ex-transport minister Rotimi Amaechi’s mother dies at 89

Ex-transport minister Rotimi Amaechi’s mother dies at 89

July 21 2026
Nigerian soldiers now earn N100,000 monthly, says Defence Minister

FG denies rumours of Defence Minister’s alleged resignation

July 21 2026

EDITORIAL REVIEW

Duty waivers must not become a fiscal hole – Punch

Duty waivers must not become a fiscal hole – Punch

by The Editor
July 20 2026
0

State airports: White elephant epidemic – Punch

State airports: White elephant epidemic – Punch

by The Editor
July 17 2026
0

Jega resonates loudly on Electoral Act underbelly – Punch

Jega resonates loudly on Electoral Act underbelly – Punch

by The Editor
July 14 2026
0

Almajiri Commission: Stop this budgeting absurdity – Punch

Almajiri Commission: Stop this budgeting absurdity – Punch

by The Editor
July 13 2026
0

Boko Haram destroyed over 500,000 houses in North-East – Agency

Deadly toll of living with terrorism – Punch

by The Editor
July 9 2026
0

Opinion

Remi Tinubu under fire over akara, roasted corn remarks

Beyond ‘akara’ leadership

by The Editor
July 6 2026
0

...

Trump’s U-turn on Iran war ends Israel’s Middle East dream

Trump’s U-turn on Iran war ends Israel’s Middle East dream

by The Editor
June 17 2026
0

...

Terrorists kidnap Army Major General, wife in Katsina

Slain General: When the protectors need protection

by The Editor
June 17 2026
0

...

Bandits attack mosque, kill 1, abduct 9 in Kaduna

When terrorism becomes the talk of town

by The Editor
June 9 2026
0

...

Plugin Install : Popular Post Widget need JNews - View Counter to be installed
  • Home
  • Headlines
  • Latest News
  • Governance
  • Business
  • Financial Crimes
  • Opinion
  • Editorials

© 2026 TheCitizen Ng. All Rights Reserved.

No Result
View All Result
  • Home
  • Headlines
  • Latest News
  • Governance
  • Business
  • Financial Crimes
  • Opinion
  • Editorials

© 2026 TheCitizen Ng. All Rights Reserved.