NEITI exposes staggering $8.264 billion unsettled debt in oil, gas sector

In a revelation of paramount significance, the Nigerian Extractives Industries Transparency Initiative (NEITI) announced that the total outstanding financial liabilities in the oil and gas sector owed to the Federation amounted to a substantial $8.264 billion.

Within this staggering sum, a notable portion of $13.591 million was earmarked as revenues payable to the Federal Inland Revenue Service (FIRS).

NEITI delivered this crucial information during the unveiling of the 2021 oil and gas industry reports on September 18.

The report went on to highlight that as of July 31, 2023, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) held outstanding tax collectable revenues amounting to $8.251 billion, a figure that was accurate as of December 31, 2022.

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Alarmingly, over 80% of this substantial sum is attributed to the Nigerian National Petroleum Company Limited (NNPCL), underlining the significant weight of responsibility on this entity.

In an extensive and meticulous reconciliation effort, the report covered 69 companies’ payments, 13 government agencies, NNPCL, Nigeria LNG, and Nigeria Sao Tome Joint Development Authority.

This comprehensive approach encompassed 23 revenue streams. Noteworthy was the disclosure that Lekoil Limited made a payment exceeding $7.76 million, despite failing to submit any reconciliation information.

Dr. Ogbonnaya Orji, the Executive Secretary of NEITI, underscored the report’s pivotal role in assisting governments at all levels to bolster revenue streams, furthering national development and poverty reduction through robust resource mobilization efforts.

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The data unveiled in this report emerges as a critical tool in steering the nation towards sound financial strategies and responsible resource management.

During the event held in Abuja, the Chairman of the House Committee on Petroleum Resources, (Downstream) Hon. Ikeagwuonu Ugochinyere (Ikenga Imo) said:

“I believe that this year’s report will no doubt enhance the economic fortunes of Nigeria and increase her revenue generation from both oil and non-oil sectors, for national development”.

Meanwhile, the Chairman Senate Committee on Petroleum Upstream Sen. Eteng Williams also commended the vital role NEITI is playing in Nigeria’s extractive sector and urged NEITI to continue to be at the forefront of the oil and gas sector to ensure adequate revenue streams for the country now that subsidy has gone.

NEITI also called for a thorough audit of PMS subsidy-related financial transactions between the NNPCL and the Federation to clarify liabilities and validate data.

According to the NEITI report, there was a decline in crude oil losses in the highlighted year attributed to theft and sabotage, registering a reduction from 39.08 million barrels in the year 2020 to 37.57 million barrels in the subsequent year, 2021.

This numerical downturn, however, is profoundly interlinked with a notable reduction in crude oil production during that time frame, impacting a total of 29 companies operating within the sector.

According to the NEITI report, in 2021, Nigeria raked in a total of $23.046 billion from the extractive sector, marking a 13% increase compared to the $20.43 billion earned in 2020.