The House of Representatives ad hoc committee investigating revenue leakages in the Department of Petroleum Resources (DPR) at the weekend said about N6 trillion from gas sales and royalties is yet to be remitted to the Consolidated Revenue Fund by oil majors operating in the country.
According to the committee Chairman, Jarigbe Agom Jarigbe (PDP, Cross River) the leakages were the result of the faulty Production Sharing Contract (PSC), which gives room for the oil firms to fleece Nigeria of billions of naira revenue.
Specifically, he said the committee uncovered over US$8 billion unremitted accrual from gas sales by Total Oil & Gas Limited between 2007 and 2017; US$170 million by Mobil; US$34 million by Neconde; among others.
“The Production Sharing Contracts (PSC) is faulty and does not provide for the remittance of the proceeds from gas sales. It gives room for most of the oil companies to fleece our revenues.
In the Bonga Field, Total alone has over US$8 billion unremitted gas sales to the Consolidated Revenue Fund between 2007 and 2017. Mobil owes over
US$170m on gas sales from Bonny Terminal; Neconde owes about $34 million in royalty,” the chairman stated.
He also said records from the Central Bank of Nigeria (CBN), JP Morgan, signature bonuses, concession rentals, crude oil, gas and flaring royalties, revealed that Sterling Global Oil Resources Ltd, has no evidence of payment of crude oil and gas sales, despite operating in the upstream sector of the oil industry.
The lawmaker equally frowned at the level of impunity by the oil majors and other actors in the oil industry, and called for total overhaul of the PSC.
As a result, he added, the ad hoc committee has summoned the management of five oil firms namely; Sterling Global Oil Resources Ltd, Neconde Energy Ltd, ND Western Limited, Newcross E & P and Allied Energy Ltd., to provide their evidence of payment of royalties.
“We think all the funds have to be remitted to the Consolidated Revenue Fund. So, we have asked NNPC and DPR to make their submissions to the committee.
I can confirm to you that if we get the fund, the Federal Government will borrow less to finance the deficit budget,” Jarigbe said.
Responding to questions on the non-enforcement of extant laws regulating the oil industry, the lawmaker said there are sanctions such as suspension of export permits, but that there must be political will by the executive to enforce them.