Unremitted Revenue Rises to $9.85bn – NEITI 2021 Oil,Gas Report

...says industry generated over $23bn in revenue  … $13.2 bn remitted to the federation account ….80% of the financial liabilities are owed by the NNPCL

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The total unremitted revenues to the Federation by some relevant government agencies and companies in the oil and gas sector in the year 2021 have risen to over $9.85 billion.

 

This is contained in the 2021 Oil and Gas Industry Report just released by the Nigeria Extractive Industries Transparency Initiative (NEITI). The report also showed that the oil and gas industry generated over $23 billion in 2021.

 

Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji while presenting the highlights of the report stated that the information and data contained in the NEITI latest reports paid special attention to helping the government at all levels to shore up revenue, support national development and poverty reduction through resource mobilisation. The report therefore provided updates on the financial liabilities of the Nigerian National Petroleum Corporation Limited (NNPCL) and some companies to the federation.

 

He lamented that despite the concerted efforts made last year to recover some of the revenues through the Ad Hoc Committee that was set up by the National Assembly, the 2021 figures showed an increase.

 

A compilation of the outstanding financial liabilities due to the Federation by the report indicated that a total of $13.591 billion  revenues was payable to the Federal Inland Revenue Service (FIRS) as of July 31, 2023, while the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had outstanding tax collectible revenues of $8.251 billion as at December 31, 2022. Over 80 percent  of these outstanding financial liabilities are owed by NNPCL

 

According to Ogbonnaya Orji, the revenue sources included sales of federation crude oil and gas, taxes, royalties, concession rental, gas flare penalty, bonus and license fees, and transportation fees.

 

He said that the total revenue was also generated through dividends from NLNG, NDDC levy, NCDMB levy, Ness fee, and miscellaneous income.

 

According to the NEITI boss, a total of $13.2 billion dollars was remitted from the sum to the federation account.

 

He said that the Nigeria National Petroleum Corporation, before its transition failed to remit about $2 billion to the federation account and a total of $6.9 billion was deducted at FAAC.

 

Ogbonnaya-Orji said that while oil production for the year under review stood at about 566,129 million barrels per day, gas production came at over 2,743,700 million standard cubic feet per day.

 

He said that the sector contributed a total of 7.2 per cent to the nation’s Gross Domestic Product (GDP) in 2021 with export contribution of 76.2 per cent.

 

The executive secretary said that the Federal Government paid about $3.087 billion in cash calls as equity contributions while the outstanding cash-call liabilities payable by the federation stood at about N330.007 billion.

 

On data of Beneficial Owners (BO) of Assets, Ogbonnaya-Orji said that about 69 companies were covered in the production of the report and have disclosed some BO information through NEITI or CAC portal except four companies.

 

On subsidy, the NEITI boss said about $1,159 trillion was paid by the government as subsidy between March to December 2021.

 

“NEITI audits revealed that between 2006 and 2021, a total of N8.149 trillion has so far been expended on petroleum subsidy, now referred to as under-recovery,’ he said.

 

On recommendations, he said that based on the outstanding liabilities payable to FIRS and NUPRC, the NNPC and NPCD should be investigated while other companies should promptly pay their liabilities.

 

Ogbonnaya-Orji said the report also recommended that a special investigation be instituted to establish the status of the  non-operational refineries and value for money assessment on the refineries should be carried out.

 

He further reiterated the need to strengthen remediation mechanisms and involve independent third parties to conduct detailed investigations when necessary among other recommendations.

 

Earlier, stakeholders in the oil and gas sector commended NEITI on efforts towards ensuring transparency and accountability in the industry.

 

Representing the Secretary to Government of the Federation, George Akume, his Permanent Secretary on Political and Economic Affairs, Esuabana Nko-Asanye, reiterated the importance of the report to economic development.

 

Akume reaffirmed the Federal Government’s commitment to support and deepen the implementation of the EITI in Nigeria.

 

He then restated the need for security issues especially in the Niger/Delta to be tackled to reduce losses in the sector.

 

The Group Managing Director of NNPCL, Mele Kyari, represented by his Chief Compliance Officer, Nasir Usman, pledged the unreserved support of NNPCL to NEITI to enable it achieve its mandate.

 

Representing the Minister, Budget and Economic Planning, his Permanent Secretary, Nebolisa Anako, stated the importance of data for economic planning.

 

He then reiterated the commitment of the government to the mandate of NEITI as the oil and gas sector was one of the major sources of foreign exchange for the nation.

 

The Chairman, House Committee on Petroleum, Hon. Ikenga Ugochinyere, called for the need to amend the NEITI Act and urged for more government allocation to the initiative to enable it better carry out its mandate.

 

Ugochinyere also pledged the commitment of the House to work towards the implementation of the report that was unveiled today.

 

Similarly, the Chairmen Senate Committee on Petroleum Upstream, Etang Williams and the Senate Committee on Oil and Gas Host Communities, Benson Agadaga also expressed commitment to stand by NEITI in implementing recommendations of the report.

 

The unveiling of the 2021 report was attended by various stakeholders and partners in the oil and gas sector in the country. 

 

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