Oil majors fail to remit billions of naira - Reps panel

A House of Representatives adhoc panel yesterday said it has uncovered how some international oil companies (IOCs) cut corners to short-change the Nigerian government of billions of naira.

The IOCs, it was discovered have been carrying out certain aspects of oil businesses without meeting their financial obligations to the Nigerian government.

Such under-hand dealings, the panel further uncovered, were carried out with the tacit support of some government officials.

The panel, constituted by the House, is investigating alleged over N6 trillion revenue leakages in the oil and gas sector and the activities of the Department of Petroleum Resources (DPR) and the IOCs. It is chaired by Jarigbe Agom Jarigbe (PDP, C/River).

At an investigative hearing yesterday in Abuja, the panel found wanting companies such as Exxon Mobil, Nigerian Agip Oil Company (NAOC), Shell Petroleum Company Limited (SPDC), Total Nigeria as well as the Nigerian Petroleum Development Company (SPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC).

The total amount the oil companies were to remit into government coffers amounted to billions of naira, the lawmakers said.

From its interaction with officials of Exxon Mobil, the panel discovered that the oil giant has been carrying out transfer of gas to liquid (TGTL) operations and enjoying other derivatives without licence.

Responding to a question, an executive director in Exxon Mobil, Segun Banwo, told the lawmakers that the oil firm enjoys a fiscal incentive as a result of the provision of the Petroleum Profit Tax Act.

When the lawmakers sought to know if Exxon Mobil has the licence to perform such operation and enjoy the said fiscal incentive, a DPR official, Olawole Ogunsola, said the oil giant has no such licence, amounting to a breach.

The panel also discovered that Agip Oil, operating since 2005, only opened an escrow account last week, with the lawmakers saying the oil firm has not been remitting anything to the government for over 12 years.

The lawmakers said this was in violation of the Production Sharing Contract (PSC) and demanded for all details and evidence of payment from the company.

Lawmaker equally discovered that Total has been paying royalties from crude products based on realizable price instead of the fiscal price set by the DPR.

Total was also found to be taking gas from Nacol Gas Field and selling to NLNG when it is not part of the Joint Venture agreement.