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Oil, gas coys owe federation accounts N1.32trn in 2020, says NEITI

The Nigeria Extractive Industries Transparency Initiative (NEITI), has put 51 oil and gas companies liabilities to the Federation Accounts as at December 31, 2020 at N1.32 trillion.

The Executive Secretary, NEITI, Dr Orji Ogbonnaya Orji, made this known yesterday in Abuja, at the public presentation of reports on Oil, Gas and Mining as well as Fiscal Allocation and Statutory Disbursement.

Orji, while providing highlights on the 2020 oil and gas reports, said the number of defaulting companies dropped from 77 in 2019 to 51 in 2020.

The NEITI scribe described the current debt as collectable revenues that were due to the Federation Accounts by the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), and the Federal Inland Revenue Service (FIRS).

The latest report also outlined the specific revenue streams that accounted for the liabilities in question, including royalty oil, royalty gas, concession rentals, and petroleum profit tax.

Others are company income tax, value added tax, and withholding tax, and a host of others.

He explained that the disclosure of companies’ liabilities by NEITI was in line with its mandate and in fulfilment of its obligation as member of the global Extractive Industries Transparency Initiative (EITI), and not in any way against the companies.

Orji said the report revealed that Nigeria earned $20.43 billion from the sector in 2020, adding that the figure represented a decline of 40% compared to the $34.22 billion realised in 2019.

“On remittances to the Federation Accounts from the sector, the report also disclosed that $14.65 billion, representing 71.17% of total earnings in 2020 was remitted to the accounts, while total aggregate financial flows from the sector to the government in 10 years (2011-2020) was $394.029 billion,” he stated.

He also said the total crude oil production in 2020 was 646.7 million barrels (mmbbls) representing a 12% decrease from the 735.24mmbbls produced in 2019.

Out of the total production, he noted that 648.48mmbbls were lifted or 11.85% lower than the 735.66mmbbls lifted in 2019.

The report also showed that the oil and gas sector contributed only 8.16% to the total Gross Domestic Product (GDP) in 2020. This represents a decline of 0.4% when compared to the 8.62% recorded in 2019.

Downstream operations

As regards fuel subsidy, Orji said the report further showed that N106.9 billion was paid as subsidy between January and June 2020, to sustain product availability with an outstanding balance of N26.74 billion yet to be paid.

According to him, 20.01 billion litres of petrol, 52 million litres of Kerosene and 5.33 billion litres of diesel were imported into Nigeria for domestic use during the period under review.

On oil theft and crude losses, he explained that the report based its assessment on the data provided to NEITI by 22 of the 69 companies covered.

According to him, based on the result of the assessment, 29.16mmbls of crude valued at $44.73 million (N15.71 billion) was stolen with 349 cases of pipeline vandalism recorded in 2020, an improvement when compared to 1,387 cases in 2019.

On gas production, he said the sub-sector contributed more than $1.5 billion to the Federation Account.

He said the gas production in 2020 was 3.01 million cubic feet, while 64% of this was sold, 8% was flared, and 4% unaccounted for.

“The report also showed that the oil and gas sector contributed only 8.16% to the total Gross Domestic Product (GDP) in 2020. This represents a decline of 0.4% when compared to the 8.62% recorded in 2019.

“The report also showed that the sector dominated the country’s exports in 2020, contributing about 75% (N9.44 trillion) of the total export value of N12.52 trillion,” he said. (NAN)

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