The committee equally frowned at the level of impunity being perpetuated by the oil majors and other actors in the oil industry even as it uncovered over $8 billion accrued from sales of gas warehoused by one of the oil companies operating within the country.
Worried by the level of impunity in the industry, the Ad-hoc Committee also summoned management team of five companies to provide evidence of payment of royalties, namely:
Sterling Global Oil Resources Ltd, Neconde Energy Ltd, ND Western Limited, Newcross E & P and Allied Energy.
Jarigbe Agom Jarigbe, chairman of the Ad-hoc Committee disclosed this while giving update on the ongoing investigative hearing into over N6 trillion unremitted revenues accrued from sales of gas.
The committee observed that records from Central Bank of Nigeria (CBN) and JP Morgan including signature bonus, gas and crude oil royalties, concession rental, gas flaring
royalties, revealed that Sterling Global Oil Resources Ltd, has no evidence of payment on gas sales and crude oil, yet operating in the upstream of the oil industry.
“We’ve done a lot of work, we discovered that the production sharing contract as put together is very faulty and as it gives room for most of the oil companies to fleece our revenues.
For instance on the PSC that has to do with Bonga Field where we have Total Shell, Agip and other companies.
“Just in Total alone, we have revenue from gas sales in billions of dollars yet to be remitted to the Consolidated Revenue Fund.
The PSC does not provide for the remittance of the proceeds from the gas sales.
“That’s why we see the PSC is very very faulty and when the committee went into this, Total brought a submission to us that they have a designated account and they were custodying the monies because they are yet to reach certain terms with NNPC.
“And we have all these monies in whatever accounts the funds are kept, thereby depriving us of our revenues. Only Total has about, from the records here, from 2007 to 2017 of over $8 billion. We’ve not talked of Shell, Agip and other companies.
“On their operations in Apo Field, you’ll discovered that because the PSC is faulty and there was no provisions for the revenues that accrue from gas sales.
From Apo Field, Total takes gas which is a PSC; transport it to Aminam, and sells to LNG and the proceeds from the sales in the ratio of a Joint Venture (JV).
Apo Field is a PSC not a JV, the gas from the Field belongs to the Federal Government of Nigeria not a Total but the gas is being sold and Total takes the money.
“We think that’s not right and this issues have to be corrected immediately and all the funds have to be repatriated to the Consolidated Revenue Fund.
It’s in billions of dollars, so we’ve asked NNPC, DPR and Total to make their submissions to the Committee so that we will ascertain the actual amount involved.
Before then, between the period based on what was submitted, between 2009 till date, because the PSC was put together in 2005, we have to look at these issues critically.
So I can confirm to you that we have funds can take us out of recession and all that.
I think, if we get these funds repatriated, Federal Government will borrow less to finance the deficit budget,” Jarigbe assured.
While responding to questions on the non-enforcement of extant laws regulating the oil industry, Jarigbe however commended the cooperation of DPR for providing useful information to the Committee.
“There are sanctions enshrined in the Act, one of the sanctions is suspension of the export permits and there are a lot of other sanctions. It is for these to be enforced.
The committee is going to make recommendations for prosecution of those who condone all these abuses.
But there must be political-will on the part of the Executive.
“We have interacted with DPR over the time and we think as an agency, they’ve done well because all the information we have on our table was provided by DPR.
We have to go through the records of all the companies and we also look at the export permit issued, the oil bloc licences and OML, so we got their cooperation.
“The issue is this, it’s a system thing. For instance recently we looked at the renewal of OML 42, and the committee discovered that, that was very very wrong, because as it stands, Neconde is still owing about $34 million in royalty, yet moving ahead to renew the license for another 20 years.
“For instance, Mobil on their gas sales from the Bonny River Terminal is owing over $170 million from the records submitted to us by DPR and they claimed they don’t suppose to be paying royalty from gas to liquid operations.
But they don’t have a licence for gas to liquid operations. The only company that is licensed to carry out gas to liquid separation is Chevron.
So we think all these anomalies. So we’ve set up a technical committee to look at these issues.
Authorities from Mobil, DPR, and we thought that DPR will have the courage to suspend the second quarter lifting permit of Mobil but that has not been done, so it’s going to be part of our recommendations,” the chairman vowed.
According to him, the records provided by Central Bank of Nigeria (CBN) including financial statements from JP Morgan on various transactions in the oil sector, further confirmed the findings of the Ad-hoc Committee.
He disclosed that the preliminary findings of the Ad-hoc Committee showed that about N6 trillion revenue accrued from sales of gas were not remitted.
Jarigbe who called for total overhaul of the operations of the industry expressed optimism that all technical and administrative issues bedeviling the oil industry have been
taken care of in the petroleum industry governance bill (PIGB) which has been transmitted to President Muhammadu Buhari for assent.
People's Daily
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