Home » NEITI exposes shocking $8.264bn unsettled debt in oil and gas sector

NEITI exposes shocking $8.264bn unsettled debt in oil and gas sector

by Daudu John


NEITI exposes shocking $8.264bn unsettled debt in oil and gas sector


The Nigerian Extractives Industries Transparency Initiative has said that the total outstanding financial liabilities in the oil and gas sector owed to the federation amount to $8.264 billion.


The agency also disclosed that about $13.591 million of the said amount was earmarked as revenues payable to the Federal Inland Revenue Service.


These were contained in NEITI 2021 oil and gas industry report unveiled in Abuja on Monday.


The report further disclosed that as of July 31, 2023, the Nigerian Upstream Petroleum Regulatory Commission held outstanding tax collectable revenues amounting to $8.251 billion, a figure that was accurate as of December 31, 2022.


Alarmingly, over 80 percent of this substantial sum is attributed to the Nigerian National Petroleum Company Limited, underlining the significant weight of responsibility on this entity.


The report covered 69 companies’ payments, 13 government agencies, NNPCL, Nigeria LNG, and Nigeria Sao Tome Joint Development Authority.


Speaking on the significance of the report, NEITI’s Executive Secretary, Ogbonnaya Orji said the approach deployed in gathering the report encompassed 23 revenue streams.


He added that the move underscored the report’s pivotal role in assisting governments at all levels to bolster revenue streams, furthering national development and poverty reduction through robust resource mobilization efforts.


He said the data unveiled in this report emerged as a critical tool in steering the nation towards sound financial strategies and responsible resource management.


One highlight of the report was the disclosure that Lekoil Limited made a payment exceeding $7.76 million, despite failing to submit any reconciliation information.


Also speaking during the event, the Chairman of the House Committee on Petroleum Resources, (Downstream), Ikeagwuonu Ugochinyere said, “I believe that this year’s report will no doubt enhance the economic fortune of Nigeria and increase her revenue generation from both oil and non-oil sectors, for national development.”


On his part, the Chairman Senate Committee on Petroleum Upstream, Eteng Williams commended NEITI for the critical role it is playing in the country’s extractive sector and urged the agency to continue to be at the forefront of the oil and gas sector to ensure adequate revenue streams for the country now that subsidy has been removed.


NEITI also called for a thorough audit of PMS subsidy-related financial transactions between the NNPCL and the federation to clarify liabilities and validate data.


According to the NEITI report, there was a decline in crude oil losses in the highlighted year attributed to theft and sabotage, registering a reduction from 39.08 million barrels in the year 2020 to 37.57 million barrels in the subsequent year, 2021.


This numerical downturn, however, is profoundly interlinked with a notable reduction in crude oil production during that time frame, impacting a total of 29 companies operating within the sector.


According to the NEITI report, in 2021, Nigeria raked in $23.046 billion from the extractive sector, marking a 13 percent increase compared to the $20.43 billion earned in 2020.


In another report, the Nigerian equities market, Nigerian Exchange Limited opened the week on a positive note enabling investors to record gains worth N263.49 billion.


At the end of the day’s trading session, the NGX All-Share index closed at 67,877.17 points translating to 0.71 percent gain when compared with performance of the previous session.


Consequently, market capitalization gained N263.49 billion to close at N37.15 trillion, as year-to-date return rose to 32.44 percent.


The market’s performance was primarily driven by a rally in the shares of telco heavyweight, AIRTELAFRI which rose by 1.60% alongside GTCO having appreciated by 0.14% while STANBIC gained 9.58%.


Analysis of the market activities showed that trade turnover settled higher relative to the previous session, with the value of transactions up by 70.55%.


A total of 515.28 million shares valued at ₦8.93 billion were exchanged in 8,357 deals.


UBA led the volume chart with 109.47m units traded even as its share price rose by 8.51% while AIRTELAFRI led the value charts in deals worth ₦2.72 billion.


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