Nigeria Extractive Industries Transparency Initiative (NEITI) has received the commitment of the House of Representatives to recover over N2.6 trillion owed Nigeria by 77 Oil and Gas companies operating in the country.
This was confirmed by Femi Gbajabiamila, Speaker of the House, in an address at the public hearing on the matter held by the ad-hoc committee on the recovery of outstanding debt owed by oil and gas companies on Tuesday.
EnergyDay’s breakdown of the debt by the companies as of 31st December 2020 and as reflected in NEITI’s document released to the House shows that the total sum of N2.6 trillion ($6.2 billion) in royalties, charges and taxes was $3.171bn, with $3.094bn due to defunct Department of Petroleum Resources now NMDPRA and $77.097million due to Federal Inland Revenue Service(FIRS).
The House of Representative has at November 2021, considered the motion on the need to recover outstanding debts owed to the Federal Government by oil and gas companies operating in the country.
At the session on Tuesday, Gbajabiamila referring to the report presented to the committee, called for urgent actions for the recovery of the outstanding, which according to him, would be enough to address long-standing developmental challenges, improve revenue and reduce the need to borrow in order to bridge budget deficit.
The Speaker said, “The House had considered the Nigeria Extractive Industries Transparency Initiative (NEITI) report. We have resolved to investigate these debts, conduct a proper reconciliation of accounts between the federal government and oil companies and urge NEITI, the National Oil Spill Detection Agency (NOSDRA) and FIRS to provide the data required to facilitate the recovery of debts owed to the Federal Government by the oil and gas Companies”.
Ogbonnaya Orji, Executive Secretary, NEITI, on his part said, the agency discovered the amount of money being owed the federal government by the various oil and gas companies and drew attention of the government to the anomalies.
Referring to the report presented to the committee, he said, the debt profile of the debtor companies as of 31st December 2020 was $3.171bn, with $3.094bn due to DPR and $77.097million due to FIRS.
Nkiruka Onyejeocha, Chairman of the ad-hoc Committee on recovery of the outstanding debts owed by oil and gas companies, promised the committee’s commitment to work with NEITI on mechanism for the recovery of the outstanding debt
Muhammad Nami, Chairman, Federal Inland Revenue Service (FIRS), who was represented by Anita Erinne, Acting Head, Debt Management and Enforcement of the agency, acknowledged that the FIRS is aware of the debt
The FIRS boss said 70 out of the 77 companies listed by NEITI have outstanding tax obligations of US$1.49 billion collectible by the FIRS.
He confirmed this in a letter sent by him to the committee in February 2021, where it was revealed that the US$6.48 billion published by NEITI in its audit report was 23 percent of the total amount owed by the affected companies to FIRS.
He said, “The balance of 77% consisted of Royalty Oil (US$4.357 billion); Royalty Gas (US$292.44 million) Gas Flare (US$270.187 million) and Concession Rentals (US$41.85 million)”.
NEITI and the Federal Inland Revenue Service however noted that some of the indicted companies have initiated a process to pay off the debt.