The Nigerian National Petroleum Corporation (NNPC) and its subsidiary, the Nigerian Petroleum Development Company (NPDC) and other companies in the oil and gas sector, are yet to remit a total revenue of $22.06 billion and N481.75 billion, to the Federation Account.
The latest report on the summary of unremitted revenue, losses, and unreconciled differences from operations and transactions in the oil and gas sector, released in Abuja, on Monday, by the Nigerian Extractive Industries Transparency Initiative, NEITI, showed that the NNPC alone is yet to remit a total revenue of $19.04 billion and N424.57 billion.
Providing a breakdown of the unremitted revenues by the other firms, the report stated that oil and gas producing companies are still withholding $152.69 million and N5.2 billion; companies involved in offshore processing contracts, $498.6 million; and NPDC, $2.38 billion and N51.95 billion.
The NEITI report, stated that the total losses to the Federation arising from crude oil production, processing, and transportation, was $3.04 billion and N60.99 billion.
It said that the unreconciled differences arising from the allocation, sale, and remittance of proceeds from domestic crude allocated to the NNPC, was N317.48 billion.
Reacting, Peter Egbule, national coordinator of Publish What You Pay Nigeria, blamed regulatory lapses, weak institutions, determination by entities and individuals to divert public fund and the inability of government to act proactively.
He said while the Petroleum Industry Bill remains key to addressing the issues, the Federal Government must strengthen regulatory frameworks and show political will towards fighting corruption and blocking leakages in the oil sector.
Meanwhile, oil prices slid yesterday as Russia signaled output would remain high. Losses, however, were limited ahead of the United States’ sanctions on Iranian exports. The sanctions are expected to reduce supplies when they come into effect in just under a week.
Brent crude futures fell 12 cents to $77.50 a barrel while US West Texas Intermediate (WTI) crude lost 30 cents to $67.29 a barrel. Oil prices also fell about $10 a barrel since four-year highs reached in early October.
But Nigeria’s Minister of State for
Petroleum Resources, Ibe Kachikwu in an interview in London yesterday said the Organisation of Petroleum Exporting Countries (OPEC) is likely to keep prices at $70 per barrel when it meets in December. He described $70 as the “comfort level for us and everybody,” saying he would be surprised to see anything dramatic.
Russian Energy Minister Alexander Novak said on Saturday that there was no reason for Russia to freeze or cut its oil production levels, noting that there were risks that global oil markets could face a deficit.
OPEC, led by Saudi Arabia and non-OPEC member, Russia, agreed in June to lift oil supplies, but OPEC signaled last week that it might have to re-impose output cuts as global inventories rise.
“When the Russians start talking about keeping the production levels high and even the possibility that they need to increase it because of a possible tightness in supply, that brought on some selling pressure,” Reuters quoted Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut, as saying.
Industrial commodities such as crude and copper have also been rattled by hefty losses in global equities due to concern over corporate earnings and fears over the impact to economic growth from escalating trade tensions, as well as a stronger dollar.