Abuja owes oil firms, they owe Abuja in ridiculous tit-for-tat
By Jeph Ajobaju, Chief Copy Editor
Some 77 oil firms owe Abuja N2.6 trillion in taxes, says the Nigerian Extractive Industries Transparency Initiative (NEITI). They also $4 billion to the Niger Delta Development Commission (NNDC), says Niger Delta Minister Godswill Akpabio.
In turn, after paying out $3.53 billion cash call arrears, the government is owing $1.15 billion to five oil companies; which sounds like a tit-for-tat that deprives the economy of vital funds to benefit Nigerians.
The latest report on the Pre-2016 Cash Call Arrears Repayment to International Oil Companies (IOCs) as of October 31, 2021 show that the five oil companies are joint venture (JV) partners of the Nigerian National Petroleum Corporation (NNPC).
The oil firms are Shell, Mobil, Chevron, Total, and Agip.
________________________________________________________________
Related articles:
NEITI to name 77 oil firms owing treasury N2.6tr tax
MDAs and banks face prosecution for TSA rules violation
Probe N3.14b missing in Finance Ministry, SERAP tells Buhari
__________________________________________________________________
Payments
The report confirmed that the government has paid the following amounts to the companies as total negotiated debt and total payment:
- Mobil – $833.75 million
- Chevron – $1.097 billion
- Shell – $680.6 million (balance $691.91 million)
- Total – $411.73 million (balance $199.24 million)
- Agip – $511.02 million (balance $263.64 million)
Total negotiated debt to the five firms was $4.689 billion, total payment $3.534 billion, and outstanding balance $1.154 billion, per reporting by The PUNCH.
Cash calls
Cash calls are sent by JV operators to non-operating partners for payment in the light of anticipated future capital, operating expenditures or the need for additional capital contributions.
The government through the NNPC has over the years piled up cash call bills for oil firms with which it has JVs for oil exploration and production.
Analysts said the delay in payment has hindered oil and gas investment but commended the government and the NNPC for the repayment some of the debts.
The NNPC signed the cash call repayment agreement with the five firms in 2016 to defray the cash-call arrears within five years after many years of indebtedness to JV partners.
The Petroleum Resources Ministry negotiated a discount with the IOCs in December 2016, which reduced the debt from about $5.1 billion to $4.68 billion that Abuja pays in installments.