Outstanding revenues due to the Federal Government from the operations of the oil and gas industry as of June this year rose to over $6.071 billion and N66.4 billion, respectively, the Nigeria Extractive Industries Transparency Initiative (NEITI) disclosed.
These figures were part of the key findings contained in NEITI’s 2022 and 2023 Independent Oil and Gas Industry Report published in Abuja on Thursday.
Details of the outstanding collectible revenues due to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as of August 31, 2024 showed that unpaid royalties and gas flare penalties accounted for $6.049 billion and N65.9 billion liabilities respectively.
The report which also provided a detailed analysis of the information and data regarding the agencies and entities owing the outstanding revenues due to the government further showed that outstanding petroleum profit taxes, company income taxes, withholding taxes, and VAT due to the Federal Inland Revenue Service (FIRS) as of June 2024 amounted to $21.926 million and N492.8 million.
Fuel importation, one of the major expenditure sub-heads by the Federal Government in recent years also received coverage in the latest NEITI report, which disclosed that a total of 23.54 billion litres of PMS (premium motor spirit) were imported into the country in 2022 and 20.28 billion litres in 2023.
The report said the import statistics represented a 3.25 billion litres, or 14 percent decline in the volume, following the removal of the subsidy by the government since May 2023.
A 10-year trend analysis of the fuel importation data in the report between 2014 and 2023 showed that the highest annual PMS importation into the country (23.54 billion litres), was recorded in 2022, while the lowest (16.88 billion litres, was in 2017.
The NEITI report also disclosed that a total of N15.87 trillion was claimed by the Nigerian National Petroleum Company (NNPC) Limited and other fuel marketers as under-recovery/price differentials between 2006 and 2023, with the highest amount of N4.714 trillion recorded in 2022.
On crude oil production, the report showed that fiscalised crude production in 2022 stood at 490.945 million barrels, compared to 556.130 million barrels produced in 2021, representing an 11 percent decline.
However, in 2023, the independent report revealed total fiscalised production of 537.571 million barrels was about 46.626 million-barrel, or 9.5 percent higher than the total production figures recorded in 2022.
A 10-year oil production trend of fiscalised crude oil production in Nigeria between 2014 and 2023 showed the highest production volume of 798.542 million barrels was recorded in 2014, while the lowest, 490.945 million barrels, was recorded in 2022.
The NEITI report also provided detailed information and data on crude lifting. In 2022, total crude lifting was 482.074 million barrels compared to 551.006 million barrels lifted in 2021. In 2023, total crude lifting stood at 534.159 million barrels, representing an 11% increase of 58.08 million barrels.
On crude oil theft and losses, the report said a total of 7.68 million barrels of crude oil were either stolen or lost in 2023, representing a significant drop by about 29.02 million barrels, or 79 percent, compared to 36.69 million barrels either stolen or lost in 2022.
On overall revenue generation in the oil and gas industry during the reporting period, the report showed that material companies accounted for $15.549 billion (96 percent) and non-material companies for $695.604 million (4 percent) of total revenues generated in 2022.
In 2023, the report showed that material companies accounted for $21.415 billion (95 percent), and non-material companies $1.238 billion (5 percent), with revenues coming from 17 identified revenue streams, including proceeds from taxes, oil and gas sales, dividends from Nigeria LNG, royalty payments, signature bonuses, gas flare penalties, and concession rents.
The report, which contained findings on the review of all aspects of the regulatory framework for the oil and gas industry, included the legal framework, fiscal regime, roles of government entities and reforms, laws in the Petroleum Industry Act (PIA) 2021, and regulations relating to addressing corruption risks in the oil and gas sector.
Also, the report conducted an overview of the statutory procedures for the awards and transfers of operating licenses in the industry and disclosed comprehensive information on property rights to oil and gas licenses and leases, including beneficial ownership information and public accessibility of contracts and licenses.
Other areas covered by the report included disclosures on the participation of state-owned enterprises in the oil and gas sector, exploration, production levels, and the valuation of extractive output.
A total of 78 companies operating in the oil and gas industry and nine relevant government agencies with the responsibility of that collecting, keeping custody, or managing oil and gas revenues were covered by the NEITI audit process.
The Secretary to the Government of the Federation, Sen. George Akume, who spoke at the public presentation of the report on Thursday in Abuja, reaffirmed “the unwavering commitment of the Federal Government of Nigeria to the principles of the Extractive Industries Transparency Initiative (EITI) being implemented in the country’s oil and gas sector by NEITI.
“We consider the EITI not only as a global standard for promoting transparency in the management of revenues from natural resources, but also as a tool to strengthen public trust, accountability, and economic growth,” the SGF stated.
Sen. Akume, who is also the chairman of the NEITI board, acknowledged that information and data provided by NEITI’s independent reports have consistently proven invaluable to the government.
These reports, he noted, have guided policy decisions, reforms, and measures that foster accountability, particularly in the oil and gas sector.
He said in a sector where opacity could easily lead to leakages, inefficiencies, and corruption, NEITI has become an indispensable partner in ensuring that Nigerians were fully aware of how their commonwealth was managed.
Assuring that the government’s commitment to EITI process extended beyond simple endorsement, Akume said the Federal Government considered NEITI’s role as a beacon of transparency and accountability in the extractive industries, adding that the credibility of its reports has always served as a foundation for formulating national policies, fighting corruption, revenue growth, and ensuring equitable distribution of revenues.
The data contained in the latest report, he pointed out, would inform critical government decisions moving forward, especially as the government continued to prioritize resource management, revenue mobilization, and public accountability.
The Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji, explained that the preparation of the report followed a meticulous and transparent process in line with global Extractive Industries Transparency Initiative (EITI) standards.
“A rigorous, multi-stakeholder approach was adopted, involving extensive collaboration with government agencies, extractive companies, civil society, and indigenous consultants. We ensured that all data was collected, validated, and reconciled in an open and transparent manner,” the NEITI Executive Secretary stated.
The report, Orji pointed out, provided valuable insights that would help guide policy, encourage robust public debate, and ultimately improve governance in the management of the country’s natural resources.
He said the report remained a vital tool for identifying leakages, improving revenue collection, and promoting resource management reforms in the country’s oil and gas industry.
The Chairman of the EFCC, Olanipekun Olukoyede used the occasion to remind all agencies playing in the extractive industry to do so in full compliance and cooperation with NEITI Independent Audit process, warning that those doing otherwise were making a huge mistake.
He said the EFCC and NEITI were in close partnership in the challenging war against all forms of corruption, especially in the oil, gas and mining industry.
The EFCC chairman publicly declared that where the work of NEITI stopped, was where the work of EFCC begins.
The Chairman announced that from NEITI’s past reports, EFCC recently recovered and remitted to the Federal Government coffers over N1 billion.
The Chairman who commended the Executive Secretary of NEITI and his team for the knowledge, skills and competence and the NEITI National Stakeholders Working Group (NSWG) for the strong leadership behind the agency assured that the current reports released by NEITI would be taken over by the EFCC for thorough and further investigations of its findings and recommendations.
The NEITI 2022/23 Independent Report of the Oil and Gas Industry underscored the urgency for the President to reconstitute a Presidential Committee to design a strategic implementation plan to guide the implementation of the Petroleum Industry Act, among other incisive overall governance and sector-specific recommendations.
The presentation was attended by Chairmen of National Assembly Committees, captains of industries, members of diplomatic missions, development partners, civil society organisations and the media.
