Tag: NEITI

  • NEITI moves to recover $6bn, N66bn from oil stakeholders

    NEITI moves to recover $6bn, N66bn from oil stakeholders

    Plans are underway to recover $6 billion and an additional N66 billion owed to the Federal Government by stakeholders in the oil sector.

    Mr Ogbonnaya Orji, the Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), stated this on Monday in Abuja.

    He was speaking at the 2025 budget defence session organised by the House of Representatives Committee on Petroleum Resources (Upstream).

    Orji revealed that NEITI was collaborating with the Economic and Financial Crimes Commission (EFCC) to recover the funds into government coffers.

    The executive secretary noted that, according to the 2020 and 2021 reports, over $3.7 billion was recovered into government coffers as outstanding liabilities from companies operating in the sector.

    He explained that NEITI was established to promote transparency and accountability in the Nigerian oil and gas, as well as the mining sector.

    Orji said the agency had been allocated a budget of N6.5 billion for the 2025 financial year, comprising N2.220 billion for personnel, N1.722 billion for overhead, and N2.575 billion for capital projects.

    Orji outlined some of the critical activities to be undertaken in the year.

    They include conducting industry reports on the oil, gas, and mining sector, as well as fiscal allocation and statutory disbursement audits.

    He added that research studies would be conducted on the actual volume of PMS consumed in Nigeria.

    According to him, it will also indicate the economic impact of energy transition, and a national perception survey of EITI implementation in Nigeria.

    During the budget defence session, Rep. Kafilat Ogbara (APC-Lagos) emphasised the need for government agencies to ensure that their budget proposals comply with the specified line items.

    She expressed concern over the N32 million allocated for meals in the 2025 budget, stating that it was excessive, especially during a time of economic hardship.

    “Most of our agencies should ensure that what they are bringing as budget proposal must actually tally with the line item and the purpose why you want to use such funds.

    “Let us not just see budget defence as, ‘the money is there and we should share it. So, let us see how to get our own share’,” she said.

    Rep. Ademorin Kuye (APC-Lagos) also stressed the importance of considering the economic situation in the country when preparing the annual budget.

    He noted that the public perceives the National Assembly as a rubber stamp that approves anything presented by government agencies.

    The Chairman of the Committee, Rep. Alhassan Doguwa, faulted the language used in the budget preparation.

    He also faulted the inclusion of the National Assembly as beneficiaries of the agency’s welfare package.

    Doguwa emphasised that the committee’s primary concern was the welfare of the Nigerian people.

    He said the agencies must be mindful of their expenditure of public resources.

    “While I agree that the budget stops at our desk and you are just presenting a proposal, I will like to say that the economy is actually bad.

    “The population of people for whom we are actually here are crying out. Agencies of government must be mindful of what they spend out of public resources on.

    “All these proposals are going to be spent at the expense of the Nigerian people.

    “Sometimes, we come to make presentations here that sounds funny and very insultive in the eyes of the people.

    “Especially, when you say in your projection things like welfare package in form of ex-gratia, health insurance, welfare packages to staff and some critical stakeholders,” he said.

    Doguwa, however, assured the committee’s readiness to support the agency in actualising its mandate.

    “Your agency is a critical one and the legislature was appreciative of the work that you are doing,” he said.

  • FG generates N1.137tn from solid minerals 2007-2023 – NEITI report

    FG generates N1.137tn from solid minerals 2007-2023 – NEITI report

    The Nigerian Extractive Industries Transparency Initiative (NEITI) said the solid minerals sector contributed ₦1.137 trillion in direct payments to various government levels from 2007 to 2023.

    NEITI disclosed this on Wednesday in Abuja while presenting the 2023 Solid Minerals Audit Report, the 16th audit cycle, which provided a comprehensive overview of the sector’s contributions from 2007 to 2023.

    Conducted by indigenous firm Haruna Yahaya and Co., the report covered the solid minerals industry’s economic contributions, revenue streams, and exports, providing recommendations for sector reforms.

    The report showed a substantial increase in government receipts from ₦7.59 billion in 2007 to ₦341.27 billion in 2022, a 44-fold rise, indicating solid sector growth.

    The 2023 report underscored the sector’s evolution into a vital revenue contributor for Nigeria, with cumulative contributions now exceeding ₦1 trillion.

    It disclosed that in 2022, the sector generated ₦345.41 billion, with a reconciled final revenue of ₦329.92 billion.

    “Company payments analysis indicated that total government revenue, including reconciled and unilaterally disclosed figures, reached ₦401.87 billion in 2023.

    “Key revenue streams included VAT (₦128.32 billion), FIRS taxes (₦370.09 billion), Education Tax (38.64 per cent), Company Income Tax (10.64 per cent), and royalties (₦9.06 billion).

    “Discrepancies initially amounted to ₦301.6 billion but were reconciled down to ₦100 million, demonstrating NEITI’s transparency commitment,” the report said.

    The production and export data showed 95.07 million tonnes of minerals produced in 2023, with a significant export volume of 4.32 million metric tonnes, valued at ₦117.29 billion.

    The report highlighted top mineral-producing states, including Ogun, Kogi, and Rivers, with Ogun leading production.

    Revenue contributions were led by Osun, Ogun, and Kogi states.

    The report also identified the solid minerals sector’s Gross Domestic Product (GDP) contribution at 0.83 per cent in 2022, with incremental growth to 0.75 per cent in 2023, underscoring untapped potential.

    It reiterated policy measures and reforms needed to unlock the sector’s capacity to contribute more significantly to Nigeria’s economic diversification.

  • Oil and gas industry owes FG $6bn, N66bn

    Oil and gas industry owes FG $6bn, N66bn

    The Nigeria Extractive Industries Transparency Initiative (NEITI), says outstanding collectible revenues due to the Federal Government in the oil and gas industry have risen to 6.071 billion dollars and N66.4 billion as at June 2024, respectively.

    NEITI disclosed this on Thursday in Abuja at the public presentation of its 2022 and 2023 Independent Oil and Gas Industry Reports. The report is being prepared by the NEITI Board, National Stakeholders Working Group (NSWG).

    The report was unveiled by Mr Ola Olukoyede, Chairman, Economic and Financial Crimes Commission (EFCC), alongside Sen. George Akume, Secretary to the Government of the Federation and Chairman, NSWG, NEITI and other dignitaries.

    The breakdown of the report showed that  outstanding liabilities were 6.049 billion dollars and N65.9 billion in unpaid royalties and gas flare penalties, due to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as collectible revenues by Aug. 31, 2024.

    It also provided a detailed analysis of the information and data regarding who owes what in outstanding revenues due to the government.

    A further breakdown showed outstanding petroleum profit taxes, company income taxes, withholding taxes, and Value Added Tax  (VAT), due to the Federal Inland Revenue Service (FIRS), amounting to 21.926 million dollars and N492.8 million as of June 2024.

    On fuel importation, the latest NEITI report disclosed that a total of 23.54 billion litres of Premium Motor Spirit (PMS) were imported into the country in 2022, while 20.28 billion litres were imported in 2023.

    This represented a reduction of 3.25 billion litres, or a 14 per cent decline, following the removal of the fuel subsidy.

    A detailed 10-year trend analysis (2014–2023) in the NEITI report 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 recorded in 2017.

    The NEITI report also disclosed that a total of N15.87 trillion was claimed as under-recovery/price differentials between 2006 and 2023, with the highest amount, N4.714 trillion, recorded in 2022.

    On crude production, fiscalised crude production in 2022 stood at 490.945 million barrels, compared to 556.130 million barrels produced in 2021, representing an 11 per cent decline.

    However, in 2023, NEITI’s independent report revealed total fiscalised production of 537.571 million barrels, and 46.626 million-barrel or 9.5 per cent increase from total production recorded in 2022.

    A 10-year trend (2014–2023) of fiscalised crude oil production in Nigeria 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 further provided detailed information and data on crude lifting, disclosing that 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 per cent increase of 58.08 million barrels,” the report stated.

    On oil theft and crude losses, a total of 7.68 million barrels of crude were either stolen or lost in 2023, representing a significant drop of 79 per cent (29.02 million barrels) compared to 36.69 million barrels either stolen or lost in 2022.

    NEITI’s independent industry report carefully reviewed all aspects of the regulatory framework for the oil and gas industry.

    This included the legal framework, fiscal regime, roles of government entities and reforms, as well as laws, Petroleum Industry Act (PIA 2021) and regulations relating to addressing corruption risks in the oil and gas sector.

    The event was supported by the European Union and the Rule of Law and Anti-Corruprion (RoLAC) programme being implemented by International Institute for Democracy and Electoral Assistance (IIDEA).

    Utilise oil, gas industry report as tool for public debate – NEITI

    The Nigeria Extractive Industries Transparency Initiative (NEITI) has urged stakeholders to utilise its 2022/2023 oil and gas report for civic engagement, constructive dialogue, and public debate.

    Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji, made the call at the report’s public presentation on Thursday in Abuja.

    The report was unveiled by Mr Ola Olukoyede, Chairman, Economic and Financial Crimes Commission (EFCC), alongside Sen. George Akume, Secretary to the Government of the Federation and Chairman, NSWG, NEITI and other dignitaries.

    Orji emphasised the report’s significance in guiding policy, encouraging public debate, and improving governance in natural resource management.

    He highlighted the report’s comprehensive data on revenues, governance structures, operations, and compliance within the oil and gas sector.

    Speaking at the public presentation of the report, Akume reaffirmed the Federal Government’s commitment to transparency principles.

    Olukoyede pledged to investigate the report’s findings and recommendations, noting that NEITI’s previous reports led to the recovery of over N1 billion.

    The report is available on NEITI’s website, providing valuable insights into the sector’s performance and challenges.

    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.

  • Over $23bn revenue generated by oil and gas in 2021 – NEITI

    Over $23bn revenue generated by oil and gas in 2021 – NEITI

    The Nigeria Extractive Industries Transparency Initiative (NEITI) said the oil and gas industry generated over $23billion in 2021.

    The Executive Secretary of NEITI, Dr Orji Ogbonnaya-Orji said this while presenting highlights on the 2021 Oil and Gas report unveiled on Monday in Abuja.

    According to Ogbonnaya Orji, the revenue sources included sales of federation crude oil and gas, taxes, royalties, concession rental, gas flare penalty, bonus and license fees, and transportation fees.

    He said that the total revenue was also generated through dividends from NLNG, NDDC levy, NCDMB levy, Ness fee, and miscellaneous income.

    According to the NEITI boss, a total of $13.2 billion dollars was remitted from the sum to the federation account.

    He said that the Nigeria National Petroleum Corporation, before its transition failed to remit about $2 billion to the federation account and a total of $6.9 billion was deducted at FAAC.

    Ogbonnaya-Orji said that while oil production for the year under review stood at about 566,129 million barrels per day, gas production came at over 2,743,700 million standard cubic feet per day.

    He said that the sector contributed a total of 7.2 per cent to the nation’s Gross Domestic Product (GDP) in 2021 with export contribution of 76.2 per cent.

    The executive secretary said that  the Federal Government paid about $3.087 billion in cash calls as equity contributions while the outstanding cash-call liabilities payable by the federation stood at about N330.007 billion.

    On data of Beneficial Owners (BO) of Assets, Ogbonnaya-Orji said that about 69 companies were covered in the production of the report and have disclosed some BO information through NEITI or CAC portal except four companies.

    On subsidy, the NEITI boss said about $1,159 trillion was paid by the government as subsidy between March to December 2021.

    “NEITI audits revealed that between 2006 and 2021, a total of N8.149 trillion has been so far expended on petroleum subsidy, now referred to as under-recovery,’ he said.

    On recommendations, he said that based on the outstanding liabilities payable to FIRS and NUPRC, the NNPC and NPCD should be investigated while other companies should promptly pay their liabilities.

    Ogbonnaya-Orji said the report also recommended that a special investigation be instituted to establish the status of our non-operational refineries and value for money assessment on the refineries should be carried out.

    He further reiterated the need to strengthen remediation mechanisms and involve independent third parties to conduct detailed investigations when necessary among other recommendations.

    Earlier, stakeholders in the oil and gas sector commended NEITI on efforts towards ensuring transparency and accountability in the industry.

    Representing the Secretary to Government of the Federation, George Akume, his Permanent Secretary on Political and Economic Affairs, Esuabana Nko-Asanye, reiterated the importance of the report to economic development.

    Akume reaffirmed the Federal Government’s commitment to support and deepen the implementation of the EITI in Nigeria.

    He then restated the need for security issues especially in the Niger/Delta to be tackled to reduce losses in the sector.

    The Group Managing Director of NNPCL, Mele Kyari, represented by his Chief Compliant Officer, Nasir Usman, pledged the unreserved support of NNPCL to NEITI to enable it achieve its mandate.

    Representing the Minister, Budget and Economic Planning, his Permanent Secretary, Nebolisa Anako, stated the importance of data for economic planning.

    He then reiterated the commitment of the government to the mandate of NEITI as the oil and gas sector was one of the major sources of foreign exchange for the nation.

    The Chairman, House Committee on Petroleum, Hon. Ikenga Ugochinyere, called for the need to amend the NEITI Act and urged for more government allocation to the initiative to enable it better carry out its mandate.

    Ugochinyere also pledged the commitment of the House to work towards the implementation of the report that was unveiled today.

    Similarly, the Chairmen Senate Committee on Petroleum Upstream, Etang Williams and the Senate Committee on Oil and Gas Host Communities, Benson Agadaga also expressed commitment to stand by NEITI in implementing recommendations of the report.

    The unveiling of the 2021 report,was attended by various stakeholders and partners in the oil and gas sector in the country.

  • FAAC: How FG, States, LGs shared N4.37 trillion from January to June 2023

    FAAC: How FG, States, LGs shared N4.37 trillion from January to June 2023

    The three tiers of government – the Federal, States and Local Government Councils (LGs), shared a total of N4.37 trillion from the Federation Account as statutory revenue allocations between January and June 2023.

    This is contained in the latest report by the Nigeria Extractive Industries Transparency Initiative (NEITI) on the Federation Account revenue allocations for the first half of the year.

    Dr Orji Ogbonnanya Orji, Executive Secretary, NEITI, who announced the report on Thursday in Abuja, said total distributable FAAC allocations to the three tiers of government in first and second quarters (Q2) of 2023 stood at N2.32 trillion and N2.04 trillion respectively.

    The NEITI quarterly review revealed that inflows into the Federation Account in Q2 of 2023 declined by 23 per cent which affected the distributable revenue which fell by 12 per cent when compared with the total revenue disbursed in the first quarter.

    “Each tier of government received more than N1 trillion over the six-month period,” he said.

    The report showed that a breakdown of the revenue receipts showed that the federal government received about N1.78 trillion, or 40.7 per cent, while the State governments received N1.5 trillion, or 34.5 per cent.

    According to the report, the Local government councils received N1.08 trillion or 24.8 per cent of the total distributable revenue for the period.

    It further disclosed that a comparative analysis of the total allocations on a year-on-year basis in the corresponding quarters of 2022 and 2023 showed that the distributable revenue of N4.366 trillion shared was higher by 16.7 per cent from about N4.05 trillion shared  in 2022.

    Consequently, it revealed that the allocation received by the federal government over the period under review increased by 19.8 per cent to N1.78 trillion in 2023, from the N1.48 trillion in the corresponding period in 2022.

    Similarly, the report noted allocations to the State governments grew by about 11.2 per cent to N1.42 trillion in 2023 from N1.26 trillion in 2022, while allocations to the LGs rose by 16.8 per cent to N1.08 trillion in 2023, from N926 billion in 2022.

    The increase in half-yearly allocations in 2023 was consistent with an upward trend from the previous period where the distributable revenue for the first half of the year rose by 16.7 per cent, from N3.47 trillion between January and June 2021 to N4.05 trillion in the corresponding period in 2022.

    Also , allocations to the federal, states and LGs increased across board by 8.8 per cent 26.5 per cent and 14.2 per cent respectively.

    However, compared to the same period in 2022, it said the report showed that FAAC distribution in Q2 declined in absolute value with total distributable revenue of N2.02 trillion being less by 13 per cent than about N2.16 trillion distributed in the second quarter of 2022.

    It said further analysis of the disbursements to the states showed that Delta state received the highest allocation of N102.79 billion in the second quarter of 2023, followed by Akwa Ibom’s N70.01 billion, Rivers N69.73 billion, Lagos N60.64 billion and Bayelsa N56.34 billion.

    It said the total disbursements to these five states (N359.5 billion), or 35.9 per cent of the total FAAC allocations, was more than the total allocations to the next 15 states (N349.3 billion).

    It said the cumulative allocation to the five states was also more than the share of allocation to 19 other states put together, adding that the bottom 10 states received 17.3 per cent of the revenue shared in the second quarter of 2023.

    According to the report, Nasarawa, Ebonyi, Ekiti, Gombe and Taraba states received the lowest allocations of N16.71 billion, N16.84 billion, N16.95 billion, N17.22 billion and N17.45 billion respectively.

    It said four of the five states with the highest allocations, except Lagos, received a significant share of 13 per cent derivation revenue allocated to oil-producing states.

    It said the total disbursements to these five states (N359.5 billion), or 35.9 per cent of the total FAAC allocations, was more than the total allocations to the next 15 states (N349.3 billion), while the cumulative allocation to the five states was also more than the share of allocation to 19 other states.

    It added that the bottom 10 states received 17.3 per cent of the revenue shared in the second quarter of 2023.
    It stated that the bulk of the revenues to the federation account came from remittances from the three main revenue-generating agencies.

    It listed them as the Nigeria Upstream Petroleum Regulatory Commission, the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS).

    These revenues, it explained that they came through earnings from the different revenue streams, including oil and gas royalties, petroleum profit tax, company income tax, value added tax and import and excise duties.

    “Also, revenue remittances of about N1.84 trillion in Q2 2023 came from mineral and non-mineral sources, comprising of N809 billion, or 44 per cent from mineral revenue (mostly oil and gas) and N1.03 trillion, or 56 per cent  from non-mineral sources.

    The report further revealed a huge gap between revenue disbursements from the oil and gas and solid minerals sectors, pointing out that this was a reflection of the perennial underperformance of the latter over the years.

    “In terms of debt service obligations and the impacts on states’ net allocations, the report showed that Lagos topped the list of 36 states with a total deduction of N9.03 billion in the second quarter of 2023, followed by Delta (N6.76 billion), Ogun (N6.10 billion), Kaduna (N5.63 billion), Osun (N5.60 billion and Imo (N5.51 billion).

    “Jigawa, Anambra, Nassarawa, Kebbi and Enugu States had the lowest deductions of N1.16 billion, N1.29 billion, N1.45 billion, N1.51 billion and N1.88 billion respectively.

    “The nine oil-producing states, according to the report, namely Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo and Rivers states received allocations relative to their share of the oil and gas as well as other minerals extracted from their domains,” it said.

    It projected that with efficient, prudent management and utilisation of the savings of N3.6Trillion from subsidy payment in the first six months of 2023, Nigeria’s balance of payments would be boosted as demand which was served entirely by product importation would be curtailed.

    It said the drop in demand would inadvertently, trigger a corresponding reduction in the dollar volume needed to pay for premium motor spirit (PMS), which constituted the largest single import product by value,” he said.

    The report welcomed with high expectations, the unification and the floating of the exchange rate policy recently introduced to strengthen and stabilise the economy.

    “With the average exchange rate of N713.69 to US$1, which is about 55 per cent higher than the rate of N460.52 to the dollar recorded during Q2 will significantly raise the value of export earnings remitted to the Federation Account by more than 50 per cent.

    “Also earnings from the new exchange rate through exports will also increase the value of foreign capital inflows, including investments, loans and grants,” it recommended.

    Also, the report urged the Central Bank of Nigeria to prioritise policies to stabilise the exchange rate to facilitate the effective implementation of the deregulation policy and stabilise foreign exchange-dependent inflows into the Federation Account.

  • Nigeria requires $20bn annually for gas expansion projects – NEITI

    Nigeria requires $20bn annually for gas expansion projects – NEITI

    The Nigeria Extractive Industries Transparency Initiative (NEITI) says Nigeria requires $20 billion annually to achieve the desired gas expansion plan to bridge the country’s gas infrastructure.

    Dr Orji Ogbonnaya Orji, NEITI Executive Secretary, at the policy dialogue on Nigeria’s Decade of Gas Action plan on Monday in Abuja said given the shrinking fossil fuel investment landscape, clarity was required of infrastructure to be prioritised.

    The dialogue was organised by the African Initiative for Transparency, Accountability and Responsible Leadership (AFRITAL) in collaboration with the Natural Resource Governance Institute (NRGI).

    The Federal Government in December 2020 rolled out the National Gas Expansion Programme (NGEP) to deepen the use of natural gas and make it a preferred form of cleaner, cheaper energy for both personal and industrial use.

    In a remark, Orji said Nigeria had the largest gas reserves in Africa and the ninth-largest globally with gas reserves of over 200 trillion cubic feet (tcf).

    “The Petroleum Industry Act (PIA) provides the most significant progress for the gas sector in strengthening governance and providing fiscal frameworks for the sector’s growth.

    “The gas utilisation plan should show the market-driven opportunities that would successfully translate the gas plans into sustainable economic development.

    “For the gas utilisation policy to work, there is a compelling need for deliberate ambitious investment in its infrastructure. This includes specific connectivity across upstream facilities to processing, power plants and other end uses.

    “The network code provides a framework through third-party access to resolve some of the connectivity issues but to a large extent, achieving the desired gas expansion will require an estimated $20 billion annually,” he said.

    Orji said that a new concept analysis would be required to demonstrate the new approaches the government intends to embrace to deliver on the gas infrastructure.

    He recommended that the Federal Government should develop and publish a detailed, realistic, coated and comprehensive gas policy with clear roles for the state, and non-state actors and timelines to track periodic progress.

    Orji urged government to develop an industry-specific linkage between the integrated gas policy with Nigeria’s energy transition policies with a supporting action plan built on a robust monitoring and evaluation framework to track implementation.

    He also called for a detailed plan to end gas flaring through a private sector-led commercialisation programme and pursue an open, competitive and transparent gas flare commercialisation programme,” he said.

    Earlier, Dr Louis Ogbeifun, the Executive Director AFRITAL, had decried the fact that Nigeria is so rich in gas, but most of its citizens use firewood or coal for cooking with all its attendant health hazards.

    “Over the years, Nigeria has behaved like the prodigal son by exporting mineral resources to earn dollars for consumption without savings, reinvestment in revenue, and employment generation ventures.

    “These analogies reflect the contradiction of being a rich but poor nation. Rich because Nigeria is vastly rich and blessed with abundant minerals and energy resources but so poor that most citizens lack access to affordable electricity and other essential social and welfare benefits,” Ogbeifun said.

    He said in a bid to reverse the highlighted negative narrations, achieve energy accessibility, afordability, and sustainability as a country that the 2021-2030 government legislation tagged the “Decade of Gas Action Plan (DofG)” was enunciated.

    According to him, If the government’s intentions are effectively implemented, Nigeria is expected to witness a vast gas Infrastructural development during the period.

    He said part of the stepping stones toward achieving the goals of DofG was the construction of the 614km Ajaokuta-Kaduna-Kano gas pipeline to transport about two billion cf of natural gas per day.

    “This and other initiatives are also aimed at deepening the usage of LPG and CNG in the country and ultimately expanding the Autogas policy, which would reduce dependency on petrol as our mainstay for transportation in the long run.

    “Before the AKKP project, Nigeria conceptualised the Nigeria-Morroco Gas Pipeline, as an extension of the West Africn Gas Pipeline, which would run through some African countries with a possible linkage to European market.

    “This project was conceptualised in 2016. Outside the NLNG project, the Nigeria-Morrocco Gas Pipeline project would meet the international focus even as the local expansion of the LPG and CNG are also being pursued.

    “Let us hope that our leaders would cautiously navigate the rough edges of the coup in the Niger Republic to forestall the risks of sabotage of this project by international state and non-state actors,” he said.

    Also speaking, Mr Aaron Sayne of NGRI, called for tackling of foreign exchange and policy issues, investment and access to finance on gas project while indigenous players should take place of the International Oil Companies.

    Mrs Oluremi Komolafe, Director, Gas, Ministry of Petroleum Resource, said the ministry would remain was committed to energy transition.

    Komolafe added that the NGEP was making way toward its realisation, while Compressed Natural Gas engines conversion was ongoing, noting that production would be spured to meet demand.

  • 8 strategic considerations offered to Tinubu on fuel subsidy removal

    8 strategic considerations offered to Tinubu on fuel subsidy removal

    The Nigeria Extractive Industries Transparency Initiative (NEITI) has lauded the political will and sincerity of purpose demonstrated by President Bola Tinubu in removing fuel subsidy.

    A statement from NEITI House, Abuja on Tuesday, described the move as a positive move by the administration to decisively implement the findings and recommendations contained in the NEITI reports.

    The statement, signed by Mrs Obiageli Onuorah, the Deputy Director/Head Communications and Stakeholders Management, said bold step was required to block leakages, grow revenues and advance the ongoing reforms in the oil, gas and mining industries.

    President Bola Tinubu, in his inaugural speech on Monday, said the fuel subsidy regime had ended with the commencement of his administration.

    Onuorah recalled that its recommendations for the removal of fuel subsidies have remained a persistent request since 2006 given the agency’s concerns about the huge financial burden that the subsidy regime imposed on the growth of the Nigerian economy over the years.

    She explained that from the NEITI reports, between 2005 and 2021, the country spent $74.39 billion which translated to N13.69 trillion on subsidy.

    According to the NEITI report, a breakdown of these figures showed that in 2005, the government paid $2.6 billion dollars (N351 billion) as subsidy. In 2006 and 2007, it paid $1.99 billion and $2.18 billion (N257 billion and N272 billion) respectively.

    The report further pointed out that subsidy payments more than doubled in 2008 and 2010 and witnessed the highest increase ever in 2011 to $13.52 billion (N2.11 trillion).

    She said a sharp decline was witnessed in the years 2012, 2013, 2014 and 2015 when it dropped to  $3.34 billion (N654 billion) in 2012.

    Onuorah said the decline in subsidy expenditure continued in 2016 and 2017 to as low as  $473 million dollars (N154 billion) in 2017.

    “The reduction was short-lived as the payments skyrocketed to over $3.88 billion (N1.19 trillion) in 2018 and 2021 to $3.58 billion (N1.43 trillion).

    “By these figures, Nigeria expended an average of N805.7 billion annually, N67.1 billion monthly or N2.2 billion daily,” she said.

    She said the NEITI data also showed that the amount expended on subsidies from 2005 to 2021 was equivalent to the entire budget for health, education, agriculture and defence in the last five years.

    Onuorah added the sum equals the capital expenditure for 10 years between 2011 to 2020.

    The deputy director explained that it was during this time (2011) that fuel subsidies dwarfed allocations to all critical areas of the economy.

    “NEITI ‘s persistent calls for the removal of petroleum subsidies were informed by the fact that the ways of funding the expenditure over these years relied more on federation accounts funds, the Federal Government and sometimes from external borrowing with negative consequences on government overall revenue profiles.

    “NEITI was also concerned that the consequences of funding subsidies have resulted in poor development of the downstream sector, declining GDP growth, rise in product theft, pipeline vandalism, environmental pollution and undue pressure on foreign exchange.

    “Other challenges imposed on the economy were naira depreciation, low employment generation, the declining balance of payments and worsening national debt,” she said.

    Onuorah said in a policy advisory released by NEITI in late 2022 to drive home the urgency to remove subsidy and resubmitted earlier in the year 2023, NEITI recommended eight steps to manage subsidy removal.

    She listed the steps to include the urgency to strengthen the implementation of the Petroleum Industry Act (PIA) as a whole and not in parts.

    NEITI also underlined the importance of unveiling the implementation of people-oriented welfare programmes to provide relief for the poor and vulnerable and advised on priority attention to be paid to the rehabilitation of the nation’s four refineries currently ongoing.

    On other policy considerations, she said government should commission a special report on actual PMS consumption in Nigeria, enforce stringent sanctions for criminal activities in the sector and conduct appropriate stakeholders’ consultations, engagements and enlightenment.

    “While the details of the implementation of the policy are being awaited, NEITI is set to commission a special research on the actual consumption of PMS in Nigeria.

    “The study is to establish precisely what the nation is consuming. NEITI’s view remains that the data on the country’s actual consumption is unknown resulting in huge revenue losses to the nation through subsidy payments based on estimates.

    “NEITI particularly welcomed President Bola Tinubu’s position that the revenues saved from subsidy should be channeled to education, health, roads and other critical infrastructure,” she said.

  • Forensic audit report indicts DPR for Nigeria’s oil loss

    Forensic audit report indicts DPR for Nigeria’s oil loss

    Nigeria’s huge oil loss estimated at 600, 000 barrels of crude per day has been a major source of concern to the government and stakeholders, prompting an investigation which has now indicted the Department of Petroleum Resources (DPR).

    Historically, Nigeria has been the largest exporter of oil in Africa, despite a lack of infrastructure that has hindered the country from being able to export at 100 per cent capacity.

    But in recent times, oil production in the country fell from 1.4 million barrels per day (bpd) at the start of 2022 to 900, 000 bpd as of September, plunging the country to fourth place among largest oil producers in Africa, behind Angola, Algeria and Libya.

    The Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL) Mele Kyari, claimed 600,000 barrels of crude oil produced per day were unaccounted for, owing largely to oil theft.

    However, a forensic audit conducted by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), discovered that between January 2020 to November 2022, 40 per cent of the volumes of crude oil losses in Nigeria are due to measurement inaccuracies and not theft.

    Chief Executive Officer of the NUPRC Gbenga Komolafe, also said that Nigeria was currently flaring about 10 per cent of gas produced, in a country where the cost of 12.5kg of cooking gas is about 40 per cent of the N30, 000 minimum wage.

    Komolafe further disclosed that agents of the commission will henceforth, assume responsibility for the deployment and maintenance of metering facilities across Nigeria’s oil and gas establishments, for transparency in hydrocarbon accounting.

    “The reform measure adopted by the commission offers a paradigm shift from the trajectory in Nigeria’s hydrocarbon measurement since oil was discovered in Nigeria in Oloibiri in 1956 and is aimed at ensuring that no one becomes a judge in his own case,” he said.

    The DPR is responsible for maintaining records on petroleum industry operations, particularly on matters relating to petroleum reserves, production, exports, licences and leases.

    It also monitors the Petroleum Industry operations to ensure that are in line with national goals and aspirations including those relating to Flare down and Domestic Gas Supply Obligations.

    Nigeria Extractive Industries Transparency Initiative (NEITI), had also previously accused the agency of failing to install meters at wellheads and the lack of capacity to monitor deep offshore, thereby making it difficult to ascertain the exact amount of crude oil produced in the country.

    However, DPR’s Head of Public Affairs, Paul Osu, insisted that every litre of crude produced in the country was adequately captured during the process of extraction.

    Osu explained that the DPR had launched the National Production Monitoring System (NPMS), as part of efforts to boost crude accounting process from production to export.

    “NPMS is an online platform for the direct and independent acquisition of production data from oil and gas facilities in Nigeria and enables DPR to exercise surveillance, perform production monitoring and data analysis for utilisation and forecasting,” he said.

  • NDDC: Fractured but unbroken – By Dakuku Peterside

    NDDC: Fractured but unbroken – By Dakuku Peterside

    The inauguration of the Management Board of the Niger Delta Development Commission (NDDC) last week, the second under President Buhari, was greeted with mixed reactions by the people of the Niger Delta and most Nigerians. The people’s response is rooted in many issues, most of which are connected and straddling. I list them here in no hierarchy of importance: a feeling of relief  that finally, the jinx of interim management has broken, a seeming sweetener for politics and the political season we are in, at last hopes of assuaging  the reign of mismanagement that has dented the image of the organisation and  dashed hopes arising from the inability of translating good intentions to practical results, and the general belief that the intervention agency has turned to the feasting ground of an insensitive elite.

    It is relevant on hindsight to understand the wisdom that led to the setting up of the intervention agency and its broad implications for the region and the Nigerian economy, to situate the concern of a broad spectrum of Nigerians. It is common knowledge, that the idea of an interventionist agency for the oil-producing Niger Delta region was premised on three critical pillars: the first is the well-acknowledged challenge of developing the Niger delta, which was adumbrated in the Willinks Commission Report of 1958, predates the country’s independence. The second is the urgent need for environmental justice on account of pervasive damage inflicted on the land, flora and fauna arising from oil production and gas flaring. Third reason was to address the insecurity prevalent in the region, cry of marginalisation and related restlessness of the oil-producing Niger delta which was negatively affecting the country’s revenue.

    The introduction of the NDDC bill by the Obasanjo administration and its dramatic passage by a veto of the National Assembly offered some hope that the country was now ready to remove its knee on the neck of the Niger Delta area. From 2000 to 2008, the government appeared prepared to chart a new path of accelerated sustainable development of the region. Without dwelling much on historical details, that ray of hope evaporated with subsequent leadership of the country. Succeeding leaders of the country and many who managed the organisation, saw the NDDC not from the premise of its founding vision but as a pot to service an insatiable elite at the expense of the area’s development.  It suffices to mention that lack of accountability, impunity and corruption cases became frequent at the agency, and leadership changes without following the law setting up the agency became, sadly, the norm instead of an exception.

    However, the NDDC derailment got egregious and offensive in the past six years leading to a massive outcry and moral panic. The Commission was literally in a coma, yet its resources were vanishing without let up. To respond to the outrage of stakeholders, the Federal Government rightly set up a forensic audit which later turned controversial. Revelations of the forensic audit were both stunning and shocking. Amongst other findings, NDDC got some N6 trillion in its coffers from inception. 13,777 contracts amongst other contracts awarded between 2001 and 2019 valued at over N3.3 trillion Naira, cannot be fully accounted for. A few of the projects are ongoing, and some are abandoned. More serious organisations have taken others over, and many others still need to be made available to be verified. The forensic audit also discovered that so much money ended up in the pockets of the rich and powerful.

    Surprisingly nobody has been prosecuted to date for malfeasance revealed by the forensic audit. Umana Umana, the current minister of the Niger delta ministry, recently revealed that contracts worth over N250 billion were awarded during the forensic period without due process. The findings of the forensic auditors are consistent with earlier findings by NEITI, which underscored that the mismanagement of resources and corruption in the Commission was alarming and embarrassing.

    Related to the gross mismanagement of NDDC and resources accruing to the Commission is the bazaar that the Amnesty program, also designed for the Niger Delta, has come to represent. It leaves those interested in the Niger Delta with the impression that either a section of region’s elite is not serious about the area’s development or that Nigeria always foists the worst to lead the agencies to prove that the people are incapable of driving the growth of the region. No one can tell the truth with certainty.

    Some stakeholders believe that the Federal Government is complicit in the disaster that NDDC turned out to be. From funding deficit, undue interference, and weak oversight to the appointment of incompetent and visionless leadership. It conveys the impression that it is set up deliberately to fail. The reality also came to light that NDDC became a contract awarding entity controlled by the great and powerful in Abuja.

    Similarly, some of the region’s elite, who have been directly involved cannot extricate themselves from the looting of resources meant for its development. These individuals from the region have been enmeshed in contract scandals of bourgeoning dimension, thus losing the moral right to hold those in charge at NDDC to account.

    Indeed, at a time, the deluge of malfeasance has led to calls for the scrapping of NDDC. This has far-reaching socio-political and economic implications, which, when examined extensively, will have little benefit. The challenge has nothing to do with the beneficiaries of the intervention, the people of the Niger delta or the justification for this special intervention but rather the current structure, processes, administration, and quality of leadership of the agency.

    In a general sense, underdeveloped societies are often societies where there is poor leadership and where poor management of public resources is prevalent. Niger Delta communities have become prime examples of the “Resource Curse” phenomenon where abundant natural resources often translate to negative net development, especially when we add environmental degradation to the equation. The accruals to NDDC have not maximally benefitted the region’s people. The NDDC has been unable to impact in any structural manner or reverse the appalling human capital development trajectory of the region despite the enormous resources it has commanded in the past 22 years. The serial lack of visionary and accountable leadership in the Commission has left the region in ruins and fractured the people’s dream.

    Therefore, the burden of history has shifted to the new NDDC Board and Executive management. The only option open to the new leaders of NDDC is to break away from that inglorious cycle and restore hope by deliberate positive and inspiring leadership actions that translate good intentions to development results. It is a no-brainer that we expect a lot from the new NDDC regime. It can never be business as usual, and any attempt to continue in the ways of past administrations will attract unwavering condemnation, if not reprisals, from Niger Deltans. And there is justification for this.

    If anything undermines the relative peace in the Niger Delta region presently, especially given the global energy crises orchestrated by the Russian/Ukraine war, the international community will not look at Nigeria favourably.

    The new board came at a time hope was badly needed in the region. They have two options: join in the conspiracy of those raping the area or stand on the side of history as the harbingers of hope. The new NDDC team must seize the moment and put their names on gold. This will only happen through positive transformational leadership that is action-oriented, and that will stay focused on the original mandate and vision of the Commission.

    I am aware that the forensic audit report recommended far-reaching restructuring and reorganisation in the NDDC, and any attempt to delve deeply into them will go beyond the purview of this piece. However, I will recommend that quickly after taking office, they should do the following:

    First, the new team’s immediate mandate is to ensure no restiveness in the region. When the Niger Delta coughs, cold catches the international oil market. Such instability in these very fluid economic realities post covid 19, Russian/ NATO grandstanding, and global economic and political tensions will not be a welcome development. Global energy security is paramount presently.

    The next most important challenge to my mind is to study and restudy the comprehensive Niger Delta development master plan which was funded by the Commission. This will enable the new team to identify cross-cutting areas of priority.

    The third is housekeeping. That is to do things differently from the immediate opprobrious past of the Commission and chart a part for visible and tangible development impact in the region to erase the impression that the people of the area are incapable of driving development. This will demand a complete overhaul of the NDDC structures and processes to make them fit for purpose. The management should adopt a strategy that will make NDDC lean, flexible, dynamic, and able to adapt to the changing external and internal conditionalities shaping our nation whilst still bringing about massive development to the region.

    The next overriding demand is to embark on massive re-orientation amongst the youth and elite about a certain sense of entitlement to share the region’s resources at the expense of actual development. This has been the bane of NDDC. And the perception of NDDC as a cash cow must change at all costs.

    Finally, the worst tragedy that has happened to the Niger Delta region in the past years is the squandered opportunities to lift the living standard of the people. It is, therefore, a no-brainer that the only motivation for the newly inaugurated NDDC leadership should be to make a tangible difference and leave legacies that would be a reference and not extrinsic self-reward. It is time to improve the life of Niger Deltans through the instrumentality of NDDC. It is time that all Niger Deltans will see positive change in leadership approaches, accountability, and probity in the Commission. Although our NDDC dreams are fractured, they are not broken.

  • NEITI report: Reps committee invites NNPC, NDDC, others for investigation

    NEITI report: Reps committee invites NNPC, NDDC, others for investigation

    The House of Representatives ad-hoc Committee on the recovery of outstanding debts owned by the Federal Government Oil and Gas companies in Nigeria, has invited the Nigeria National Petroleum Corporation (NNPC) and many others for investigation.

    Others invited include the Niger Delta Development Commission (NDDC), Federal Inland Revenue (FIRS), Upstream Regulatory Commission, Midstream, Downstream Regulatory Authority, among others.

    This is based on the report of the Nigeria Extractive Industries Transparency Initiative (NEITI) that 77 Oil and Gas companies operating in Nigeria are owing the Federal Government over N2.6 trillion.

    Mr Eric Makwe, the Clerk of the Committee, said this in a statement on Monday in Abuja, against the backdrop of the 2020 NEITI report.

    He said that the invitation was based on the motion at plenary on Nov. 30, 2021, which cited the NEITI report that 77 Oil and Gas companies operating in Nigeria are owing the Federal Government over N2.6 trillion.

    The clerk said the House had urged NEITI, the National Oil Spill Detection Agency (NOSDRA) and the Federal Inland Revenue Service (FIRS) to provide necessary data needed to facilitate recovery of the debts.

    He, however, said that Representative Nkeiruka Onyejeocha, who is heading the 18-member ad hoc committee investigating the matter, assured that it would thoroughly investigate all issues raised in the report.

    According to him, the probe is in respect of outstanding liabilities owed by Oil and Gas which include payments of royalties, levies, rents, concessions, rentals, and penalties.

    Others are taxes, including petroleum profit tax, company income tax, education tax, Value Added Tax, withholding tax, among others.

    Makwe said that the major concern of the lawmakers is on the current poor revenue structure and rising debt profile which the government is contending with.

    He said that the committee had gone into action and is already making interesting discoveries.