The Nigeria Extractive Industries Transparency Initiative (NEITI) released its 2020 audit report on Monday, revealing that 51 oil and gas corporations owe the Federal Government $3.17 billion in total (N1.32 trillion).
Revenue fell by 40% in the year under review, according to the report.
NEITI 2020 oil and gas industry report, the latest of its financial indicators in the oil and gas industry was unveiled in a public presentation of the oil, gas, mining sector’s operation and the fiscal allocation and statutory disbursement.
It also stated that the number of defaulting enterprises decreased from 77 in 2019 to 51 in 2020, as reported by NEITI.
Dr. Orji Ogbonnaya Orji, the NEITI’s Executive Secretary, said that companies’ liabilities to the Federation as of “December 31, 2020 were N1.32 trillion or $3.17 billion, compared to the N2.6 trillion owed in 2019.”
The current obligations, he explained, are collectible income owing to the Federation from the Department of Petroleum Resources and the Federal Inland Revenue Service.
The reports outlined specific revenue streams that accounted for the liabilities in question, including royalty oil, royalty gas, concession rentals, Petroleum Profit Tax, Company Income Tax, Education tax, Value Added Tax and Withholding Tax among others.
The NEITI boss explained that “the courageous public disclosure of companies’ liabilities to the Federation by NEITI was in line with its national mandate and in fulfilment of its obligation as a member of the global Extractive Industries Transparency Initiative (EITI), and not in any way against the companies.
“NEITI’s disclosure seeks to draw the attention of the oil and gas companies to their obligations to remit all revenues due to government, especially at this time that government is in dire need of revenues to rebuild the nation’s infrastructure and improve the investment climate in the country’.
Orji described the companies as the backbone of the industry. “Without the companies there will be no industry, no investments and no revenues to remit”. So NEITI will continue to support the companies and also expect that they live up to their obligations, as regard to payment of taxes, royalties and levies to the Federation, as they do in other jurisdictions of their operations.
The NEITI 2020 oil and gas report also revealed that Nigeria earned $20.43billion from the oil and gas sector in 2020. The figure represents a decline of 40 percent compared to th 34. 22billion realized from the sector in 2019.
On remittances to the Federation Account from the oil and gas sector, the report disclosed that $14.65billion, representing 71.17 percent of the total earnings in 2020, was remitted to the account, while total aggregate financial flows from the oil and gas sector government in ten years (2011-2020) was $394.029 billion.
The report also revealed that the total crude oil production in 2020 was 646.7mmbbis, representing a 12 percent decrease when compared to the 735.24 mmbbls produced in 2019.
On domestic crude allocation and consumption, the NEITI report also disclosed that 107.746mmbls was managed by the NNPC under the Direct Sale Direct Purchase arrangement. also revealed that the value of the crude exchanged under the DSDP arrangement was $6.7billion, while the value of the refined products received for local consumption was $6.03billion, indicating a variance of $134.78million.