The federal government’s ability to generate revenue is under threat as the Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed significant debts owed by oil and gas companies operating in the country.
According to NEITI’s ‘2022/2023 Independent Oil and Gas Industry Report,’ released in Abuja on Thursday (today, September 27), these companies owe the government $6.071bn and N66.4bn in unpaid revenues as of June 2024.
In his opening remarks, NEITI’s Executive Secretary, Dr. Orji Ogbonnaya Orji, emphasized the need for improved compliance with regulatory frameworks and greater transparency within the industry, noting that the report highlighted several key issues, including revenue leakages, lapses in regulatory adherence and recommendations for enhancing transparency in oil and gas operations.
Breaking down the debt, NEITI revealed that $6.049 billion and N65.9 billion in unpaid royalties and gas flare penalties were due to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as of August 31, 2024. Additionally, outstanding Petroleum Profit Taxes (PPT), Company Income Taxes (CIT), Withholding Taxes, and Value-Added Tax (VAT), totaling $21.9 million and N492.8 million, were owed to the Federal Inland Revenue Service (FIRS) as of June 2024.
The report also highlighted a significant reduction in petrol importation, which fell from 23.54 billion liters in 2022 to 20.28 billion liters in 2023. NEITI further noted that N15.87 trillion was claimed as under-recovery or price differentials between 2006 and 2023, with the highest amount, N4.71 trillion, recorded in 2022.
Regarding crude oil production, fiscalized crude production in 2022 was 490.945 million barrels, an 11% decline from 556.130 million barrels in 2021. However, NEITI’s 2023 report showed an increase to 537.571 million barrels, a rise of 46.626 million barrels or 9.5% from the previous year. A 10-year trend (2014–2023) revealed that the highest crude production volume, 798.542 million barrels, was recorded in 2014, while the lowest, 490.945 million barrels, occurred in 2022.
In terms of crude oil lifting, 534.159 million barrels were lifted in 2023, compared to 482.07 million barrels in 2022 and 551 million barrels in 2021. The report also highlighted a sharp decline in oil theft and crude losses, with 7.68 million barrels lost or stolen in 2023, marking a significant 79% reduction compared to the 36.69 million barrels lost in 2022.
On overall revenue generation, material companies contributed $15.549 billion (96%) in 2022, while non-material companies accounted for $695.604 million (4%). In 2023, material companies generated $21.415 billion (95%), with non-material companies contributing $1.238 billion (5%).
Revenues came from 17 identified sources, including taxes, oil and gas sales, NLNG dividends, royalties, signature bonuses, gas flare penalties, and concessions.
