Nigerian President Goodluck Jonathan received a report today showing Africa’s biggest oil producer may have lost at least $37 billion in revenue over the last decade through underpayments and pledged further investigation.
The losses were from crude sales, royalties and signature bonuses for oil-exploration concessions through collusion between government officials, Nigeria National Petroleum Corp. and people working for its partners, who include Royal Dutch Shell Plc (RDSA) and Exxon Mobil Corp. (XOM), according to the report.
Investigation will show “if it borders on outright stealing,” Jonathan said in Abuja, the capital, while receiving the report. “If there are errors of calculations or maybe misinformation from the relevant agencies of government, that will be sifted out.”
The report, obtained by Bloomberg, was prepared by a team set up by the Petroleum Minister Diezani Alison-Madueke in February. Tony Okonedo, a spokesman for Shell, and Nigel Cookey Gam, a spokesman for Exxon, said their companies will comment after they’ve seen and studied the report.
Shell is the biggest oil operator in Nigeria, followed by Exxon Mobil. Along with Chevron Corp., Total SA and Eni SpA, they run joint ventures with the state oil company, NNPC, that pump more than 90 percent of the country’s oil. Crude exports account for more than 95 percent of Nigeria’s foreign earnings and 80 percent of government revenue, according to the Petroleum Ministry.
Outstanding Royalties
The panel is headed by Nuhu Ribadu, a former chairman of the country’s financial crimes agency and presidential candidate of the opposition Action Congress of Nigeria. It was appointed in line with President Jonathan’s pledge of accountability after a week of strikes and protests in January when he cut fuel subsidies. The subsidies were partially restored and the government said it would probe oil industry spending and revenue to help improve savings.“The federal government should take action and enforce collection of outstanding royalties, petroleum revenue taxes and the various penalties, for example the gas flaring penalties,”Ribadu said. The report’s recommendation will strengthen the government agencies regulating the petroleum industry and “over time, increase revenue,” he said.
Jonathan also received reports from two other panels, one of which audited the four state-owned oil refineries with capacity for 445,000 barrels a day. The refineries are hobbled by inadequate government funding and should be privatized, according to the report.
Refining Capacity
“Existing refineries should be privatized within a set period, and we will be recommending about 18 months since the current ownership and business model have led to the sub-optimal performance of the refineries,” said Yusuf Alli, who headed the panel.Africa’s most populous nation, with more than 160 million people, relies on imports for 70 percent of its fuel needs because of inadequate refining capacity, according to the petroleum minister. Nigeria exchanges 60,000 barrels a day of crude for products with Trafigura Beheer BV and a similar amount with Societe Ivoirienne de Raffinage’s refinery in Ivory Coast, according to NNPC.
To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net
To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net
No comments:
Post a Comment