By SEBASTINE OBASI, EDIRI EJOH and PRINCE OKAFOR

About N281 billion or $924.2 million in revenues remain un-reconciled due to unresolved issues in the oil and gas sector, the Nigerian Extractive Industries Transparency Initiative, NEITI reports have shown.

File Photo: Crude Oil

The reports spanning 2005 to 2012, indicate that the Federal Government may have lost a huge amount of this money in 2005 with about N179.4 billion unaccounted for within the period. For example, 11 companies were said not to have paid petroleum profit tax, PPT, while 13 companies did not pay their royalties. Also, payments to the Niger Delta Development Commission, NDDC, both in dollars and Naira were unaccounted for just as payment for gas flare penalty was not captured. According to the NEITI audit report of 2005, 11 companies had payments totalling N73.77 million not matched. They include Addax, Chevron, NAOC, Panocean, Phillips and Continental. Others are Brass Exploration, Elf, SPDC and Cavendish.

This is more than the N257.3 billion allocation for the Ministry of Health in the 2016 budget. It is also more than the N232.15 billion combined allocation for the Ministries of Industry, Trade and Investment, Ministry of Information and Culture, Ministry of Justice, Ministry of Labour and Employment, Ministry of Mines and Steel Development and the Ministry of Niger Delta. The figure is based on the current exchange rate of N305 to a dollar.

Commenting on the issue, the immediate past Chairman of NEITI, Ledum Mitee, said that there are aspects of the losses that could be captured when NEITI has the resources. According to him, NEITI is not properly funded, which explains why it is unable to recover such losses as shown in the reports over time.

He said, “Progress was made through the instrumentality of inter-ministerial committees. The constitution of a new board will go a long way in helping to achieve the expected progress.

“Value for money auditing has not been fully carried out due to poor funding of NEITI. The whole chain needs to be audited so as to enable us get value for money. For me, the question is, are we sure we are getting value for oil production? Why is it that the cost of projects in the oil industry in Nigeria is about two times more than it is in a country like Angola? Are we getting value for money?

“This is part of the problem. The cost of running NNPC is huge due to some of these lapses. The cash calls are also huge. The cost is eventually transferred to the federal government. We need a clear-cut audit.”

Speaking on the reports, NEITI’s Director of Communications, Orji Ogbonnaya, said that apart from the unresolved differences, NEITI reports have disclosed $11.6 billion as accruable revenues to the federal government from cases of under payments/under assessments of taxes, royalties, rents, levies, etc. According to him, “The under payments arise largely from questionable interpretation of expired Memorandums of Understanding, MOUs and legal agreements between Nigeria and other companies.

“Out of this amount, over $2.4 billion have been recovered. NEITI is leading inter-agency action to recover the balance. NEITI is also leading advocacy for review of the expired MOUs and agreements.”

When Contacted, SadaIdris and Company Limited, the firm of accountants, which did the audit when these issues were raised, did not respond to calls put to them, neither was the text message sent to them was replied.

Profit tax

The PPT is a taxation of petroleum profit levied on petroleum operations on the difference between the taxpayer taxable income and expense (deductions) allowed in the Petroleum Profit Tax Act in Nigeria. The tax is assessed and collected by the Federal Inland Revenue Service (FIRS).

Between 2006 and 2008, the unresolved differences bothered on royalty, signature bonus and payments to NDDC, all of which totalled N45.7 billion. Specifically, within the period under review, unresolved differences as they pertain to royalty amounted to N22.15 billion, while signature bonus was N16.01 billion. Payments made to NDDC added up to N7.54 billion. 16 companies were identified as being involved in unresolved issues affecting signature bonus. They are Centrica, Starcrest/Addax, Technical Systems Engineering Limited/Sterling Global Oil, Allen Exploration and Production,   Sahara Energy, Tenoil, Bayelsa Oil/TNHP Consortium, INC Natural Resources and Clean Waters. Others are Nigdel United, ONGC Mittal Energy, Transcorp, Petrodel Limited, Essar Energy Exploration and Production, Platinum Petroleum Limited and Global Energy.