NEITI vows to recover IOCs $6.4bn debt with anti-corruption agencies
– Analysts foresee further woes for FG’s oil revenues
The Nigerian Extractive Industries Transparency has warned that it will initiate the implementation of its agreements with anti-corruption agencies in the country on the condition that the Independent Oil Companies with outstanding taxes, royalties and levies of $6.4 billion pay up.
NEITI is Nigeria’s charter of the Extractive Industries Transparency Initiative that seeks to unearth discrepancies in the oil, gas and mineral sectors and improve transparency in resource management and control. The agency’s Executive Secretary, Ogbonnaya Orji stated this recently in Abuja according to a PUNCH report. NEITI had also revealed that the Nigerian National Petroleum Corporation (now Nigerian National Petroleum Company Ltd) was missing 107 million barrels of crude oil in 2019.
Orji, represented by Dieter Bassi, the Director of Technical, NEITI clarified at an event that a large portion of the amounts had been remitted by the defaulting companies. As reported by the PUNCH, “All the companies who still doubt our resolve to sustain this drive, we will not hesitate to activate our standing agreements with relevant anti-corruption agencies to recover the funds,” Orji stated.
He said those entrusted with public funds must not convert the funds to their personal use, stressing that there must be transparency in the use of such resources.
Orji said, “We need fiscal transparency to ensure that public funds are used for the purpose for which they are meant. We need ownership transparency to ensure that those entrusted with public resources do not themselves become the principal beneficiaries of these resources. We also need ownership transparency to ensure that when public resources are stolen, we are able to track and recover them.”
Meanwhile, Nigeria’s oil production continues to lag. According to the latest edition of its monthly oil market report, the Organisation of Petroleum Exporting Countries (OPEC), the country’s output amounted to 1.24 million barrels per day, about 550,000 barrels short of its quota from OPEC and its allies (OPEC+). This is reportedly due to oil theft that has limited the NNPC’s capacity to remit more revenue to the Federal Government amid its high subsidy invoices. Recently, it was revealed that FG was only able to generate 39% of its projected oil revenues for the first quarter of 2021, reportedly N285.38bn.
Analysts at CSL Stockbrokers said in their daily report that the government’s oil revenue estimate would likely underperform for the rest of the year. “While we think the oil prices will end up being higher than the government’s revised expectation of US$73/bbl from the initial US$62/bbl, we do not think that the revised target oil production of 1.6mbpd from 1.88mbpd is achievable. Going by the latest data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the average daily oil production (including condensates) for the first half of the year was 1.48mpd, also lower than the OPEC benchmark of 1.68mbpd in the review period. The perennial issues of pipeline vandalism, theft, and terminal shutdowns have continued to constitute clogs. With no lasting solution in sight to curb this menace in the year, oil production will most likely remain at suboptimal levels for the rest of the year.”
