The Nigerian Extractive Industries Transparency Initiative (NEITI) is lamenting the loss recorded in the Nigeria downstream and midstream sector. Many international oil companies and big firms are gradually divesting from the downstream sector because of the problems of oil theft and vandalism.
Orji Ogbonnaya Orji, the executive secretary of NEITI, disclosed this in Abuja on Monday.
He explained that oil theft is a huge problem that is currently depleting the nation’s revenue in downstream and midstream operations.
“Many IOCs and big firms are gradually divesting in the downstream sector because the problems of oil theft, vandalism, and deliberate sabotage have been quite difficult to manage,” Orji said.
“This is in spite of the efforts by various security agencies to secure these huge investments. Many that can afford it, because it is very capital intensive, are moving upstream. And that’s why you see revenues from PSCs outstripping returns from JV.”
In the last five years (2015 – 2019), Nigeria has lost about 260.15mmbbls to crude oil theft, Orji revealed.
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Orji said following the public disclosure made earlier on the 77 companies indebted to the Federal government to the tune of N2.6trillion, many companies have been rushing to the relevant government agencies to either pay up or ascertain the status of their liabilities.
He commended the effort of the House of Representatives for rising to the occasion, by pushing the issue as a motion, passing it and setting up an ad-hoc committee to investigate the issue.
“A public hearing on that disclosure from NEITI begins on Tuesday, March 1. I applaud the Speaker, the House leadership and the members for this exemplary role expected of the legislature in Section 4 (3) & (7) of the NEITI Act. NEITI will be there to help the committee in this investigation,” he said.
“This is our impact on revenue generation for the government. However, our 2020 report to be released on the 7th of March will provide updates.”
Speaking on the payment made thus far, Orji explained that NEITI does not collect or keep government revenues, but relevant government agencies do.
“For taxes such as PPT, CIT and VAT, it is the FIRS that collects them while for royalty payments, DPR now part of the Nigeria Upstream Petroleum Regulatory Commission collects the payments,” he said.
