Nigeria still owed $7.8 billion in unpaid oil taxes by oil companies

February 12, 2014 | Government & Regulations

Diezani K. Alison-Madueke - World Economic Forum on Africa 2012

Nigerian Petroleum Resources Minister, Diezani Alison-Madueke

Lagos, Nigeria – Oil companies operating in Nigeria still owe the government $7.8 billion in unpaid taxes, royalties and signature bonuses, the country’s oil industry auditors said Wednesday, adding that the Nigerian government has now directed the Nigerian National Petroleum Corporation (NNPC) and other  relevant revenue agencies to recover the money.

In 2012, the Nigeria Extractive Industries Transparency Initiative in an audit report covering 2009-2011 said that oil and gas companies operating in the West African country owed the government $9.6 billion in unpaid or underpaid taxes and royalties. It did not name the companies involved.

Since then, only $1.8 billion has been recovered from the companies, a NEITI spokesman said Wednesday.

In a statement Wednesday, NEITI said that it has requested support from the Nigerian petroleum resources minister Diezani Alison-Madueke to recover the money and also compel oil producing companies in the country to comply with global standards which demand full disclosure of ownerships and contract transparency in transactions.

“[The minister has] directed Nigerian National Petroleum Corporation, the Department of Petroleum Resources and all other [relevant] agencies to recover these funds, [and] to work closely with NEITI for early recovery and remittances of these funds to the federation account,” NEITI said.

International oil companies (IOCs) operating in Nigeria include Shell, Chevron, ExxonMobil, Eni and Total.

Meanwhile, NEITI said Wednesday that it has started a similar audit for 2012, and the results would be made public within nine months.

The audit will cover oil companies’ tax and royalty payments to the government, checks on crude oil production and coastal liftings, and subsidy payments.

“The exercise also involves amongst others checking of the amount of crude oil exported, sales and utilization of gas, refinery balances, petroleum products importation and distribution,” NEITI said.

Industry analysts said they expect the latest NEITI audit to settle the controversy over the whereabouts of the alleged missing $20 billion in oil export revenue, which the country’s central bank has accused NNPC of withholding from the $67 billion it earned from crude oil sales between January 2012 and July 2013.

NEITI had said in 2012 that state-owned NNPC failed to remit into federation account $3.996 billion of oil and gas revenue earned between 2009 and 2011.

Nigeria, Africa’s top oil producer, produces more than 2 million b/d of crude.