Nigerian Authorities Questioned over 'Missing Royalties'

Nigeria’s Department of Petroleum Resources, part of the petroleum ministry, has issued a statement denying allegations that it withheld funds emanating from Nigeria LNG, state producer Nigerian National Petroleum Corporation (NNPC), and several other upstream companies.

According to the DPR, several reports from government agencies including the Nigerian Extractive Industries Transparency Initiative (NEITI) have stated that the companies failed to remit $950mn of royalties to Nigeria’s federation account between 2011 to 2014. The reports came from an outcome of a meeting of an ad-hoc committee of the House of Representatives examining claims that $17bn was missing from federation accounts because of undeclared crude oil and LNG revenues.

The same committee last week summoned the DPR to defend itself against the accusations. DPR planning chief Folashade Odunaga told it that it was no fault of her office if several international oil companies (IOCs) fail to remit funds to the government. No IOCs were cited during the proceeding.

However, the statement issued by DPR says it does not physically collect royalty payments or other forms of revenue on behalf of the government and does not remit payments or keep accounts in same respect; instead DPR ensures that all royalty payments and other accruable revenues to the government are paid directly into the federation account by Nigeria’s upstream operators and equity holders.

NNPC management will meet November 27 with the Federation Accounts Allocation Committee (FAAC) in order to reconcile financial records. NNPC says any inconsistencies may, or may not, be an issue of interpretation of data. FAAC members include finance minister Kemi Adeosun, and the federation’s accountant general Ahmed Idris, plus representatives of government revenue-generating agencies.