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SEATTLE (Oil Monster): A legal battle has begun to recover huge funds lost to alleged under-remittance and diversion of oil/gas royalties and taxes by some major oil companies.
The Federal Government has sued four oil companies, accusing them of not being transparent in reporting their production activities, engaging in under-remittance of taxes and oil/gas royalties and in some cases, diverting such funds to private coffers.
Sued before the Federal High Court, Abuja, are Nigerian National Petroleum Corporation (NNPC), Nigerian Agip Oil Exploration Company (NAOC-ENI), Shell Petroleum Development Company (SPDC) and Nigeria Petroleum Development Company (NPDC).
The companies are sued with their “agents or assignees” in the four suits before Justice John Tsoho, but initiated by the Special Presidential Investigatory Panel (SPIP) on the recovery of public property, led by Okoi Obono Obla.
The government is accusing NNPC of diverting huge funds remitted to it by its agents or assignees as taxes and royalties.
In a supporting affidavit, the plaintiff accused NNPC of failing to remit the taxes paid to it by Agip, which operated the Aboh Field between 2007 and 2016. It is estimated at $148,326,339.09.
The affidavit reads: “All indicated tax oil allocations form legitimate computations, were released to and all collected by the NNPC on judiciary and for the sole purpose of paying the required financial and financial obligations to the Federal Government designated Crude Oil Royalty Tax Account No: 802906875 domiciliated at the Central Bank of Nigeria (CBN) and described as such, the sum of $148, 326,339.09.”
The plaintiff stated that money was never remitted into the Federal Government’s account, but instead, “concealed and diverted to the use of persons employed as officials and public servants within the NNPC and faceless syndicates at both the CBN, serving and or retired as to date”.
It added that the same “unethical practices were found as NNPC employees concealed and diverted to persons, using accruing royalty tax on crude oil, omitted to remit same from 2007 – 2016, as received from operators of Bong FPSO and holders of PSC to the tune of $44,755,903.99”.
The plaintiff stated that information to this effect, which could be “detected from records in the SPDC (Shell Petroleum Development Company), and even the Department of Petroleum Resources (DPR), was concealed by both internal and external auditors, without audit query through indicated reported period”.
It claimed that a thorough examination of NNPC’s books would reveal additional $1,195,481.85 “concealed and diverted to personal use to others than paid into public pool in designated account at the CBN”.
The plaintiff accuse Agip of not being transparent in reporting its production activities in relation to Oil Mining Lease (OML) 60 and 61, comprising 66 oil wells at Udaga farm land, Oguta Local Government Area, Imo State.
The plaintiff, who identified the 66 oil wells, stated that Agip has consistently failed to comply with “extant laws on Royalty Taxation, Crude Oil Revenue Royalty Taxes, Deep Water and Inland Water Basin Drilling Law 1969 and had effected, uttered incorrect entries as to daily production volume from indicated wells in OML 60 and 61.
The plaintiff raised similar allegations against Shell in relation to its operations in OML 20 comprising 40 oil wells.
It alleged that Shell has also consistently failed to abide by extant laws on Royalty Taxation, Crude Oil Revenue Royalty Taxes Deep Water and Inland Water Basin Drilling Law 1969 and “had effected, uttered incorrect entries as to daily production volume from indicated wells in Oil Mining Lease, alongside non remittance, underpayment and diversion of Petroleum Profit Tax and VAT for a number of years.
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