The Federal government earned a total sum of $34.28 billion from the oil and gas sector operations in 2019.
This was disclosed Tuesday by the Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Dr. Orji Ogbonnaya Orji, at the official presentation of the 2019 Report in Lagos.
Orji said crude oil sale alone accounted for $7.011 billion while receipts in gas sale amounted to $1.476 billion, adding that $8.487 billion of the total receipt came from the sale of oil and gas.
He explained that of the 88 companies and the NLNG, 82 companies made payments in 2019. The remaining seven companies did not make payments because they were not in operations as at that time.
“Furthermore, a total of nine government entities that directly collect revenue and participate in the industry are covered in the Report.
NEITI Reports for 2019
“In the report, government receipts were $34.28 billion in total revenue from the oil and gas sector – out of which company level financial flows by revenues streams was $18.96 billion and flows from federation sales of crude oil and gas was $15.32 billion.
“Out of the $34.281 billion total government revenue from the sector; $18.14 billion (52.92 per cent) was transferred into the Federation Account, $6.55 billion (19.11 per cent) into the Cash-cal account and $5.58 billion (16.28 per cent) into NNPC designated accounts.
“Furthermore, $2.82 billion (8.24 per cent) was transferred into third parties’ project financing accounts while $1.18 billion (3.45 per cent) were sub-national transfers.
Sub-national transfers are payments made to state IRS, NDDC, Nigerian Content Development and Minister Biard (NCDMB), and Federal Ministry of Finance (FMF), in addition to $5.58 billion in NNPC designated accounts, $229.449 million (N70.21 billion) was downstream deductions on domestic sales.
Orji said Nigeria needs to learn to manage its natural resources effectively and efficiently in order to combat poverty.
According to the NEITI boss, the agency has conducted twelve cycles of audits in the oil and gas sector covering the periods 1999-2019 and has also conducted the first mineral sector audit from 2007-2010.
He added that NEITI has also conducted two cycles of audits that focus on the allocation, statutory disbursements and utilisation of revenues from the federation account to the three tiers of government.
“I am optimistic that if the contents of these reports are reviewed by various stakeholder groups of NEITI and the recommendations implemented by the covered entities concerned, Nigeria’s oil and gas industry will witness massive investments, with revenues from the sector maximised to uplift the standards of living of the citizens,” he said.
In a sub-presentation, the Director, Technical, Dr. Dieter Bassi, disclosed that sevarl operators in the country’s mining industry underpay royalties to the government, while also overstretching their exploration licenses.
He said under the mining law, operators with exploration licenses are not supposed to engage in mining as many companies are taking advantage of the unregulated mining industry.
“The major operators are unregulated and to trace these companies is quite difficult and some of the companies are operated by foreigners. Getting the report on this sector ready was quite difficult,” he said.
Bassi said the report revealed that many companies in the sector have multiple Tax Identification Numbers (TINs), which suggests that they are not good corporate citizens and are not remitting to the Federal government.
“We also found out that many companies were operating under different licenses…
“But we find companies that have overstretched their exploration licenses and have been mining and it means they are not remitting to the government’s purse,” he added.
The Assistant Director, Oil and Gas, NEITI, Mr. George Abiye, while delivering the oil and gas report, said from the total 735.661mmbbls crude oil lifted, companies lifted 469.01mmbbls. He stressed that the remaining 266.65mmbbls was lifted by Nigerian National Petroleum Corporation (NNPC) valued at $17.441 billion.
He noted that of the $17.441 billion, $2.757 billion was sale receivables while the remaining balance of $14.684 billion was cash receipt from 2019 sales.
He added that in addition to the cash receipts, a total of $3.518 billion accrued as receipts from sales proceeds from federation equity crude, profit oil and in-kind payments.
“The $3.518 billion is made up of $1.249 billion undistributed balance from 2018 and $2.268 billion prior year receivables. A total of $18.202 billion was the aggregate cash receipts for 2019,” he said.