Nigerian President Umaru Musa Yar’Adua has ordered the Nigerian National Petroleum Corporation (NNPC) to take immediate steps to recover outstanding payments of US$ 1.91 billion due to the Federal Government from Shell and Exxon Mobil on the Production Sharing Contracts (PSCs) for the Bonga and Erha oilfields.
Acting on the recommendations of the committee established by his administration to determine whether any revenue opportunities have been lost by Nigeria in the implementation of the PSCs for the two deep-offshore oil fields which account for about 20 per cent of the country’s total oil production, President Yar’Adua directed as follows:
That the total sum of US$ 1.496 billion accruable to the NNPC based on the proper application of the PSC’s Capital Allowance should be recovered. This sum is made up of US$ 850 million from Bonga and US$ 646.3 million from Erha.
That the sum of US$ 414.6 million accruable to the NNPC and to Government from Bonga gas sales and as tax revenue from the gas sales should be recovered.
And that all future Government Gas Sales Agreements should account for Natural Gas Liquids (NGLs) to ensure that Government derives maximum economic benefits from them and that this position be adopted in the renegotiation of all existing PSC Agreements which are due for renegotiation.
According to the Presidential spokesman Segun Adeniyi, President Yar’Adua has also directed that the Federal Inland Revenue Service should pursue the company income tax payments due from Shell Nigeria Exploration and Production Company and Esso Exploration and Production Nigeria Limited on the operation of the Bonga and Erha oilfields.
While receiving the report of the committee chaired by his Special Adviser on Petroleum Matters, Dr. Emmanuel Egbogah, the President reaffirmed his commitment to establishing full accountability and transparency in the operations of Nigeria’s oil and gas sector.
He said that his administration would continue to do everything possible to ensure that Nigeria derived maximum economic benefits from the exploitation of God-given resources and that the revenues so derived are properly utilised to enhance the living conditions of all Nigerians.
The President will soon unveil his broad agenda for the total restructuring of the oil and gas sector in line with his vision to turn it from a mere extractive industry to one that adds tangible values to the overall economy of the country, the statement added.