Oil Companies face 72-Hour ultimatum over $506 Million Unremitted royalties

The House of Representatives Public Accounts Committee (PAC) has issued a 72-hour ultimatum to eight oil companies to appear and address allegations of failing to remit $506 million to the Federation Account.

This directive follows the companies’ absence at a scheduled hearing on Monday, organized by a subcommittee investigating the non-remittance of ₦9.4 trillion in royalties, concession rentals, and gas flare penalties.

The investigation stems from the 2021 audit report by the Office of the Auditor General for the Federation, which indicted 23 oil companies for unpaid royalties owed to the government since 2021.

Despite clear provisions in the Petroleum Industry Act mandating payment within 30 days, many of these debts remain unsettled. The PAC has warned that failure to comply with the summons could lead to further actions.

Only one of the nine companies, Belemaoil Producing Ltd, honoured the invitation, while Addax Petroleum Exploration Nigeria Ltd, AITEO Group, All Grace Energy, Amalgamated Oil Company Nigeria Limited, Amni International Petroleum Development Company Limited, Bilton Energy Limited, Britannia-U, and Waltersmith Petroman Limited failed to show up.

Chairman of the Investigation Sub-Committee, Hon. Isiaq Akinlade said that the committee’s summons came at a time when the Nigerian government was grappling with a significant budget deficit, having just approved a budget of 54.9 trillion naira.

He said the refusal of these oil companies to settle their debts raises concerns about the government’s ability to meet its fiscal targets and adequately fund critical national projects.

According to him, “How do we fund this budget if these companies continue to refuse to settle their obligations as at when due? Their actions undermine the fiscal integrity of the Federation and delay the progress of national development.”

A representative from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr. Balarabe Haruna presented the details of the companies’ outstanding debts to the Federation Account, which amounted to a substantial total of $506,565,187.96. The breakdown is as follows:

“For Britannia-U OML, the company owes $1,062,417.03 for crude oil by price and $584,227.55 for crude oil by production, bringing the total to $1,646,644.58.

Waltersmith OML 16 has a total debt of $8,739,281.20, which includes $2,844,273.48 for crude oil by price, $5,277,193.41 for crude oil by production, $372,078.31 for gas flares, and $245,736.00 for concession rentals.

All Grace Energy OML 17 owes a total of $2,043,083.98, consisting of $812,804.88 for crude oil by price, $533,301.40 for crude oil by production, and $696,977.70 for gas flares.

Amni International Petroleum has an outstanding debt of $434,948,763.41, with $433,246,518.83 owed for crude oil by production, $1,668,090.00 for gas flares, and $34,154.58 for concession rentals.

He added, “For Amalgamated Oil OML 156, the company’s debt includes $2,088.91 for concession rentals and $226,423.83 for gas sales, totaling $228,512.74.

Belemaoil owes a total of $1,703,617.68, made up of $977,793.54 for crude oil by price, $511,870.14 for gas flares, and $213,954.00 for concession rentals.

AITEO has a debt of $34,861,202.49, consisting of $27,197,780.87 for crude oil by price, $139,308.15 for gas sales, $7,381,653.47 for gas flares, and $142,460.00 for concession rentals.

Addax Exploration OML 126 owes $17,575,991.14, with $17,447,255.24 for gas flares and $128,735.90 for concession rentals.

Finally, Bilton owes a total of $5,044,514.57, made up of $4,123,850.60 for crude oil by price and $920,663.97 for gas flares,” he explained.

The total outstanding debts from the aforementioned oil companies amount to $506,565,187.96, underscoring the significant financial burden on the Federation.

Companies expected to appear before the committee on Tuesday are Chevron Nigeria Ltd (OML 90, 95, 49), Chorus Energy, Conoil Plc, Continental Oil & Gas Company Ltd., Dubri Oil Company Limited, Enageed Resources Limited, Shell Nigeria Exploration and Production Company, Energia Limited, Eroton Exploration & Production Company Limited, and Dubri Oil Company Limited.