• Home
  • Anti-Corruption
  • Fact-Check
  • Economy
  • National
    • Government
  • Security
  • Features
  • State
  • Event
    • PR Nigeria Award
  • E-Paper
Search
  • Home
  • About
  • Adverts
  • Contact
Sign in
Welcome! Log into your account
Forgot your password? Get help
Password recovery
Recover your password
A password will be e-mailed to you.
PRNIGERIA PRNigeria News
PRNIGERIA PRNIGERIA
  • Home
  • Anti-Corruption
    • Chinese nationals jailed in Lagos

      Court Jails Nine Chinese Nationals for Cybercrime in Lagos

      ASUU

      Tackle Corruption, Institutional Decay – ASUU Charges FG

      EFCC Arraigns Bauchi Accountant General Over N8bn Fraud as Court Sentences…

      PRNigeria logo fearured image

      EFCC Arraigns Ex-Convict, Other for Naira Abuse in Lagos

      EFCC Arrests 37 Suspected Internet Fraudsters in Ilorin

  • Fact-Check
  • Economy
    • Acting Controller General of Customs, Nigerian Customs Services, NSC, Ag. CG Bashir Adewale Adeniyi

      Customs Exposes Scam Over Form M Migration to B’Odogwu Platform

      CBN

      The Facts About Nigeria’s Debts Burden Under Tinubu’s Watch By Zekeri…

      Ibrahim Yahaya Dandakata of Arewa Economic Forum AEF

      AEF Slams CBN’s New BDC Policy, Cites Threat to Northern Economy…

      Google Search Tech Digest

      7 Smart Google Search Tips That Will Save You Hours By…

      U.S. VISA

      REVEALED: Why US Reduced Visa Validity for Nigerians to 3 Months…

  • National
    • Late President Muhammadu Buhari

      The Passing of a Mighty Warrior by Chief Femi Fani-Kayode

      Secretary to the Government of the Federation

      SGF Akume Leads Presidential Committee for Buhari’s State Funeral

      Late President Muhammadu Buhari

      Northwest Governors Mourn Buhari, Declare Tuesday Public Holiday

      FG Declares Tuesday Public Holiday in Honour of Late Ex-President Buhari

      Yahaya Bello Mourns Passing of Buhari and Awujale of Ijebuland

    • Government
      • Kano Gov Appoints Yusuf Sharada Special Adviser on Digital Economy

        Kogi SEMA To Establish Emergency Operation Centre

        Late President Muhammadu Buhari

        The Passing of a Mighty Warrior by Chief Femi Fani-Kayode

        Secretary to the Government of the Federation

        SGF Akume Leads Presidential Committee for Buhari’s State Funeral

        Late President Muhammadu Buhari

        Northwest Governors Mourn Buhari, Declare Tuesday Public Holiday

  • Security
    • Kogi SEMA To Establish Emergency Operation Centre

      Police Arrest 6 Suspected Armed Robbers in Benue, Recover Firearm, Motorcycle

      Police Officer

      Police Arrest Suspects for Human Trafficking, Rescue Victims in Anambra, Enugu,…

      Police Raid IPOB/ESN Enclave, Arrest 6 Suspects in Enugu

      NDLEA Logo

      NDLEA Arrests Notorious Drug Kingpin, Uncovers Cocaine, Destroys Over 28,000kg Skunk…

  • Features
    • Late President Muhammadu Buhari

      The Passing of a Mighty Warrior by Chief Femi Fani-Kayode

      President Muhammadu Buhari

      Buhari in his Own Words By Kabir Akintayo

      Fame, Fortune, and Fallout: The Peller Paradox By Haroon Aremu Abiodun

      Officers of NSCDC Mining Marshals

      Alake’s Verdict on Mining Marshals By Abdullahi O Haruna Haruspice

      CBN

      The Facts About Nigeria’s Debts Burden Under Tinubu’s Watch By Zekeri…

  • State
    • Kano Gov Appoints Yusuf Sharada Special Adviser on Digital Economy

      Kogi SEMA To Establish Emergency Operation Centre

      Police Arrest 6 Suspected Armed Robbers in Benue, Recover Firearm, Motorcycle

      Police Officer

      Police Arrest Suspects for Human Trafficking, Rescue Victims in Anambra, Enugu,…

      Late President Muhammadu Buhari

      UPDATE: Buhari’s remain for burial Tuesday 2pm – Gov Radda

  • Event
    • Late President Muhammadu Buhari

      Northwest Governors Mourn Buhari, Declare Tuesday Public Holiday

      Late President Muhammadu Buhari

      UPDATE: Buhari’s remain for burial Tuesday 2pm – Gov Radda

      Alhaji Ibrahim Musa Suleja

      NIPOST Appoints Ibrahim Musa Suleja Director of Corporate Communications

      Asiwaju Adegboyega Solomon Awomolo

      47 Years of Excellence: Honoring Asiwaju Awomolo, SAN

      NCoS inmates

      58 Inmates in Kano Sit for 2025 NECO Exams, Thanks to…

    • PR Nigeria Award
  • E-Paper
Home Economy NEITI Urges Review of Oil Producing Agreements
  • Economy

NEITI Urges Review of Oil Producing Agreements

By
Orji Ogbonnaya Orji
-
June 24, 2018

NEITI Urges Review of Oil Producing Agreements
The Nigeria Extractive Industries Transparency Initiative (NEITI) has alerted the nation on the urgent need to review the Deep Offshore and Inland Basin Production Sharing Agreement between Nigeria and oil companies.

NEITI says that the urgency to review the obsolete legislation without further delay is in view of the revenue losses to the federation by the use of the old agreement in computation of revenues to be shared between the government and oil companies.

NEITI recalls that the Deep Offshore and Inland Basin Production Sharing Contracts Act of 1993 provides for: “ a review of the terms when prices of oil crosses $20 in real term; and a review of the terms 15 years after operation of the agreement and five years subsequently”.

NEITI however observed with concern that Nigeria is yet to adhere to this important provision even now that the price of oil is revolving around $70 per barrel.

In an Occasional Paper released by NEITI which reviewed three years of NNPC’s financial and operations reports, NEITI has noted that crude oil production under the Production Sharing Contracts (PSCs) has since overtaken production under the Joint Venture arrangements.

A careful look shows that Production Sharing Contracts (PSCs) accounted for 44.8% of total oil production while the Joint Ventures (JVs) contributed 31.35%.

A historical analysis of this development by NEITI shows that JV Companies accounted for over 97% of Production in 1998 while PSCs contributed only 0.50%. This trend continued until 2012 when PSCs accounted for 37.58% while JVs contributed 36.91%. From the publication  in 2013, PSCs contributed 39.22% while JVs contributed 36.65%, 2014: PSCs; 40.10% and JVs 32.10%; 2015: PSCs 41.45% and JVs 31.99% while in 2017 the contributions stood at PSCs 44.32% and 30.85% respectively.
The NEITI Occasional Paper further explained that: “Other companies, comprising Nigerian Petroleum Development Company (NPDC), Alternative Financing (AF), and Independent/ Marginal Fields contributed 2.39% to total production in 1998 and by 2017 this had risen to 24.83%. This figure clearly shows the changing structure of oil production in Nigeria, where PSCs (which contributed a mere 0.5% to total production 20 years ago) have dramatically overtaken JVs (which contributed 97% to total production 20 years ago)”.

Between 2015 and 2017 covered by NEITI’s Occasional Paper review of NNPC Report, Nigeria produced 2.126 billion barrels of crude oil and condensate.

A Further review of the NNPC Report shows that:  “Production was highest in 2015 with 775.6million barrels produced. Production was lowest in 2016 with 661.1million barrels produced, while production in 2017 was 690 million barrels. 2016 was a difficult year for oil production because production was shut in a number of oil terminals”.

NEITI’s major concern is that now that the PSCs account for about 50% of total oil production and major source of revenues, the delay or failure to review and renew the agreement means that payment of royalty on oil production under PSCs would not be made while computation of taxes would be based on the old rates.

Read Also:

  • Kano Gov Appoints Yusuf Sharada Special Adviser on Digital Economy
  • Kogi SEMA To Establish Emergency Operation Centre
  • The Passing of a Mighty Warrior by Chief Femi Fani-Kayode

On lifting of crude oil, the NNPC Monthly Financial and Operations Report disclosed “international oil companies (IOCs) lifted more crude oil than the government. Total lifting of crude oil and condensates was 2.135 billion barrels. Of this sum, IOCs and Independents lifted a total of 1.367 billion barrels, while government’s lifting by NNPC was 721.16 million barrels. This means that the operators lifted 64.01% of total crude lifting’s, while government through NNPC lifted 33.76%. When expressed in monetary terms, total government lifting of oil amounted to $35.893 billion while the figure for IOCs and Independents was $68.591 billion”

The NNPC Report further disclosed that refineries received 15.15% of total domestic crude lifting out of which 41.32% was utilized under the Direct Sale Direct Purchase (DSDP) program of NNPC.

On Refineries and domestic crude utilization, the report disclosed that for the 3yrs under review, Nigeria’s refineries recorded an average capacity utilization of 12.26%.  A further breakdown shows that Kaduna refinery had the lowest capacity utilization of 9% while Warri and Port Harcourt recorded 9.73% and 15.4% respectively.

One striking feature of the NNPC financial operations report is the disclosure that the Corporation lost the sum of N547billion in its operation between 2015 and 2017. Out of this amount, the NNPC Corporate Headquarters recorded the highest revenue loss to the tune of N336.268billion.

On the contrary, the Report revealed that the Nigeria Gas company made a huge profit of N141.324billion.

While NEITI applauds the Monthly voluntary disclosures by the NNPC, it is important to note that NEITI through its auditors under the EITI framework has not independently verified the information and data from the NNPC reports.

“NEITI has not, except for the year 2015, independently validated the data from NNPC. This will be done in ongoing and future reconciliation reports. What has been done here is a preliminary analysis of the data that NNPC has made available for the three-year period.  The figures examined here do not represent the sum total of all revenues from the sector, as other payment streams like royalties and taxes from JVs, signature bonuses, transportation rental fees, NESS fees, penalties and others are not covered by the NNPC financial and operational reports”  the NEITI Report concluded.

NEITI however commended the NNPC for the reconciliation of the crude swap under-delivery transaction executed during the crude- for- product- swap. NEITI also urged the Corporation to sustain the new spirit of openness while encouraging the citizens to use the information and data from the NNPC’s disclosures to promote public debate required in implementing the on-going reforms in the extractive sector.

The NEITI Occasional Paper series which reviewed the 3 years of NNPC operations and financial reports is the third in the series. In the pursuit of EITI global Open Data Policy, NEITI has data set for the three years (2015 -2017) in excel format readily available on its website in support of public interest, analysis and debate. NEITI has also began a process of building a model to calculate the extent of losses as a result of failure to review the PSCs agreement as at and when due.

Dr. Orji Ogbonnaya Orji
Director, Communications and Advocacy

VISIT OUR OTHER WEBSITES
PRNigeria.com EconomicConfidential.com PRNigeria.com/Hausa/
EmergencyDigest.com PoliticsDigest.ng TechDigest.ng
HealthDigest.ng SpokesPersonsdigest.com TeensDigest.ng
ArewaAgenda.com Hausa.ArewaAgenda.com YAShuaib.com
  • TAGS
  • NEITI
  • NNPC
  • NPDC
  • Oil Producing Agreements
  • psc
Previous articleMinister Unveils Plan To Upgrade Health Facilities In Kano
Next articleWhy We Didn’t Attend APC National Convention- Kwankwaso
Orji Ogbonnaya Orji
Orji Ogbonnaya Orji

RELATED ARTICLESMORE FROM AUTHOR

Acting Controller General of Customs, Nigerian Customs Services, NSC, Ag. CG Bashir Adewale Adeniyi

Customs Exposes Scam Over Form M Migration to B’Odogwu Platform

CBN

The Facts About Nigeria’s Debts Burden Under Tinubu’s Watch By Zekeri Idakwo Laruba

Ibrahim Yahaya Dandakata of Arewa Economic Forum AEF

AEF Slams CBN’s New BDC Policy, Cites Threat to Northern Economy and National Security

Google Search Tech Digest

7 Smart Google Search Tips That Will Save You Hours By Shuaib S. Agaka | Tech Digest

U.S. VISA

REVEALED: Why US Reduced Visa Validity for Nigerians to 3 Months in Reciprocal Policy Shift

Comptroller General Nigerian Customs Bashir Adewale

Nigeria Customs Takes Anti-Money Laundering Fight to the Skies

Comptroller General Nigerian Customs Bashir Adewale

Nigeria Customs, ICPC and the Audit of Conscience

Customs Diplomacy: Nigeria, Saudi Arabia Ink Mutual Assistance Deal

Comptroller General Nigerian Customs Bashir Adewale

Nigeria, Belarus Forge Alliance to Combat Smuggling, Facilitate Trade

President Bola Ahmed Tinubu and CG Customs, Bashir Adewale Adeniyi

Tinubu Hails Customs Boss Wale Adeniyi on Historic Election as WCO Chair

WTO Lauds Nigeria Customs for Embracing Global Trade Standards

Nigeria, Rwanda Sign Landmark Tax Treaty to Boost Cross-Border Investment

LEAVE A REPLY Cancel reply

Log in to leave a comment

Recent Posts

  • Kano Gov Appoints Yusuf Sharada Special Adviser on Digital Economy
  • Kogi SEMA To Establish Emergency Operation Centre
  • The Passing of a Mighty Warrior by Chief Femi Fani-Kayode
  • SGF Akume Leads Presidential Committee for Buhari’s State Funeral
  • Police Arrest 6 Suspected Armed Robbers in Benue, Recover Firearm, Motorcycle
  • Home
  • About
  • Adverts
  • Contact
© 2020 PRNigeria. All Rights Reserved.
Latest News
Kano Gov Appoints Yusuf Sharada Special Adviser on Digital EconomyKogi SEMA To Establish Emergency Operation CentreThe Passing of a Mighty Warrior by Chief Femi Fani-KayodeSGF Akume Leads Presidential Committee for Buhari’s State FuneralPolice Arrest 6 Suspected Armed Robbers in Benue, Recover Firearm, MotorcycleNorthwest Governors Mourn Buhari, Declare Tuesday Public HolidayFG Declares Tuesday Public Holiday in Honour of Late Ex-President BuhariJUST IN: FG Declares Tuesday Public Holiday to Honour BuhariWalson-Jack Inaugurates Editorial Team for Civil Service Legacy BookPolice Arrest Suspects for Human Trafficking, Rescue Victims in Anambra, Enugu, EdoCustoms Exposes Scam Over Form M Migration to B’Odogwu PlatformUPDATE: Buhari's remain for burial Tuesday 2pm - Gov RaddaYahaya Bello Mourns Passing of Buhari and Awujale of IjebulandBuhari in his Own Words By Kabir AkintayoPHOTOS: Shettima, Gbajabiamila Arrive London to Bring Buhari’s Body Home for Burial
X whatsapp