Federal Government Sues NNPC, And Three Other Oil Companies

 The Federal Government has sued four international oil companies over an alleged under-remittance and diversion of oil/gas royalties and taxes by some major oil companies.

After the federal government discovered the oil companies (NNPC, Agip, Shell, NPDC) were 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.
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 the public pool in the designated account at the CBN”.

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