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President Muhammadu Buhari and House of Representatives have issued an ultimatum that expires on May 25 this year (2018} to the Nigerian Petroleum Development Company (NPDC) and Department of Petroleum Resources (DPR) to recover of total sum of $1.305 billion in crude oil royalties from Neconde Energy Limited.
A breakdown of the amount shows that the sum of $450 million was the outstanding of crude oil royalties owed by Neconde since 2005 and an additional sum of $834 million being the mandatory levy payable for the renewal of operating licence on Oil Mining Lease (OML) 42.
In his remarks, Frank Edozie, Managing Director of Neconde, who was engaged by the company over a year ago, explained that the sum of $471 million “is an accounting figure, subject to value for money between Neconde and NPDC.
Edozie further argued that the amount is materially incorrect, as the parties have agreed to engage the service of auditors to ascertain the actual indebtedness of Neconde to the Federal Government.
According to Edozie, Neconde acquired 45 percent of the equity on Oil Mining Licence (OML) 42 in 2011 and paid the sum of $450 million to the previous owner of the OML 42.
Edozie also dismissed allegations that the company acquired jets and an airline company other than its office in Warri, Delta state.
Speaking earlier, Johnson Agbonayinma, a member of the committee chided the Department of Petroleum Resources (DPR) for failing in its statutory functions. Agbonayinma alleged that some officials are sabotaging the Committee’s efforts in the bid to recover the unpaid royalty accrued to government.
Agbonayinma further alleged that some of the officials involved in the transaction in the DPR misled the President before granting approval for the renewal of the OML 42 licence.
He observed that the agency has over the years, failed to ensure the payment of the outstanding sum of $471 million royalties to government, adding that the recent move to recover the fund was prompted as a result of the motion raised on the floor of the House.
On his part, Jerry Jarigbe, chairman of the Committee, faulted the approval granted by the Minister of State for Petroleum Resources, stressing that such approval was wrong and not in the best interest of the country.
Jarigbe, who vowed not to entertain frivolities from the stakeholders, maintained that the House had raised concerns over the unpaid royalties and joint venture between Neconde and NPDC.
In his presentation, Yusuf Matashi, NPDC Managing Director, argued that all the revenue streams from the OML 42 go to Neconde, except for royalties, PPT and rent on oil assets, while the crude oil lifting belongs to the partners.
Matashi, who disclosed that NPDC and Neconde signed an agreement since 2012, confirmed the intervention of the Presidency on the recovery of the outstanding sums of $471 million and the payment of $834 million on mandatory levy for renewal of OML 42.
Speaking earlier, the DRP Director who acknowledged the Committee’s efforts denied pardoning of any of the defaulters, and observed that “no company could export without payment” of outstanding fees belonging to the Federal Government.
According to him, DPR has designed internal measures to ensure that the defaulting oil companies do not operate without payment, adding that DPR has designed a payment plan with additional 1% penalty accruing if they fail to adhere to the repayment plan.
He disclosed that the President had in April 2018 intervened in the non-payment of $471 million and gave a deadline of 25th May, 2018.
While ruling, Jerry jarigbe who presided over the investigative
hearing mandated DPR and NPDC to revert to the Committee on the 27th May of 2018 on the outcome of the repayment, just as he declared the approval granted by the Minister of State for Petroleum Resources for renewal of OML 42 as null and void.
KEHINDE AKINTOLA, Abuja
