My Naija News - Nigerian Government to Recover $1.91Billion from Shell, Exxon Mobil

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Nigerian Government to Recover $1.91Billion from Shell, Exxon Mobil

Tuesday, 20 May 2008

President Umaru Musa Yar’Adua has ordered the Nigerian National Petroleum Corporation (NNPC) to take immediate steps to recover outstanding payments of S1.91 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 $1.496 Billion accruable to NNPC based on the proper application of the PSC’s Capital Allowance should be recovered. This sum is made up of $850 Million from Bonga and $646.3 Million from Erha;

    * That the sum of 414.6 Million accruable to 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.

President Yar’Adua further 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 will continue to do everything possible to ensure that Nigeria derives maximum economic benefits from the exploitation of its God-given resources and that the revenues so derived are properly utilized 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.

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