The
Nigerian National Petroleum Cooperation has commenced the process of recovering
over $7bn in over-deducted tax benefits from joint venture partners on major
capital projects. Senior Special Assistant to President Muhammadu Buhari on
Media and Publicity, Mr. Garba Shehu, in a statement on Sunday, said the
corporation had also engaged an international accounting firm to ascertain the
exact amount due to government on the Strategic Alliance Contracts entered by
Nigerian Petroleum Development Company, where up to $2.46bn of government money
was to be recovered. In a report submitted to Buhari by its new management,
detailing the corporation’s successes so far, the Group Managing Director of
the NNPC, Dr. Ibe Kachikwu, revealed that the firm had commenced performance
measurement and benchmarking. He added that the corporation had also started
what it described as Value for Money Review of NNPC and the JV companies
covering the period of 2008 to 2013. The NNPC report, according to the
statement, indicated that the new measures might lead to further cost recovery
for the firm. The report also revealed that after an extensive investigation of
the various toxic crude oil for refined products swap contracts, a total sum of
$420m had so far been reconciled in favour of NNPC and was now due for recovery
from the legacy OPA/SWAP contracts. “Out of the reconciled amount, the sum of
$277m had been recovered in lieu of products and the recovery effort is still
ongoing,” the statement added. According to the report, the NNPC boss stated
that he was committed to the continued review of all existing contracts and
addressing the ones that were not favorable to the corporation. It noted that
significant cost reductions were also expected to ensure that the corporation
remained profitable in the prevailing low crude oil price regime. NNPC upstream
operations are in joint partnerships with the major oil companies. These
multi-national exploration and production companies are operating predominantly
in the on-shore Niger Delta, coastal offshore areas and lately in the
deep-waters. As with many other developing countries, the multinationals in
Nigeria had been operating under what is called a concession system, with NNPC
being the concessionaire, while the companies are the operators. NNPC is
responsible for the management of the exploration bidding rounds for oil and
gas. The multinational oil companies operate in partnership with NNPC under
Production Sharing Contracts. The statement from the Presidency on Sunday did
not name the joint venture partners from which the corporation plans to demand
the refund. However, some of the international oil companies that are JV
partners of the NNPC include Shell, Agip, Mobil, Chevron and Texaco among
others.
Has laoreet percipitur ad. Vide interesset in mei, no his legimus verterem. Et nostrum imperdiet appellantur usu, mnesarchum referrentur id vim.
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