A Review of the Nigerian Energy Industry

DPR, oil firms frustrating recovery of $8.8bn royalty – Prof Asobie

24 August 2012, Sweetcrude, ABUJA – PROF. Assisi Asobie Former Nigerian Extractive Industries Transparency Initiative chair says the Department of Petroleum Resources, DPR, and oil companies operating in the country were frustrating efforts by NEITI to enforce remediation action involving $8.8billion underpayment in royalties to government.

The figures, according to him, were revealed in audit reports covering 1999 and 2008.
Speaking Thursday in Abuja while handing-over to the National Stakeholders’ Working Group of NEITI led by Ledum Mitee, said efforts to recover the monies were hampered by the DPR.

“Our attempt to implement the remediation action recommended in the audit reports were frustrated by the DPR. Initially, we did not have the capacity to determine the actual amount underpaid, but later they came to say the amount was actually more than our audits stated, which is understandable because the audit sampled the industry,” Asobie said.

He added: “When we asked them what the new amount was, they were not forthcoming, and these are some of the challenges you will face and the pressure is much. Most companies do not pay the amount of royalties stipulated in the law and nothing is being done by those in charge,” he added.

He explained after waiting endlessly for the DPR, NEITI wrote to the companies to pay up, saying, “the companies wrote us back directing us to read the NEITI Act.

“They pointed out that ours is to ensure that they paid the money, but not to actually collect the money because we are not a revenue agency. That is a dilemma you have to solve”.

He explained that it is more important for the new board to pursue public accountability in the application of oil revenues by various levels of governments across the country as contained in the NEITI Act.

Asobie stressed that while the global body, Extractive Industries Transparency Initiative (EITI) requires only revenue flow; NEITI Act has a broad demand on the agency.

Mitee thanked Asobie and his board on their achievements, assuring them that the new board would build on the foundation they laid.

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