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Nigeria loses N305b to fraud in gas flare data

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The Minister of State for Pretroleum Resources Emmanuel Ibe Kachikwu

The Minister of State for Pretroleum Resources Emmanuel Ibe Kachikwu

• Senate probes alleged unremitted $5.6b by NNPC, NPDC
• Reps investigate oil firms over N500 billion debt

Nigeria loses an estimated $1billion (about N305 billion) in revenue every year due to the falsification of gas flare data, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has revealed.

The minister spoke yesterday in Abuja at a gas competence seminar with the theme ‘Towards ending gas flaring and unlocking gas potential in Nigeria.” He hinted that the Federal Government would set up an independent tracking mechanism in 2017 to ascertain the actual volume of gas that was flared in the country.

“My take is that we lose over half a billion to a billion of government revenue looking at the basis of the present penalties position. Nobody is effectively monitoring the volume, so when you actually go for the real effect of what is flared, in terms of statistics, it is much higher than those figures. However, we must appreciate the efforts that have been made in the past to increase penalties, among others,” Kachikwu said.

According to the minister, there is an urgent need for the country to devise a policy that will be targeted at eliminating gas flaring.

“Beginning next year, we will be putting up an independent tracking mechanism, not relying on figures from the IOCs and from the Department of Petroleum Resources (DPR) to find out what really is the flare volume. My feeling is that there is a lot of management of those figures to suit the cap of the penalties that are being charged,” he said.

In a related development, the Senate yesterday began an investigation into an alleged non-remittance of $5.6 billion by the Nigerian National Petroleum Corporation (NNPC) and one of its subsidiaries, the Nigerian Petroleum Development Company (NPDC).

Adopting a motion sponsored by Dino Melaye (APC- Kogi West), the Senate alleged that from 2013 to date, the NPDC has continued to lift crude oil from divested wells OML 61, 62 and 63 worth over $3.487billion without remitting the money to the Federation Account.

The upper legislative chamber therefore mandated its committees on Petroleum Upstream and Finance to investigate the allegation with a view to recovering the money due to the Federation Account.

The lawmakers also mandated the NNPC and NPDC to immediately remit monies obtained on behalf of the Federal Government to the Federation Account upon lifting.

After the motion was passed, Senate President Abubakar Bukola Saraki said: “We must put an end to this level of misappropriation and recklessness. This must stop. I believe that this committee has a duty to ensure that it works very hard to get to the bottom of this. Even more worrisome is the fact that they did it in the last administration and now they are carrying out the same practice again. We must put an end to this, we cannot continue with a situation where some people are sabotaging the efforts to fight corruption.”

Also yesterday, the House of Representatives commenced an investigation of key oil companies which are allegedly indebted to the country to the tune of over N500 billion. The marketers allegedly involved in the huge indebtedness are Oando, Forte Oil, Total Oil, Conoil, Masters Energy Oil and Gas Ltd. Others are MRS Oil and Gas, Heyden Petroleum, Rahamaniyya Petroleum, Amicable Petroleum, Aiteo Petroleum, Honeywell Oil, Capital Oil, Felande Petroleum, Sharon Oil and Zamson Petroleum.

The Speaker of the House, Mr. Yakubu Dogara, who inaugurated the Abdullahi Gaya led ad-hoc committee justified the move, saying it was aimed at plugging the loopholes in existing laws and practices in the downstream sector of the economy.

Represented by the Chief Whip, Mr. Ado Doguwa, the speaker said: “We expect that in no distant future, the committee will be inviting some companies and individuals to provide answers to questions as to what happened to the downstream sector. We hope that this committee will conduct its affairs in a serious and corruption-free manner as the House will not tolerate any evidence of undue influence or improper conduct.”

Gaya who reechoed the speaker’s position said the hearing underlined the resolve by the lower legislative chamber to return the country to the path of economic prosperity

The House had adopted a motion sponsored by Mr. Jarigbe Agom Jarigbe (Ogoja/Yala Federal Constituency of Cross River State) on the urgent need to investigate the huge debts owed the Petroleum Products Marketing Company (PPMC) by some major and independent oil marketers.

Jarigbe had alleged that “there is a connivance and compromise by functionaries of PPMC to leave government funds in the hands of these marketers, thereby putting the country in dire financial straits.”


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