The Department of Petroleum Resources has revoked five Oil Mining Licences and one Oil Prospecting Licence of five companies. The DPR, according to a public notice released on Tuesday, claimed a presidential directive “to recover legacy debts” from the companies operating the licences backed its action.
Affected Companies are as follow;
- Summit Oil International (OPL 206) – (co-founded by MKO Abiola)
- Express Petroleum and Gas Company (OML108) – (Owned by ABC Orjiakor)
- Cavendish Petroleum Nigeria (OML 110)
- Allied Energy Resources Nigeria (OML 120 and 121)
- Pan Ocean Oil Corporation (OML 98) – (Owned by Kase Lawal)
NEITI, The Nigeria Extractive Industries Transparency Initiative had, in a recent report, accused Pan Ocean, Allied Energy and some other companies of owing the Federal Government some royalties in 2016.
- It said Pan Ocean failed to remit tax payments regardless of being in a Joint Venture arrangement with the government.
- NEITI had prodded the DPR to probe the defaulting companies’ activities in a bid to recover the government’s outstanding revenues.
- The report stated “the non-payment by these companies will result in revenue loss to the federation. It is worthy to note that Pan Ocean did not make any financial payments in 2016, despite being in JV arrangement with the federation.”
- In 2016, Pan Ocean, Allied Energy and Express Petroleum numbered among 31 firms that defaulted in paying Education Tax (EDT).
- 2% EDT is usually charged on the accessible profit of oil and gas companies that operate in Nigeria.
Backstory: Ibe Kachikwu, Minister of State for Petroleum, had in February said government recovered N1.2 trillion royalty dues from oil companies in Nigeria.
- Kachikwu confirmed the establishment of a new automation process for tracking crude oil production and shipment made the “aggressive royalty recovery” possible.
- He warned that oil firms that had not remitted outstanding royalties to government at the expiration of the agreed deadline might forfeit their licences.
- Afterwards, the ministry requested to revoke the affected licences, which culminated in the presidential directive to recover outstanding payments.
See link to DPR Press release.
News continues after this ad