The federal government has instituted a case at the Federal High Court, Abuja, against the Nigerian National Petroleum Corporation (NNPC), Nigerian Agip Oil Exploration Company (NAOC-ENI), Shell Petroleum Development Company (SPDC) and Nigeria Petroleum Development Company (NPDC) to recover huge funds lost to alleged under-remittance and diversion of oil/gas royalties and taxes.

In the suit, the government accused the four oil firms of not being transparent in reporting their production activities, engaging in under-remittance of taxes and oil/gas royalties and in some cases, diverting such funds to private coffers.

The quartet are sued with their “agents or assignees” in the four suits before Justice John Tsoho, but initiated by the Special Presidential Investigatory Panel (SPIP) on the recovery of public property, led by Okoi Obono-Obla.

The government accusing the NNPC of diverting huge funds remitted to it by its agents or assignees as taxes and royalties.

In a supporting affidavit, the plaintiff accused NNPC of failing to remit the taxes paid to it by Agip, which operated the Aboh Field between 2007 and 2016. It is estimated at $148, 326, 339.09.

The affidavit reads: “All indicated tax oil allocations form legitimate computations, were released to and all collected by the NNPC on judiciary and for the sole purpose of paying the required financial and financial obligations to the federal government designated Crude Oil Royalty Tax Account No: 802906875 domiciled at the Central Bank of Nigeria (CBN) and described as such, the sum of $148, 326, 339.09.”

The plaintiff stated that money was never remitted into the federal government’s account, but instead, “concealed and diverted to the use of persons employed as officials and public servants within the NNPC and faceless syndicates at both the CBN, serving and or retired as to date”.

It added that the same “unethical practices were found as NNPC employees concealed and diverted to persons, using accruing royalty tax on crude oil, omitted to remit same from 2007 – 2016, as received from operators of Bong FPSO and holders of PSC to the tune of $44,755,903.99”.

The plaintiff stated that information to this effect, which could be “detected from records in the SPDC (Shell Petroleum Development Company), and even the Department of Petroleum Resources (DPR), was concealed by both internal and external auditors, without audit query through indicated reported period”.

It claimed that a thorough examination of NNPC’s books would reveal additional $1,195,481.85 “concealed and diverted to personal use to others than paid into public pool in designated account at the CBN”.

The plaintiff accuse Agip of not being transparent in reporting its production activities in relation to Oil Mining Lease (OML) 60 and 61, comprising 66 oil wells at Udaga farm land, Oguta local government area of Imo State.

The plaintiff, who identified the 66 oil wells, stated that Agip has consistently failed to comply with “extant laws on Royalty Taxation, Crude Oil Revenue Royalty Taxes, Deep Water and Inland Water Basin Drilling Law 1969 and had effected, uttered incorrect entries as to daily production volume from indicated wells in OML 60 and 61.

“The respondent (Agip) by the aforementioned act of commission and or omission, through its employees, agents, contractors; conspired, connived, collaborated and presented such incorrect daily production volumes thereon, and had stolen, misappropriated huge sums of monies, in the currency of US dollars, to the tune of 2000 barrels and quantifiable volume of gas measured in (mmbtu) per’ day and $750,000,000 respectively, being the global currency of trade in said commodities.

“The above information are factual and can be verified only through adequate and applicable judicial process; that would cause to be investigated by law enforcement officials as to be ordered on filling requisite Motion for Ingress for inspection and observation, as well as procurement of search warrant issued by a Federal High Court of competent jurisdiction; and as such ordered assignment to be under the watchful eyes of DPR officials as to be designated.”

The plaintiff raised similar allegations against Shell in relation to its operations in OML 20 comprising 40 oil wells.

It alleged that Shell has also consistently failed to abide by extant laws on Royalty Taxation, Crude Oil Revenue Royalty Taxes Deep Water and Inland Water Basin Drilling Law 1969 and “had effected, uttered incorrect entries as to daily production volume from indicated wells in Oil Mining Lease, alongside non remittance, underpayment and diversion of Petroleum Profit Tax and VAT for a number of years.

“The respondent (Shell) by the aforesaid act of commission and or omission, through its employees, agents, contractors; conspired, connived, collaborated and presented such incorrect daily production volumes thereon, and had stolen, misappropriated huge sums of monies in the currency of USA dollars to the tune of 2000 barrels and quantifiable volume of gas measured in (mmbtu) per day and USD 750,000,000 respectively, being the global currency of trade in said commodities.

“The respondent has also consistently failed to abide in compliance to the extant laws of Royalty Taxation, Pipelines Laying/Crossing Tariffs revised edition 2007 as issued by the National Inland Waterways Authority (NIWA), Crude Oil Revenue Royalty Taxes, Deep Water and Inland Water Basin Drilling Law 1969 and has defaulted on Pipeline Laying/Crossing Tariff Remittance from 2007 to December 31, 2017 at N5,000,000 yearly and N100,000 Annual Inspection and N500,000 Monitoring Fee totalling N375,000,000,000; N1,100,000 and N8,250,000,000 respectively.”

In the fourth suit, the plaintiff accused NPDC and its agents – ND Western Limited and SEPLAT PET Ltd – of equally defrauding the Nigerian government in alleged concealment, under-remittance and diversion of taxes and royalties.

It particularly accused NPDC of engaging in “unethical concealment of sum of N3, 99 868,642.44 being amount due to the coffers of the Federation of Nigeria to be received on its behalf and that of the people of Nigeria”.

“But certain employees charged with effecting necessary action in compliance, connived, conspired, concealed and or diverted same and failed to remit sum as Gas Sales Royalty Tax into designated CBN Account No: 802906891 and such other JP Morgan, Chase Bank Account at Park Avenue, New York NY, USA known as Federation Account for the Central Bank of Nigeria (CBN) as to the US Dollars currency where and when applicable.

“While Naira Account is 0020150961018 domiciled at CBN, as it were, the said Gas Sales Royalty Tax due and stolen by said employees at the Benin Office of NPDC Sapele Road, Benin, is for the period 2015 – 2016.

“NPDC, ND. Western Limited and SEPLAT Pet. Ltd both corporate entities registered in Nigeria also engaged in exploration and production of oil and gas in Nigeria respectively.

“Both ND. Western Limited and SEPLAT Pet. Ltd and their employees defrauded the Federal Republic of Nigeria of public funds due to it that would have been deployed to improve our infrastructure, health care delivery and education as both companies violated at will Nigerian laws regarding remittance of Gas Sales Royalty Tax to the tune of N3, 234 732992 and N194, 739,901.83 respectively, totalling N7, 422, 341, 136.27 unremitted.

“Both ND Western Limited and SEPLAT Pet. Ltd are holders of Sole Risk (SR) contract type with the NNPC, as such come under the aver sight of NAPIMS and DPR (National Petroleum Investment Management Services and Department of Petroleum Resources).

“The said sum of N7, 422,341,136.27 was actually not remitted as prescribed by law for the period 2011 – 2017 regarding these companies’ production of gas and sale of Gas Royalty Tax to the DPR dedicated at out at the Central Bank of Nigeria Naira account referred to as Gas Royalty Account No 0020150961018.

“As well as the sum of $14,641,676 19 dubiously concealed and diverted by officials of ND. Western Limited, failing to remit same amount into DPR dedicated US dollar account 802906891 while naira account is 0020150961018 for same period as indicated above.

“NPDC also diverted to unauthorised use, upon concealment, sum of $142, 202, 174.19 spanning 2010 – 2016 being the sum of $171, 485, 526.51 concealed and missing and in the purse of private persons.

“NPDC and its employees Benin also concealed and diverted the sum of USD1,688, 036, 933.73 accruing to the Nigerian public from their Crude Oil Royalty Tax and supposed to be remitted into CBN dedicated account No 802906875 known as Royalty on Oil (USD) CBN JP Morgan, Chase Bank, Park Avenue New York (NY) USA, ABA Code: 02100002.

“ND. Western Limited also deliberately concealed and diverted N sum of USD 29,066,721.47 spanning through 2014 – 2016 on their Crude Oil Drilling due to be paid into the Crude Oil Royalty Tax as holder of Sole Risk (SR) from NNPC.

“Deeply investigated findings will reveal that the DPR did not receive nor issue any acknowledgement of any receipt in that regard as well as no visible figure of such in the CBN account,” the plaintiff said.

It is praying the court to, among others, order the named oil companies to pay to the FG all funds due to it as taxes and royalties.

The plaintiff also wants the court to authorise relevant government investigative agencies to probe the allegations raised in the suits with a view to ascertaining the oil companies’ level of compliance with the applicable laws.

When the cases were mentioned on May 28, 2019, the plaintiff informed the court that it had documents on the defendants.

Justice Tsoho adjourned the hearing till September 17, before which the respondents – NNPC, Shell, Agip, NPDC and other interested parties – are expected to have filed their responses.

With The Nation report