Nigeria demands $20bn from oil companies in tax, royalty arrears

Feb 23, 2019
The Federal Government of Nigeria, in its continued clampdown on tax defaulters to shore up its revenue, has demanded a number of foreign oil companies operating in the country to pay almost $20 billion in taxes owed to states, industries and government.
 
A report by Reuters on Thursday indicated that a letter sent to the companies earlier this year via a debt-collection arm of the government, the Nigerian National Petroleum Corporation, NNPC, cited what it called outstanding royalties and taxes for oil and gas production.
 
The government asked Royal Dutch Shell, Chevron, Exxon Mobil, Eni, Total and Equinor to pay the federal government between $2.5 billion and $5 billion.
 
Equinor, a Norwegian company produced around 45,000 barrels per day (bpd) of oil in Nigeria in 2017. The company has confirmed receiving the demand.
 
“Several operators have received similar claims in a case between the authorities in Nigeria and local authorities in parts of the country,” an Equinor spokesman said, while
Exxon said it “is currently reviewing the matter”, a spokeswoman for the U.S. company said.
 
According to the Reuters report, Shell, Total, Eni, Chevron, The Presidency, petroleum ministry and NNPC.
 
This is coming after the federal government and states reached an agreement over the distribution of revenue from hydrocarbon production.
 
The agreement reached last year resolved that the Federal Government would pay the states several billion dollars.
 
The oil companies were however expected to raise objections to the payment demand, as Equinor’s spokeswoman insisted that there is no merit in the demand.
 
The report also quoted another source at a different company saying: “This looks like an internal dispute between the federal and local governments. The central government is simply trying to shift to the IOCs (international oil companies) money it owes.”
 
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