Royalties: FG to revoke licenses of debtor oil firms

The Federal Government, has warned it would revoke the licenses of oil producing firms that failed to pay up their royalties.

TRACKING>>Minister of State for Petroleum Resources, Mr.Ibe Kachikwu, gave the warning at a Ministerial press briefing on key achievements of the Department of Petroleum Resources on crude oil, LNG tracking and other automation initiatives held in Lagos yesterday.

The Minister said it was regrettable that some oil firms after enjoying some grace period ranging between 30 to 90 days, have failed to pay up what was due to government. He explained that the initiatives on aggressive revenue drive by DPR has led to about 80 percent increase in payment of royalties by oil companies.due to government. He explained that the initiatives on aggressive revenue drive by DPR has led to about 80 percent increase in payment of royalties by oil companies.

‘‘A situation whereby we write to oil companies to pay up royalties, and for 90 days they are unable to comply. What that simply says is that they are not ready for business and we cannot continue to wait for such companies. We must move on.

So going forward, I have asked the DPR to give additional 30 days grace period, after which their licenses will be withdrawn. I have instructed the DPR to revoke their licenses.’

Kachikwu said that the 80 percent increase in payments has helped to jerk up royalty revenue to about N1.2 trillion and another $1.5 billion for license renewal fees.

All these, he said was made possible due to new initiatives that have been put in place to help track revenue that were hitherto untraceable.

The Minister further said that a revenue tracking system put in place by DPR has helped to reduce leakages and the number of defaulting firms, especially in royalty payment and other statutory charges.

At the moment, he said only about four firms have defaulted in the payment of royalties as against the situation in the past, saying the firms have only 30 days to comply or be ready to be shown the way out.

On tracking of oil exports, and imports of refined products whose command centre was also inaugurated by the Minister, Kachikwu said it was a new dawn for the oil and gas sector as oil production figures and vessel movements within and outside the country’s territorial waters can now be monitored through the National Production Monitoring System (NPMS) portal

‘‘We need to tell Nigerians everyday what volume of crude we produce, and what is exported withy certainty,’’ he assured. He said the era of waiting for the International Oil Companies (IOCs) to tell the country what they produced was over as the DPR now has the facility to monitor oil production and export from export terminals.

He also stressed that the initiative which is to cover the downstream sector, will also track the volume of refined petroleum products coming into the country from any part of the world, thereby resolving disagreements bothering on numbers. The minister said it was not enough for country to produce but must be able to ascertain where such cargoes are going and what happens to them thereafter.

This, he explained, has led to the forensic review of vessels on a weekly basis while analyses gathered are shared among security agencies to ask questions, especially when there is reason for suspicion.