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Reps Indicts over 30 Oil Companies over Tax Evasion, Seeks Arrest & Prosecution of FIRS Chairman, Nami


By Chibuike Nwabuko

Abuja (Sundiata Post) – The interim report of the House of Representatives Ad hoc Committee investigating the Structure and Accountability of the Joint Venture (JV) Business and Production Sharing Contract (PSCs) of NNPC since 1991 to date has indicted several oil companies over tax evasion running into trillions of naira.

In the interim report sighted by our correspondent, which is expected to be laid on Thursday, the lawmakers said in their report that “Oil revenue accounts for two-third of government’s funding and any form of corruption within the sector should not be treated with kit-gloves.

“Nigerians indeed, the world is now used to headlines of missing money in the NNPC almost every year.

“investigation reveals that the JVs and PSCs of NNPC sell Nigerian oil at lowest cost to their own subsidiaries in a tax haven and then sell that same oil to other buyers at full price. They also inflate the cost of their Nigerian production operations, or under report the volume of oil they produce. This, apart from their outright circumvention of the Nigerian tax laws (tax evasion), is an abusive and contrived tax avoidance scheme to minimize their tax liability.”

“The ad hoc committee is praying the House to adopt the recommendations with a view to bringing sanity in the oil and gas operation in Nigeria and for greater benefits to the citizens,” part of the report said.

The interim report particularly indicted Chevron Nigeria Limited over the construction of a 34,000 barrel per day (bpd) of Gas to Liquid (GTL) plant at Escravos, Delta State.

According to the report, “a total of $1.294 billion was earmarked for the EGTL project in 2001 and by the time the contract was awarded in 2005, the final approved cost rose to $2.941 billion which was further increased to $8.6 billion as at 31st December 2011, and upon completion in 2014, the total project was over $10 billion.”

The interim report said, that the EGTL project is executed at such cost where similar projects in other jurisdiction like Qatar which have the same capacity, technology, engineering procurement and construction (EPC) contractors and even operators cost less than $1.5 billion.

The committee then recommends that Chevron should be made to refund $8 billion to the federation account.

The committee report noted that almost all the international oil companies and national oil companies who enjoyed capital allowance in Nigeria have no Certificate of Acceptance of Fixed Asset as prescribed by the Industrial Inspectorate Act.

“All oil companies that benefited from capital allowance without obtaining the Certificate of Acceptance of Fixed Asset, CAFA as prescribed by the Industrial Inspectorate Act be made to refund all such monies to the government treasury with immediate effect.

The committee said the money running into billions of dollar should be recovered through relevant government anti-craft agencies. It also recommends that the IOCs should be prosecuted both within Nigeria and their mother countries. It also said the recommendations should be forwarded to their embassies, commissions and national assemblies.

The reports said the Chairman of the Federal Inland Revenue Service, Mr. Mamman Nami should be arrested and prosecuted for aiding tax evasion by oil companies.

The Committee chaired, by Hon, Abubakar Hassan Fulata in its interim report said that despite several invitations to the FIRS chairman, Nami he failed to appeared before the probe panel.

Some of the affected companies in the interim report include Mobil Producing Nigeria Ltd, Total Energy Nigeria Ltd, Chevron Nigeria Ltd, AGIP, Shell Petroleum Development Company of Nigeria, Coinoil, Texaco among others.

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