Oil theft: Reps begin probe of crude oil production, revenue generated by NUPRC
The House of Representatives has begun investigation into crude oil production and revenue by Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in order to determine the revenue accrued to the Federation through
The investigative hearing on the ‘Revenue Monitoring Exercise’ was held at the instance of the House Committee on Finance, chaired by Hon. Abiodun James Faleke.
As stipulated in the documents submitted to the Committee, out of total sum of N695.617 billion revenue realised by the Commission for the period under review, the sums of N616.182 billion, N19.556 billion, N39.085 billion, N3.502 billion, N6.693 billion and N10.599 billion were generated from Oil Royalty, Gas Royalty, Gas Flared Penalty, Concession rentals, MISC Oil Revenue and Signature Bonus, respectively.
According to the Commission’s document submitted to the Committee, from the 24 contracts awarded from last quarter 2021, the sum of N55.438 million for renewal of contract for the provision of 20 Mbps internet bandwidth in DPR offices nationwide to VDT Communications Ltd. on October 18, 2021, N20.464 million for procurement and installation of network & communication devices for DPR Calabar Field and N10.899 million for Akure Field Offices awarded to Zionchrome Intl Nigeria Ltd on October 5, 2021.
Contract worth N49,921,250 was also awarded for engaging the service of consultant to facilitate Capacity Building on Upstream Petroleum Operations for relevant National Assembly Staff and Legislatives Aides for the NUPRC on the 24th December, 2021 awarded to Priceless Craft, N48.268 million contract to facilitate strategic engagement on budget and revenue for NUPRC awarded on the 24th December 2021 as well as N39.295 million contract for separation and reconfiguration of smart inspector (Formelo) mobility workforce application for NUPRC, N78.045 million for renewal of automated upstream system (AUS) for NUPRC, among others.
While responding to questions on the Fiscal Responsibility Commission’s activities, Mr. Bello Aliyu, explained that from the N4 billion liabilities inherited from the defunct Department of Petroleum Resources (DPR), it was scaled down to N1.7 billion was taken over by the Commission.
“The Nigeria Upstream Regulatory Commission is a new agency. It is the name that is new. The name was added to our purview in December last year. So, we now wrote to them a letter sometimes in March to inform them of their responsibilities to Fiscal Responsibilities Act 2007 and then to inform them that, the obligations of DPR which was their former name is now transferred to them and that liability for DPR that they are responsible for is N1,739,837,045.
“We informed them sometime in March. I think it’s the 29th of March,” he said.
While presenting NUPRC’s position, Mr. Babajide Fashina says, “Details of revenue sources is based on oil royalty, gas royalty, gas sales royalty, gas flaring penalty, concession rental, miscellaneous oil revenue and signature bonus and all these are paid into the generation account, the Commission does not maintain any account of it’s own.
“On the second one, which is the schedule of revenue collected, from October 2021 till February date, we have a total collection of N695,617,119.49. That was from October 2021 to February 2022.
“And the breakdown as shown, the oil royalty which was the large one, we have N616 billion, the gas royalty, N19 billion, had flare N39 billion, Concession rental, N3.5 billion then Miscellaneous oil revenue, N6.69 and all these have been paid into the Federation Account.
“From January to December 2021, we were able to generate about 2.7 trillion for the Federation,” he noted.
He argued that the differential observed by the Committee would be resolved during the reconciliation with the Fiscal Responsibility Commission.
In his ruling, Hon Faleke says, “Royalty, N88.7 billion, I am reading from your figure. From what volume of crude? We need to know. You need to create a column to tell us the volume of crude for that particular period you are referring to. Because we have to monitor this in line with our production.
“So, all the revenue items you need to create that column for us to know what you are talking about. This is just bandying figures before us without foundation.
“The Deputy has also advised that, in every budget, there is revenue expected of you and you are aware of that from the Budget Office. So, you need to also create that column, okay.
“What is the expectation? What have you done to see have you surpassed or you have not surpassed? We would be able to ask you the reason for that. So that gives us proper reporting, then we can interact properly rather than just guessing.
“So, we will give you another day to do two things. Give us this proper report that we are asking. Two, do a final reconciliation with Fiscal Responsibility and get back to us next week.”
To this end, Hon Faleke directed the Commission to submit proper reports on the volume of crude oil produced and details on the projected revenue.
