By Umar Muhammad Puma and Christiana Ekpan Abuja
The House of Representatives Committee investigating the over N6 trillion Naira oil revenue leakages and the activities of the Department of Petroleum Resources has said it has so far recover over $500m outstanding royalties Chairman of the ad- hoc committee Rep Jarigbe Agom Jarigbe, (PDP, Cross Rivers), disclosed this while engaging oil companies invited to explain their lack of payment of outstanding royalties to the DPR.
The committee also gave two companies, ND Western Oil Ltd and Shoreline Energy Ltd 48hours to show that they have paid a combined outstanding royalties of $48million It also resolved to summon the Managing Directors of Sterling Global and Sterling Explorations respectively, over alleged sharp practices and evasion of royalty payment to government, despite operating at the Upstream sector of the oil industry.
The resolutions followed deliberation on reports by the DPR to the effect that both companies are owing outstanding royalties which form part of the backlog of debts yet to be redeemed by it.
Omo Omorodion, company’s Legal Adviser to ND Western had while briefing the panel contradicted the DPR, saying the outstanding royalty debt now stands at $12m as against the $18m being quoted by the DPR.
He further disclosed that both the company and DPR are working on modalities to offset the outstanding $12m using proceeds from its direct off-taker fees.
While noting that his company has issues with the last paragraph of the report as read out by the panel, he argued that the Nigerian Petroleum Development Company (NPDC), owes the company the sum of $26m for which it has issued a payment mechanism that would commence soon.
Members asked why the company would wait until the House raised the red flag before making efforts to pay, adding that the probe has led to the recovery of over $500m since it began.
They frowned at the behaviour of DPR in neglecting its statutory duties of collecting royalties, saying that DPR is the main reason why companies drag feet in paying royalties as and when due.
Responding, the company’s representative noted that NPDC has issued a credit note in respect of crude oil lifting to the tune of $17million which the company would use to clear it’s outstanding royalty debt of $12m with DPR.
Committee asked to see the company’s 2016 and 2017 approved budget by NAPIMS with a view to assessing performance and the capacity for utilising the oil well drilled by it, as well as the performance report for the years under review with regards to surpluses and deficits, all of which are to be submitted in 48hours.
Shoreline Energy Ltd represented by Kola Bakare, told the panel that payment of outstanding royalty of $3.6m has been completed.
He disclosed that government through the NNPC was owing the company $4.2m operatorship fee which the DPR has said it would convert to royalty by writing to the Accountant General of Federation, adding that DPR has since issued payment receipt to that effect.
However, documents available to the committee as at May 28 showed that Shoreline is still owing a cumulative debt of $30m.
Asked to show when and how the company has been able to clear the $30m debt to the extent of getting payment receipts, he said there is an arrangement with DPR through which it’s making quarterly payment.
But the panel disputed that assertion, saying that royalty payment are made on quarterly basis, arguing that only export permits are renewed on quarterly basis.
Just like ND Western, Shoreline was also asked to provide particulars regarding it’s approved budget and performance index from 2015 to 2017.
For Sterling Global Oil Resources Ltd, which said it owes nothing on royalty, the panel sought to establish it’s relationship with Sterling Explorations Ltd, to which it’s Business Development Manager, Chukwuemeka Njoku said they are both sister companies.
Asked when the OML 146 which it currently operates was acquired and who heads the company, first, he named one Mr Tony Chukwueke as MD Sterling Global.
When asked who is the MD of Sterling Explorations Ltd, he said Dr Tony Chukwueke.
Alarmed by the disclosure, the panel asked if one man is the MD of both companies, to which he said he was not in the position to answer questions, adding that he was sent to convey the apologies of the MD for his inability to attend the hearing and to submit relevant documents as demanded.
Committee chairman, ruled that the panel wants to see the MD of Sterling Global Oil Resources Ltd and MD of Sterling Oil Explorations Ltd.
He said Sterling Global has not paid royalty for once according to document from the Central Bank of Nigeria even though it has been operating in the upstream sector drilling OML146.
The panel expressed suspicion that both companies which belong to one person are using under-hand tactics with a view to defrauding the government.
As a result, the panel resolved to summon MD and other members of the board of both companies in question, adding that they must appear on Wednesday, July 26 with all other info regarding where they operate and production activities.