The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that oil and gas operators in the country owe the Federal Government a total of $6.1 billion in outstanding liabilities as of August 2024.
The disclosure was made by NEITI’s Executive Secretary, Dr. Ogbonnaya Orji, during an interactive session with the Senate Committee on Public Accounts on industry reports covering 2021 to 2023. According to a statement issued on Wednesday by NEITI’s Director of Communications and Stakeholders Management, Mrs. Obiageli Onuorah, the outstanding debts comprise unpaid royalties, taxes, rents, and other collectible revenues.
Dr. Orji advised the government to prioritize the recovery of these funds, emphasizing their importance in financing the 2025 budget.
“At a time when the country is mobilizing resources to meet its budget expenditures, recovering these revenues by the relevant agencies will be a huge relief to the government,” he stated.
Declining Sector Contributions and Oil Theft Reduction
Despite some positive milestones recorded in the oil and gas sector in 2023, NEITI highlighted concerns over declining contributions to the country’s Gross Domestic Product (GDP). The sector’s GDP share dropped from 7.24% in 2021 to 5.48% in 2023.
However, the agency noted a 78% reduction in crude oil losses, with Nigeria losing 36.6 million barrels in 2022 compared to 7.68 million barrels in 2023. Dr. Orji attributed this progress to improved security measures, including better surveillance of pipelines by the Office of the National Security Adviser, the Armed Forces, and other security agencies.
To further curb crude oil theft, he stressed the need for greater involvement of host communities, urging their buy-in to safeguard the nation’s oil assets.
Gas Production Decline and Energy Transition
The NEITI report also highlighted a decline in gas production, dropping from 2.47 billion standard cubic feet (scf) in 2021 to 2.49 billion scf in 2023, despite a brief increase in 2022.
Dr. Orji called for a clear alignment between Nigeria’s gas commercialization, energy transition policies, and the Climate Change Act to accelerate the country’s shift toward clean and renewable energy sources.
Public Hearing on Outstanding Debts
Responding to the NEITI report, the Chairman of the Senate Committee on Public Accounts, Senator Aliyu Wadada, announced plans for a public hearing to address the issue of unpaid liabilities. He stated that all companies with outstanding debts to the government must appear before the committee to account for their obligations.
The NEITI report serves as a wake-up call for the government to intensify efforts in revenue collection, tackle declining sector performance, and ensure transparency in Nigeria’s extractive industries.
