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Nigeria's NNPC accused of withholding oil revenue

The Central Bank of Nigeria says the withheld revenues total almost $50 billion

The state-owned Nigerian National Petroleum Corporation (NNPC) has failed to pass on to the government oil revenues totalling $49.8 billion over 18 months, the Central Bank of Nigeria has alleged. In a letter seen by Reuters news agency, the bank's governor, Mallam Sanusi Lamido Sanusi, says NNPC earned $65.3bn from crude oil sales between January 2012 and July 2013, but only paid $15.5bn into the government's account.

NNPC sold 46% of Nigeria's oil output over the 18 months but the sum it paid into the government's account was only one-third of the taxes paid by oil companies on the other 54%, the letter claimed.

In a statement to the press, NNPC said the allegation resulted from a 'misunderstanding of the workings of the oil and gas industry'. The sum it paid to the government, equivalent to 24% of the total cited by the bank, was revenue from NNPC's shares of oil and gas production, while the other 76% of the total was made up of taxes and royalties which went, respectively, to the inland revenue and department of petroleum resources, NNPC said.

Through NNPC's joint-venture interests - of 55% for the Shell-headed venture and 60% for ventures headed by ExxonMobil, Chevron, Total and Eni - the company has just over 1m barrels a day (b/d) of equity crude, out of the approximately 1.8m b/d produced by the joint-ventures. (Additionally, Nigeria has about 700,000 b/d of production from deep-water fields, held under production-sharing contracts, to give a country total of about 2.5m b/d including condensates.)

NNPC's share of equity crude should be realising about $37bn a year, or $55bn over the 18-month period - and additionally the company can opt to lift and sell the state's shares of deep-water production, which might raise the total to the $65.3bn stated by the bank. In its statement, NNPC said its crude liftings over the 18 months totalled 618.55m barrels, or 1.1m b/d. 

It is not known if the bank has checked whether NNPC has paid the disputed sum to the inland revenue and department of petroleum resources, as taxes on its share of equity production.

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