To industry watchers, the recent suit by the Federal Government of Nigeria against four oil companies before the Abuja Federal High court does not come as a surprise as the companies have long been known for other infractions in the industry including that of not being transparent in their production activities report.
The Federal Government also accused the companies of under-remittance of taxes, oil and gas royalties, as well as redirecting such funds to private treasuries.
The government is said to be engaged in a battle to recover large sums of money allegedly lost to the under-remittance and diversions of royalties and taxes from oil and gas, by some major oil companies in Nigeria.
The oil companies are the Nigerian National Petroleum Corporation (NNPC), Shell Petroleum Development Company (SPDC) Nigerian Petroleum Development Company (NPDC) and Nigerian Agip Oil Exploration Company.
In a supporting affidavit presented before the ruling Justice John Tsoho of the Abuja Federal High Court on May 28, 2019, the Plaintiff (the Federal Government) accused the NNPC of failing to forward to it the taxes and royalties paid by its agents. The FG also stated that the petroleum corporation diverted funds estimated at $148 million, paid by Agip as taxes between 2007 and 2016. Part of the affidavit reads thus;
“All indicated tax oil allocations form legitimate computations, were released to and all collected by the NNPC on judiciary and for the sole purpose of paying the required financial and financial obligations to the Federal Government designated Crude Oil Royalty Tax Account No: 802906875 domiciliated at the Central Bank of Nigeria (CBN) and described as such, the sum of $148 million.”
The FG further noted that NNPC was engaged in unethical practices as the company’s employees allegedly veiled and redirected to individual accounts the accruing royalty tax on crude oil from operators. This was to the tune in the tune of $44 million between 2007 and 2016.

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