IOCs are owing Nigeria $20bn, and FG wants them to pay now

Major international oil companies (IOCs) operating in Nigeria owe a collective tax arrears of about $20 billion, money the Government is now demanding that they pay.

Earlier this year, letters were sent to the defaulting companies by the Nigerian National Petroleum Commission, NNPC, seeking the immediate payment of royalties and taxes owed by them.

Some of the biggest defaulters include familiar names – Royal Dutch Shell, Chevron, Total SA, Exxon Mobil, Eni, and Equinor.

The Nigerian Government is demanding that each of these companies make payments ranging from $2.5 billion to $5 billion. It is unclear if all of the IOCs will oblige this.

But they all received the demand letters 

In the meantime, however, Equinor did acknowledge that it received the Federal Government’s letter. The company even confirmed that some of its competitors have received similar letters from the Nigerian authorities.

However, it believes that the Government has no viable case and should focus on rectifying its internal issues instead.

“several operators have received similar claims in a case between the authorities in nigeria and local authorities in parts of the country.”

“equinor sees no merit to the case. this looks like an internal dispute between the federal and local governments. the central government is simply trying to shift to the iocs (international oil companies) money it owes.”

And this is true because a spokesperson for Exxon Mobil said the company is currently reviewing the demand.

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The other companies refused to comment on the development.

The Federal Government did settle it’s dispute with states; or maybe not 

Last year, Nigeria’s Federal Government and it’s “generating states” finally reached an agreement over a dispute involving the distribution of revenue realised from the production of hydrocarbons.

The arrangement is such that the FG would pay the states billions of dollars. However, the money is supposed to come from the oil companies.

As at when the dispute was supposedly resolved, industry observers expected the IOCs to reject their obligations according to the terms of settlement. And now, that is exactly what is happening.

Source: Nairametrics

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