Oil Wheeling, Dealing Has Nigeria Govt Short-Changed on Royalties

Oil is Nigeria's main export. A cloud of uncertainty now hangs over U.S.$62 billion in outstanding taxes and royalties owed Nigeria by major oil operators in the country. The national government had in 2019, taken the step to recover as much as U.S.$$62 billion (£50.6 billion) from international oil companies using a 2018 Supreme Court ruling which, it said, enabled it to increase its share of income from production-sharing contracts. Chika Izuora writes for Leadership, that the government was compelled to demand the money after realising that the energy companies failed to comply with a 1993 contract-law requirement that the country receive a greater share of revenue when the oil price exceeds U.S.$20 per barrel. Getting companies to comply with royalty payments seems a challenge. In 2017, the government gave oil firms a 2-week deadline to pay outstanding royalties, while in 2019 it sought back-taxes totalling U.S.$20 billion from seven oil firms, including Royal Dutch Shell.

 

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