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Saturday, February 23, 2019

The federal government has ordered six international oil companies (IOCs) developing petroleum resources in Nigeria’s deepwater offshore area to pay almost N20 billion in outstanding royalties and taxes for oil and gas production.

According to Reuters reports, Royal Dutch Shell, Chevron, Exxon Mobil , Eni, Total and Equinor were served letters through a debt collection arm of government.

Each of the companies were asked to pay between $2.5 billion and $5 billion.

Confirming receipt of the letter, a spokesman for Norway’s Statoil, now renamed Equinor ASA, said several operators have also been briefed on the “debts”.

“Several operators have received similar claims in a case between the authorities in Nigeria and local authorities in parts of the country,” the Equinor spokesman is quoted to have said.

He however said the Norwegian state-owned firm sees “no merit to the case”

A spokeswoman for Exxon Mobil said the company  “is currently reviewing the matter.”

Other sources claimed that the order for IOCs to pay outstanding taxes and royalties arose from lingering disputes between the federal and state governments on the distribution of revenue realised from oil production by the Federation Account Allocation Committee (FAAC).

“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,” the source said.

Earlier in January, Thisday reported that IOCs risked contract termination if they did not pay all royalties and taxes due to government within 14 days.

Trobell International–a recovery agent appointed by government–said Equinor, had defaulted in its payment to government to the tune of $5.5 billion on deepwater block, OML 128.

In April 2018, Chevron Nigeria and Equinor, sued the federal government, through the Nigerian National Petroleum Corporation (NNPC), in a US court, over claims of overpayments on OML 128.

Both companies had sought repayment of $1 billion by NNPC to cover the excess amount earned when redistributing revenue from production on the deepwater block, also known as the Agbami-Ekoli field.

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