Page 6 - AfrElec Week 35

AfrElec GAS-FIRED GENERATION AfrElec

Nigeria investigates NLNG

dividend withdrawal charges

NIGERIA NIGERIA’S Senate has ordered a probe of alle- the 2021-2023 period. At that hearing, Eyono
gations that the Nigeria LNG (NLNG) consor- Fatai-William, NLNG’s general manager for
tium illegally appropriated $18bn over a 15-year external relations, presented documents show-
period. ing that the consortium had paid more than
The Senate revealed in a statement last week $18bn worth of dividends to NNPC between
that it had instructed General Ahmed Idris, the 2004 and 2019.
country’s accountant general, to look into the Nigerian officials appear to have greeted
charges in greater detail. It said it had ordered NLNG’s figure with some scepticism. Idris was
Idris to investigate the matter and submit a quoted in the Senate statement as saying that it
report to members of the Senate in two weeks. was “difficult to determine with any certainty”
NLNG stands accused of making unauthor- exactly what the circumstances of the consorti-
ised withdrawals from an account used to cover um’s dividend payments to NNPC had been.
dividend payments to its largest shareholder, Earlier this year, NLNG said there was no
Nigerian National Petroleum Corp. (NNPC). truth to charges of illegal withdrawals from
The Senate acknowledged this in its statement, the special federal account that takes receipt of
saying: “The accountant general was mandated NNPC’s share of dividends and then distributes
to investigate among other things if the amount the money among the country’s three tiers of
was actually remitted to NNPC, how much was government. It also denied that high-ranking
actually remitted to the Federation Account, if officials – including Mele Kyari, the general
there is any deduction by NNPC, how much was managing director of NNPC, and Tony Attah,
deducted and who authorised the deductions.” the managing director of NLNG itself – had
Lawmakers took this step after NLNG repre- played a role in the removal of funds from the
sentatives took part in a Senate committee hear- account. ™
ing on the federal government’s budget plans for
TAXATION

PIB to reduce tax burden

NIGERIA NIGERIAN Minister of State for Petroleum Sylva explained that Nigeria’s government
Resources Timipre Sylva has indicated that the had drawn up the final draft of the PIB, which
government’s proposed Petroleum Industry Bill was submitted to the National Assembly for
(PIB) will reduce the tax burden on the oil and consideration on August 18, with the intent of
gas sector. establishing an investment climate capable of
Speaking at a meeting hosted by the Nige- compensating for losses sustained during the
rian Association of Petroleum Explorationists coronavirus (COVID-19) pandemic. He also
(NAPE), a local industry group, Sylva said that stressed, though, that Abuja also hoped to ensure
federal authorities were “not unmindful that the that current investors could continue to operate
industry players are of the view that the current profitably in the country.
level of taxation on onshore and shallow-water To this end, he said, Nigeria will offer oil and
operation is excessive.” As such, he stated, offi- gas companies options for renegotiating (or pre-
cials in Abuja sought to ensure that the new oil serving) their contracts. “Investors in existing
law would offer more favourable conditions. assets will be able to sign conversion contracts to
More specifically, he said, the PIB seeks to obtain better terms for existing production and
lower taxes on new investments, as well as ongo- be able to explore and produce parts of the exist-
ing projects. Though he did not say exactly how ing blocks under the new terms,” he declared.
far rates might fall, he did describe the planned “Investors that also want to continue operating
cuts as “significant.” He was also quoted by Africa under current fiscal terms can elect to do so.”
Oil + Gas Report as saying that the PIB would He added that Abuja was keen to ensure that
reduce royalties, especially for fields where pro- outside investors supported social welfare pro-
duction levels are low. grammes. “Host communities will be adequately
“[It] is therefore our hope that the future is covered to foster sustainable prosperity within
more positive and attractive for the Nigerian the communities, [ensuring] direct social and
petroleum industry after the passage of the PIB,” economic benefits from petroleum operations
he declared. [for] the host communities,” he said.™

P6 www. NEWSBASE .com Week 35 03•September•2020