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Nigeria seeks arrears from Shell and Exxon

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A logo on a Shell petrol station is seen in west London on April 29, 2008. REUTERS/Toby Melville

Nigeria seeks arrears from Shell and Exxon

Tue May 20, 2008 7:12pm BST

By Felix Onuah

ABUJA (Reuters) – Nigeria is seeking $1.91 billion (965 million pounds) it says it is owed by Royal Dutch Shell (RDSa.L:QuoteProfileResearch) and ExxonMobil (XOM.N: QuoteProfileResearch) under the terms of oil production sharing contracts governing two offshore fields, the presidency said on Tuesday.

President Umaru Yar’Adua had ordered state oil firm NNPC to take “immediate steps” to recover the money as part of efforts to ensure Nigeria was not losing revenue from the multi-billion dollar contracts for its deep water fields, his office said.

“His administration will continue to do everything possible to ensure that Nigeria derives maximum economic benefits from the exploitation of its God-given resources,” the presidency said in a statement.

Nigeria is seeking $850 million from Shell and $646.3 million from Exxon which it says accrued to the NNPC as capital allowance from the Bonga and Erha fields respectively, the statement said.

The NNPC and the government were also seeking $414.6 million they say are owed from Bonga gas sales and taxes.

“As these matters are subject of ongoing discussions between NNPC, (Shell’s local unit) SNEPCo and other partners in block OML 118 (which includes Bonga) we have no further public comments to make at this stage,” a Shell spokeswoman said.

Exxon officials were not immediately available for comment.

Exploration licences for the two fields were awarded under a production sharing contract which allows the investor to recoup all their costs before sharing profits with the government, and paying royalties and taxes.

Yar’Adua had told Nigeria’s largest investors shortly after he took power about a year ago that Africa’s top oil producer wanted a greater share of profits from the offshore fields.

The statement said he had also directed the federal revenue service to pursue income tax payments due from Shell and Exxon on the operations of the Bonga and Erha fields.

It also added that all future gas sales agreements with oil multi-nationals would be extended to include natural gas liquids, which were not covered by previous deals.

The statement said Yar’Adua would soon unveil his long-awaited agenda for the total restructuring of the oil and gas sector, but gave no further details.

(Writing by Tume Ahemba; Editing by Nick Tattersall)

 

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