Senate probes alleged N1.2tn revenue loss to oil firm

Senate probes alleged N1.2tn revenue loss to oil firm

The Senate on Tuesday constituted a seven-member ad hoc committee to investigate an alleged N1.2tn oil revenue loss to the Federal Government owing to an alleged breach by Sinopec Addax Petroleum.

The ad hoc committee which is chaired by Senator Aliyu Abdullahi has six other members – Gershom Bassey; Biodun Olujimi; Ahmad Baba Kaita; Jubril Isah; Michael Nnachi; Clifford Ordia; and Haliru Jika.

The decision to investigate the revenue loss which should have accrued to the Federal Government was contained in a resolution by the Senate after it considered a motion sponsored by Bassey.

The Senator noted that in 2000/2001, the Federal Government had provided a Fiscal Incentive Package to Addax Petroleum Company.

He said the development saw to the reduction of the company’s Petroleum Profit Tax from 85 per cent in 1998 while its Production Sharing Contract was reduced to 60 per cent in the 2001 Fiscal Incentive Package.

He said the company’s share of oil lifting increased from about 45 per cent to 56 per cent.

The lawmaker said Addax Petroleum followed through by investing to grow production from about 10,000bpd in the year 2000 to over 100,000bpd by 2008.

He noted that after the purchase of Addax Petroleum by SINOPEC in 2009, “the assets had witnessed significant production decline due to poor investment decisions making production levels to fall presently to approximately 30,000bpb with no developed gas.”

Bassey said, “SINOPEC Addax despite holding a 100 per cent Production Sharing Contract with oil mining leases OML-123, OML-124, OML-126 has refused to stick to its end of the bargain to continue investing in the operated assets leading to a revenue loss of about $3.55bn per year by the Nigerian government.”

The lawmaker said in the fourth quarter of 2018, the lack of competent operations by SINOPEC-ADDAX made five Nigerian general managers and their deputies to exit the company voluntarily.

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