FINAL REPORT

OIL AND GAS INDUSTRY AUDIT 2022

AN INDEPENDENT REPORT ASSESSING AND

RECONCILING PHYSICAL, PROCESS AND
FINANCIAL FLOWS WITHIN NIGERIA’S OIL AND GAS
INDUSTRY

Funded
by
Federal Government of Nigeria in Furtherance of the Country’s
Commitment to EITI

Prepared

By

September 2024
Table of Contents
Abbreviations and Acronyms .......................................................................................................... 5
List of Crude Type and Abbreviation .............................................................................................. 7
List of Appendix ............................................................................................................................. 8
List of Tables ................................................................................................................................... 9
List of Figures ................................................................................................................................11
CHAPTER 1 ................................................................................................................................ 12
Introduction ................................................................................................................................. 12
1.1. Background Information ................................................................................................... 12
1.2. Objective of the Report ..................................................................................................... 12
1.3. Scope of Work ................................................................................................................... 14
1.4. Data Collection, Sources and Basis of Reporting ............................................................. 15
1.4.1. Data Collection and Sources ..................................................................................... 15
1.4.2. Basis of Reporting..................................................................................................... 15
1.5. Data Completeness, Accuracy, Quality and Assurance .................................................... 17
1.5.1. Assessment of Data Quality and Assurance.............................................................. 17
1.6. Materiality of the Report ................................................................................................... 19
1.6.1. Revenue Streams ....................................................................................................... 20
1.6.2. Covered Companies .................................................................................................. 21
1.6.3. Government Entities ................................................................................................. 25
1.6.4. Quantitative Assessment of Data Quality ................................................................. 26
1.6.5. Interpretation of IA’s Impact Rating on the Observations ........................................ 26
CHAPTER 2 ................................................................................................................................ 27
Contracts, Licences, Leases and Beneficial Ownership .......................................................... 27
2.1. Contracts, License and Leases Allocation ........................................................................ 27
2.2. Register of Licenses .......................................................................................................... 28
2.3. Disclosure of Contracts and Licenses ............................................................................... 28
2.4. Beneficial Ownership........................................................................................................ 29
2.5. Anti-Corruption Policies in the Oil and Gas Industry ...................................................... 29
CHAPTER 3 ................................................................................................................................ 30
Exploration, Production and Export......................................................................................... 30
3.1. Exploration and Reserves ................................................................................................. 30
3.1.1. Exploration ................................................................................................................ 30
3.1.2. Proven and Unproven Reserves ................................................................................ 31
3.1.3. Joint Development Zone ........................................................................................... 32
3.2. Production ......................................................................................................................... 33
3.2.1. Crude Oil Production ................................................................................................ 33
3.2.1.1. Federation Entitlement to JV Crude Oil Production ............................................. 39
3.2.1.2. Crude Oil Losses and Deferment .......................................................................... 41
3.2.2. Gas Production .......................................................................................................... 46
3.2.2.1. Gas Flare, Un-Accounted, Shrinkage and Lift Gas .............................................. 51
3.3. Crude Lifting and Sales .................................................................................................... 52
3.3.1. Crude Oil Lifting....................................................................................................... 52
3.3.2. Sales of Crude Oil ..................................................................................................... 54

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 3.3.2.1. Tendering for Crude Oil Sales .............................................................................. 54
3.3.2.2. NNPC Limited Pricing of Crude Oil .................................................................... 56
3.3.2.3. Crude Oil Sales and Proceeds ............................................................................... 57
3.3.2.4. Federation Export and Domestic Sales of Crude Oil ............................................ 58
3.3.2.5. Non-Financial Flows ............................................................................................. 59
3.3.2.5.1. NNPC In-Kind Lifting from MCA, PSC and SC ................................................. 59
3.3.2.5.2. Cash Call Liability and Related Statutory Payments ............................................ 60
3.4. Gas Utilisation and Sales .................................................................................................. 60
3.4.1. Gas Utilisation .......................................................................................................... 61
3.4.2. Federation Entitlement from Gas Sales .................................................................... 62
3.4.3. Federation Gas and Feedstock Sales ......................................................................... 62
CHAPTER 4 ................................................................................................................................ 64
Climate Change, Energy Transition and NEITI 2022-2023 Industry Reporting ................. 64
4.1. Climate Change and Energy Transition Efforts by Oil and Gas Companies in Nigeria ... 64
4.2. Companies’ Greenhouse Gas Emissions ........................................................................... 66
CHAPTER 5 ................................................................................................................................ 67
Revenue Collection and Reconciliation ..................................................................................... 67
5.1. Total Revenue from the Sector ......................................................................................... 67
5.2. Distribution of Revenue from the Sector .......................................................................... 67
5.3. Ten-Year Trend of Total Financial Flows ......................................................................... 68
5.4. Disaggregation of Revenue Flows .................................................................................... 69
5.4.1. Reconciliation of Revenue Flows ............................................................................. 71
5.5. Outstanding Liabilities ...................................................................................................... 73
CHAPTER 6 ................................................................................................................................ 74
Project Cost ................................................................................................................................. 74
6.1. Joint Venture Cost: Cash Call ........................................................................................... 74
6.1.1. JV Partners ................................................................................................................ 74
6.1.2. Cash Call Budget ...................................................................................................... 76
6.1.3. Cash Call Funding Account ...................................................................................... 76
6.1.4. Cash Call to JV Operators......................................................................................... 78
CHAPTER 7 ................................................................................................................................ 80
Midstream and Downstream Operations ................................................................................. 80
7.1. Midstream Operations ....................................................................................................... 80
7.1.1. Refinery Operations .................................................................................................. 80
7.1.2. Domestic Crude Supply Obligations ........................................................................ 81
7.1.3. Associated and Non-Associated Gas and Crude Pipeline Infrastructure .................. 81
7.1.4. NNPC Refineries’ Balance ....................................................................................... 82
7.2. Downstream Operations.................................................................................................... 83
7.2.1. Domestic Crude Allocation and Utilisation .............................................................. 83
7.2.2. Product Import Valuation .......................................................................................... 84
7.2.3. PMS Price Differentials ............................................................................................ 84
7.2.4. Products Imported ..................................................................................................... 85
7.2.4.1. Products Supplied (Imported) ............................................................................... 85
CHAPTER 8 ................................................................................................................................ 87
Social and Economic Spending .................................................................................................. 87

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8.1. Infrastructure Provisions and Barter Arrangement ........................................................... 87
8.1.1. NNPC Limited Fiscal Commitment: Loan, Guarantee and Contingent ................... 87
8.1.2. Tax Credit and Waiver for Investment Promotion in the Sector ............................... 92
8.2. Social Expenditures .......................................................................................................... 92
8.3. Quasi-Fiscal Expenditures ................................................................................................ 94
8.4. Contribution of the Industry to the Economy ................................................................... 94
8.4.1. Contribution to the Economy .................................................................................... 94
8.4.2. Contribution to Exports............................................................................................. 95
8.4.3. Contribution to Government Revenue ...................................................................... 95
8.4.4. Employment and Gender .......................................................................................... 96
8.5. Environmental Impact of the Industry Activities .............................................................. 97
CHAPTER 9 ................................................................................................................................ 98
Outcomes and Impact ................................................................................................................. 98
9.1. Updates on Past Recommendations from NEITI 2021 Oil and Gas Report ..................... 98
9.2. Observations, Finding and Recommendations ................................................................115

4
Abbreviations and Acronyms
Abbreviation Description
ABEX Abandonment Expenditure
BBL Barrels
BCPD Barrel of Condensate Per Day
BMS Biological Monitoring Studies
BOPD Barrel of Oil Per Day
BPE Bureau of Public Enterprises
BSCF Billion Standard Cubic Feet
BTU British Thermal Unit
CAPEX Capital Expenditure
CBN Central Bank of Nigeria
CIT Company Income Tax
DCSO Domestic Crude Supply Obligations
EBS Environment Baseline Study
ECM Environmental Compliance Monitoring
EES Environmental Evaluation Studies
EIA Environmental Impact Assessment
EITI Extractive Industries Transparency Initiative
EMP Environmental Management Plans
ESR Environmental Screening Report
EWDP Effluent Waste Discharge Permits
FDP Field Development Plan
FEC Federal Executive Council
FIRS Federal Inland Revenue Service
FMEv Federal Ministry of Environment
FMFB&NP Federal Ministry of Finance, Budget and National Planning
FTSA Financial / Funding/ Financing and Technical Service Agreement
GHG Greenhouse Gas
GHGEMP Greenhouse Gas Emission Management Reports
HCDT Host Community Development Trust
HYPREP Hydrocarbon Pollution Remediation Project
IA Independent Administrator
ICRC Infrastructure Concessioning Regulatory Commission
IFRS International Financial Reporting Standard
IPSAS International Public Sector Accounting Standard
JDA Joint Development Authority
JV Joint Venture
KRPC Kaduna Refining and Petrochemical Company Limited
LDAR Leak Detection and Repair
LTC License to Construct
LTE License to Establish
LTO License to Operate

5
Abbreviation Description
MBBL Thousand Barrels
MBTU Thousand British Thermal Unit
MF Marginal Field
MMBBL Million Barrels
MMSCF/D Million Standard Cubic Feet Per Day
MMSTB Million Stock Tank Barrel
MT Metric Tons
NCD Nigeria Content Development
NCDMB Nigerian Content Development and Monitoring Board
NCDMB Nigerian Content Development and Monitoring Board
NDDC Niger Delta Development Commission
NDDC Niger Delta Development Commission
NEITI Nigeria Extractive Industries Transparency Initiative
NESREA National Environmental Standards and Regulations Enforcement Agency
NESS Nigerian Export Supervision Scheme
NMDPRA Nigerian Midstream and Downstream Petroleum Regulatory Authority
NNPCL Nigerian National Petroleum Company Limited
NOSDRA National Oil Spill Detection and Response Agency
NUPRC Nigerian Upstream Petroleum Regulatory Commission
OAGF Office of the Accountant-General of the Federation
OPEX Operating Expenditure
PHRC Port Harcourt Refinery Company
PIA Petroleum Industry Act
PIAR Preliminary Impact assessment Report
PMS Premium Motor Spirit
PPT Petroleum Profit Tax
PSC Production Sharing Contract
RSP Radiation Safety Permit
SC Service Contract
SCF Standard Cubic Feet
SETC Safety and Emergency Training Centers
SIRS State Internal Revenue Service
SOW Scope of Work
SR Sole Risk
STB Stock Tank Barrel
TOR Terms of Reference
UOM Unit of Measurement
VIP Very Important Person
WRPC Warri Refining and Petrochemical Company Limited

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List of Crude Type and Abbreviation
Crude Acronym

Abo Crude Abo

Agbami Condensate Agbami
Ajapa Blend Aja
Aje Condensate Aje
Akpo Condensate Akpo
Amenam Amenam
Antan Crude Antan
Anyala Madu Anya
Anyala Madu Anwa
Bonga Crude Bonga
Bonny Light BL
Brass Blend BB
EA EA
Ebok Crude Ebok
Egina Crude Egina
Erha Crude Erha
Escravos Light EL
Forcados Blend FB
Ima Ima
Jones Creek Jones
Nembe Crude Nembe
Nuway Nuway
Okono Crude Okono
Okwori Crude Okwo
Okwuibome Blend Okwui
Otakikpo Crude Otaki
Oyo Crude Oyo
Pennington Crude Pen
Qua Iboe QIB
Usan Crude Usan
Yoho Crude Yoho

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List of Appendix
1. Terms of Reference
2. NEITI NSWG Materiality Decision
3. Inception Report
4. Context Report
5. Total Crude Oil Production and Lifting Volumetrics
6. Total Gas Production and Utilisation Volumetrics
7. NNPC Limited Lifting and Sales Per Bill of Lading and Vessel (Federation, NNPC Ltd, FIRS,
NUPRC)
8. Payments Project Level Reporting
9. Cash Call Report
10. NNPC Limited Petroleum Products Importation and Vessel Movement
11. Financial Liabilities
12. Schedule of GHG Emission
13. Schedule of NNPC Limited Approved Road Infrastructure under the Tax Waiver Scheme
14. NNPC Limited Imported PMS Valuation: Quantity, Cost of Supply, Revenue and Under
Recovery
15. Employment in the Sector

8
List of Tables
Table 1: Objectives of the NEITI Oil and Gas Audit .................................................................... 12
Table 2: Data Collection Instrument and Methodology ................................................................ 15
Table 3: CBN Average Exchange Rate for the 2022-2023 Oil and Gas Industry EITI Reporting 16
Table 4: NNPC/FAAC Monthly Exchange Rate........................................................................... 16
Table 5: Assessment of Data Quality ............................................................................................ 17
Table 6: Materiality Threshold and Assessment: Company and Revenue Streams Levels .......... 19
Table 7: Revenue Streams: January to June 2021- Pre-PIA, 2021 Implementation ..................... 20
Table 8: Reconciled and Unilateral Disclosed Revenue ............................................................... 21
Table 9: Reconciled and Un-Reconciled Companies.................................................................... 21
Table 10: Reconciled Companies.................................................................................................. 22
Table 11: Unreconciled Companies .............................................................................................. 24
Table 12: Government Entities Covered in the Report ................................................................. 25
Table 13: Other Related Entities Covered in the Report............................................................... 26
Table 14: Quantitative Assessment of Data Quality ..................................................................... 26
Table 15: Interpretation of IA’s Impact Rating of the Observations ............................................. 26
Table 16: Contracts, Licenses and Leases Allocated as of Start of the Year and End-Year .......... 27
Table 17: Comparison of Register of Licenses and Actual License Document ............................ 28
Table 18: Comparison of Register of Licenses and Publicly Available Document ...................... 28
Table 19: Company’s Responses on Beneficial Ownership Information ..................................... 29
Table 20: Company’s Responses on Anti-Corruption Polices and Implementation ..................... 29
Table 21: Approved Field Development Plans ............................................................................. 30
Table 22: Company Responses on Proven and Unproven Reserves ............................................. 31
Table 23: Reserves: NUPRC ......................................................................................................... 31
Table 24: Activities of the Joint Development Zones ................................................................... 32
Table 25: Disparity in Crude Oil Production ................................................................................ 33
Table 26: Crude Oil Production by Producing Companies ........................................................... 35
Table 27: Federation Entitlement to JV Production ...................................................................... 40
Table 28: Disparity in Crude Oil Losses ....................................................................................... 41
Table 29: Crude Losses to Metered Production at Flow Station Based on Crude Type and
Respective Producer...................................................................................................................... 41
Table 30: Disparity in Crude Oil Production Deferment .............................................................. 44
Table 31: Crude Oil Production Deferment (Scheduled and Unscheduled) ................................. 44
Table 32: Gas Production by Companies on Asset Basis ............................................................. 47
Table 33: Total Crude Lifting........................................................................................................ 52
Table 34: Export and DSDP Sales Tendering in 2022 .................................................................. 54
Table 35: Successful bidders for Direct Sales Direct Purchases (DSDP) in 2022 ....................... 55
Table 36: Crude Oil- Total Sales Value ......................................................................................... 58
Table 37: Crude Oil- Total Sales Quantity .................................................................................... 58
Table 38: Sales of Federation Crude Oil ....................................................................................... 58
Table 39: 2022 Federation Export and Domestics Crude Sales Quantity and Value .................... 59
Table 40: In-Kind Payment on Crude Oil, Gas and Feedstock ..................................................... 59
Table 41: Federation Entitlement from Gas Sales ........................................................................ 62
Table 42: NNPC Ltd and NUPRC Gas Sales................................................................................ 62

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Table 43: Gas Sales Quantity and Value ....................................................................................... 63
Table 44: Gas Sales Proceeds ....................................................................................................... 63
Table 45: Key Efforts of Companies in the Oil and Gas Sector in Nigeria .................................. 64
Table 46: NEITI 2022-2023 Industry Report on Climate Change ................................................ 65
Table 47: 2022 Companies Responses to Climate Change Polices and Implementation Status .. 65
Table 48: 2022 Company Responses Greenhouse Gas Emission ................................................. 66
Table 49: Total Revenue from the Sector ...................................................................................... 67
Table 50: Disaggregation of Revenue Flows ................................................................................ 69
Table 51: Reconciliation of Revenue Flows ................................................................................. 72
Table 52: JV Partners And Equity Holding ................................................................................... 75
Table 53: 2022 OPCOM Approved Cash-Call Budget ................................................................. 76
Table 54: Summary of Inflow and Outflow into Joint Venture Cash Call Bank Accounts........... 77
Table 55: Analysis of Total Inflow to JVCC Accounts ................................................................. 77
Table 56: Analysis of Total payments from JVCC Accounts ....................................................... 77
Table 57: Summary of NUIMS Overheads performance and 2022 Funding ............................... 78
Table 58: Details of Outflow from Joint Venture Cash Call Bank Account ................................. 78
Table 59: Refinery Licenses and Approvals Issued in 2022 ......................................................... 80
Table 60: Significant Pipeline Infrastructure Investment and Projects in the Midstream ............ 81
Table 61: PHRC Refinery Balance (Crude Material Balance) ..................................................... 82
Table 62: PHRC Refinery Balance (Products Material Balance) ................................................. 82
Table 63: WRPC Refinery Balance (Crude Material Balance) ..................................................... 82
Table 64: WRPC Refinery Balance (Products Material Balance) ................................................ 83
Table 65: NNPC Limited Imported PMS Cost, Revenue and Under Recovery ........................... 84
Table 66: Product Supplied (Imported)......................................................................................... 85
Table 67: Status of NNPC Limited Commitments and Contingencies as of 31st July 2024 ........ 88
Table 68: Status Update of NNPC Limited Tax Credit Under the Scheme: 30 April 2024 .......... 92
Table 69: Host Community Development Remittance ................................................................. 92
Table 70: Voluntary Social Expenditure by Company .................................................................. 93
Table 71: Voluntary Social Expenditure by Utilisation ................................................................ 93
Table 72: Quasi-Fiscal Expenditures ............................................................................................ 94
Table 73: Trend of Contribution of the Sector to Nigeria’s Total GDP (2019 – 2022)................. 95
Table 74: Contribution of the Sector to Total Export.................................................................... 95
Table 75: Contribution of the Sector to Government Revenue..................................................... 95
Table 76: Company Responses on Gender Policies in the Sector................................................. 96
Table 77: Total Employment in the Sector .................................................................................... 96
Table 78: Employment Distribution Based on Nationality and Gender ....................................... 97
Table 79: Environmental Incidence Management ........................................................................ 97
Table 80: Observations and Recommendations for 2022-2023 Extractive Reporting ................116

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List of Figures
Figure 1: EITI Process .................................................................................................................. 14
Figure 2: Data Quality Lifecycle .................................................................................................. 17
Figure 3: Ten-Year Trend of Fiscalised Crude Oil Production in Nigeria Million Barrels ........... 34
Figure 4: Ten-Year Trend of Crude Oil Losses in Nigeria Million Barrels .................................. 43
Figure 5: Five-Year Trend of Deferred Crude Oil Production (Million Barrels) .......................... 45
Figure 6: Gas Production - Million SCF (MMSCF) ..................................................................... 46
Figure 7: Ten (10) Year Trend of Flare Gas (Billion SCF) ........................................................... 51
Figure 8: Ten (10) Year Trend of Un-Accounted, Shrinkage and Lift Gas (Billion SCF) ............ 52
Figure 9: Five-Year Trend of Crude Oil Lifting - mbbls- 2018-2022 ........................................... 54
Figure 10: 2022 NNPC Limited Monthly Trend of Crude Oil Selling Prices .............................. 56
Figure 11: Monthly Global Comparison of NNPC Ltd Crude Oil Selling Prices (US$/ Bbl) ...... 57
Figure 12: Five-Year Trend of Gas Utilisation- Million SCF ....................................................... 61
Figure 13: Revenue Distribution Chart (Billion Dollars) ............................................................. 68
Figure 14: Ten-Year Trend of Total Financial Flows .................................................................... 68
Figure 15: Seventh (17) Year Trend of Petroleum Products Price Differentials- 2006 – 2022 .... 84
Figure 16: PMS Importation Ten-Year Trend (2013-2022) (Billion Litres) ................................. 85
Figure 17: 2022 Monthly Product Importation (Billion Litres) .................................................... 86

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CHAPTER 1
Introduction
The Extractive Industries Transparency Initiative (EITI) aims to enhance government and
company systems, facilitate informed public discourse, and foster a better understanding of the
operations of the extractive sector. Nigeria Extractive Industries Transparency Initiative (NEITI)
drives the implementation of the EITI Standards. The 2022 NEITI report retrospectively adhere to
the provisions outlined in the 2023 EITI Standard and the NEITI Act of 2007. It leverages the
advancements made in the NEITI 2021 Oil and Gas Industry Report and addressed gaps identified
in the 2021 Report.

1.1. Background Information

The Extractive Industries Transparency Initiative (EITI) is a global standard for improving
transparency and accountability in the oil, gas, and mining sectors. The EITI implementation has
two core components: Transparency and Accountability. See Contextual Report for details.

1.2. Objective of the Report

The assignment was conducted leveraging the most recent NEITI reports for the oil and gas sector
- 2021, the latest NEITI Fiscal Allocation and Statutory Disbursement Report as well as the NSWG
strategy for the implementation of the EITI in Nigeria detailed in the NEITI Strategic Plan for
2022 - 2026.

See Appendix 1 for the detailed objectives of the Report are outlined in Section 2 of the Terms of
Reference for the Reports. The requirements of the Reports and the tasks carried out by the IA to
achieve the specific objectives are outlined below.

Table 1: Objectives of the NEITI Oil and Gas Audit

Key Requirement Description

• Report on all aspects of the regulatory framework for the oil
Regulatory Framework and and gas industry: including the legal framework, fiscal
Procedures regime, roles of government entities and reforms, and laws
and regulations relating to addressing corruption risks in the
oil and gas sector.
• Provide an overview of the statutory procedures for awards
and transfers of licences and assess if these procedures are
followed in practice.
• Disclose comprehensive information on property rights to oil
and gas licences and leases, including beneficial owner
information and public accessibility of contracts and licences.
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Key Requirement Description
• Disclose comprehensive information about state-owned
enterprise participation in the oil and gas sector.
• Disclose an overview of the exploration activities in the oil
Exploration and Production and gas sector highlighting its potential, recent, ongoing, and
Information planned significant exploration activities.
• Disclose information about oil and gas production levels and
a valuation of extractive output.
Export And Domestic • Disclose information on oil and gas export volumes and a
Information valuation of exports.
• Disclose all company payments and government revenues
Revenue and Payment from the oil and gas sector together with associated amounts
Management and lifted (oil) or sold (natural gas) to the required level of
Distribution disaggregation while adhering to approved data quality
assurance procedures.
• Disclose the revenues ultimately transferred to the Federation
Account.
• Disclose information on revenue management and
distribution, highlighting subnational transfers and revenue
sustainability.
• Report on the revenue flows amongst the Covered Entities and
any investment by the Federation in the oil and gas industry.
• Report on balances payable/receivable at the end of the audit
period for certain types of financial flows as described by the
National Stakeholder’s Working Group (NSWG) contained in
the Material Decision Information Memorandum.
• Reconcile the physical/financial transactions reported by
payers and recipients as appropriate, as per the scope set out
in the Terms of Reference alongside the NSWG Material
Decision Information Memorandum.
• Provide information on government and companies' energy
Climate Change and transition plans and policies including energy transition and
Energy Transition Plan climate risk considerations in revenue forecasting.
• Review and present greenhouse gas (GHG) emissions data
from the oil and gas sector.
• Evaluate and present information on companies' social and
environmental contributions including assessing their
compliance with legal and contractual obligations to
undertake social and environmental expenditures.
Contribution to Gross • Obtain, assess and include information on the contribution of
Domestic Product (GDP) the oil and gas sector to the economy.
Outcomes and Impacts • Make observations and recommendations that will support
policymaking.

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1.3. Scope of Work
The period covered in the Report is from 1st January 2022 to 31st December 2022. The EITI process
complements, assesses, and improves existing reporting and auditing systems. The process has six
(6) conceptual phases as shown below.

Figure 1: EITI Process

14
1.4. Data Collection, Sources and Basis of Reporting
Data collection is an integral part of the audit process, and this section discusses data collection
methodology and sources, and the basis of reporting.

1.4.1. Data Collection and Sources

The data are from both primary data and secondary data sources. The table below shows the
data collection methodology.

Table 2: Data Collection Instrument and Methodology

Covered Primary Data Secondary Data

Entities
Companies •
NEITI Audit Template • Audited Financial
•
Template Checklist Statements
•
Audit Information Request Checklist • Systematic Disclosed
•
NEITI Audit Management System Information on official
•
IA Electronic Data Collection- Google website
Drive, Microsoft SharePoint and One
Government drive. • Systematic Disclosed
• Template Workshop with all Covered Information on official
Entities. website
• Interviews and Continuously Interaction • Annual Reports
for Clarifications
• Sustained Visits/ Meetings and
Engagement with Covered Entities
• Systems Walkthrough Sessions
• Company Data Verification/ Revalidation
Workshop
Source: NEITI 2022-2023 OGA, 2024

1.4.2. Basis of Reporting

The NEITI reporting is based on related international standards including but not limited to
ISA 530 (Audit Sampling), ISA 500 (Audit Evidence), ISRS 4400 (Engagement to Perform
Agreed-Upon Procedures), and ISRS 4410 (Compilation Engagements). These standards
complemented the Data Quality, Assessment, and Documentation Procedure described in this
report. Additionally, the IA utilized its professional judgment on case-by-case basis.

The 2022 aggregated revenue flow in the sector is stated in United States of America Dollars
(US$), which is the reporting currency for the 2022- 2023 NEITI Oil and Gas Industry Audit
except otherwise stated in the Report. The Central Bank of Nigeria (CBN) average exchange
rates1 applied is shown in the table below.

1
CBN Exchange Rate: https://www.cbn.gov.ng/rates/ExchRateByCurrency.asp

15
Table 3: CBN Average Exchange Rate for the 2022-2023 Oil and Gas Industry EITI Reporting

Year Naira/ US$ Euro/USD GBP/USD

2022 423.30 1.05 1.24
2021 399.68 0.85 0.73
Source: NEITI 2022-2023 OGA, 2024

Furthermore, the average monthly rate advised by the Federation Accounts Allocation
Committee (FAAC) (as shown in the table below) were used for the NNPC-related transactions
and other designated cases.

Table 4: NNPC/FAAC Monthly Exchange Rate

Month 2022 2021

Naira/ US$ Naira/ US$
January 389.00 379.00
February 389.17 382.54
March 389.30 378.88
April 389.66 382.54
May 392.35 383.47
June 394.80 382.80
July 401.30 384.27
August 403.87 384.27
September 409.50 384.35
October 418.18 387.01
November 417.42 386.30
December 432.78 388.68

Annual Average 402.28 383.68

Source: NEITI 2022-2023 OGA, 2024

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1.5. Data Completeness, Accuracy, Quality and
Assurance
The Independent Administrator (IA) team adopted a data quality assessment methodology that
ensures the transparency and accountability of the Reporting process. The strategy adopted for
data quality is shown in Figure below.

Figure 2: Data Quality Lifecycle

Source: NEITI 2022-2023 OGA, 2024

1.5.1. Assessment of Data Quality and Assurance

Table below shows the assessment of data quality based on the defined Data Quality Lifecyle.

Table 5: Assessment of Data Quality

# Steps Actions IA Assurance

1 Data • Distributed the following to the covered
Collection, entities:
Review and ✓ Audit data collection templates
Validation ✓ Template Checklist

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# Steps Actions IA Assurance
✓ Information Request Checklist Returned Templates,
• Reviewed the populated and returned the subsequent
NEITI Audit data collection templates of explanation and
sixty-two (62) companies. additional
• Reviewed the filled template checklist as information/
well as the Audit Information Request clarification are
Checklist relevant and
2 Data Cleaning Performed data cleaning of returned template sufficient, except
3 Data • Obtained and reviewed the source document otherwise stated in
Verification as contained in the Audit Information this report.
Request Checklist to verify and validate
populated data in the returned template.
• Requested additional supporting
documentation where necessary.
• Reviewed audited financial reports and
management accounts (where the audited
financial statements are not available).
• Obtained and reconciled production and
lifting volumetrics with tripartite signed off
report among the NUPRC, Companies and
NNPCL.
4 Data • Aggregated government revenue from the
Completeness Revenue Generating Agencies and as
and Coverage populated by covered entities.
• Obtained and reviewed RGA bank
statements.
• Reconciled the aggregated revenue with the
corresponding bank statements.
• Identified any additional revenue in the bank
statements that not covered I the audit and
disclosed under unreconciled revenue. E.g.
miscellaneous oil revenue, bank interest etc.
5 Data Reconciled the company record with RGA
Consistency records and investigated discrepancies.
6 Data • Correspondences with covered entities are
Transparency done with the designated email address for
and the exercise, copying the central email of
Accessibility NEITI Energy and Mining Department.
• Accessibility of the Contextual Report
prepared and referenced in this report.
7 Data • Obtained signed-off report post
Documentatio reconciliation workshop from the covered
n and Audit and participating companies.
Trail

18
 # Steps Actions IA Assurance
• Reconfirmed the final outcomes with
RGAs—e.g. production and lifting
volumetrics, and generated revenue.
8 Reporting and Made recommendation in subsequent sessions
Recommendat of this report.
ion
Source: NEITI 2022-2023 OGA, 2024

1.6. Materiality of the Report

Materiality of the Report is considered at the levels of the company and the revenue streams.
Materiality at the company level examined the aggregate contribution of each company to the
total payments covered in the Report. While materiality at the revenue streams level examined
the percentage of contribution of each revenue stream to the total revenue from all the streams.

Table below shows the materiality threshold and assessment at company and revenue streams
levels.

Table 6: Materiality Threshold and Assessment: Company and Revenue Streams Levels

Level Parameters Outcomes

Reconciliation Status
Description No Amount % of Total
(US$ Revenue
Billion)
Company 0.5% to the Reconciled 62 16.24 96.51%
total Companies
payment
Un-Reconciled 1 0.59 3.49%
Companies (In
Production)
Un-Reconciled 15 - 0.00%
Companies (Not in
Production)
Total 78 16.83 100.00%
Revenue NSWG Reconciled 24 32.53 90.93%
Stream Decision Revenue
Unilateral 10 3.25 9.07%
Disclosed Revenue
Total 34 35.77 100.00%
Source: NEITI 2022-2023 OGA, 2024

19
See subsection 1.6.2 for details of company payment and percentages contribution of each
covered companies to the total payment. Also, see chapter 5 for the details of revenue stream
and percentage contribution of each revenue streams to the total revenue from the sector.

1.6.1. Revenue Streams

Table below shows the revenue streams attributed to the government prior to the
implementation of the PIA, 2021.

Table 7: Revenue Streams: January to June 2021- Pre-PIA, 2021 Implementation

# Revenue Streams Responsible/

Oversight Entities
Reconciled
1 Proceeds from the sale of Federation export crude oil
2 Proceeds from the sale of profit oil
3 Proceeds from the sale of domestic crude NNPC Ltd
4 Proceeds from the sale of Federation gas
5 Proceeds from the sale of feedstock
6 Dividends from NLNG
7 Royalty (oil)
8 Royalty (gas)
9 Signature bonus NUPRC
10 Gas flare penalty
11 Concession rentals
12 NDDC 3% levy NDDC
13 NCD 1% levy NCDMB
14 Petroleum Profit Tax (PPT)
15 Company Income Tax FIRS
16 Education Tax
17 Value-added Tax
18 Withholding Tax
19 Pay As You Earn
20 Capital Gains Tax

Unilaterally Disclosed
1 Miscellaneous income (Transportation fees inclusive) NNPC Ltd
2 Stamp Duties FIRS
3 Police Trust Funds
4 National Agency for Science and Engineering Infrastructure
(NASENI)
5 Withholding Tax SIRS
6 Pay As You Earn
7 NESS fee FMF
8 Environmental Payments FMEv/ SMEv
Source: NEITI 2022-2023 OGA, 2024

20
See Contextual Report for details on description and basis of revenue collection. Table below
shows the reconciled and unilateral disclosed revenue covered in the Report.

Table 8: Reconciled and Unilateral Disclosed Revenue

Description US$ %
Billion
Total Revenue Streams 16.831 100.00%

Reconciled Streams 16.245 96.51%

Unilateral Disclosure 0.587 3.49%
Source: NEITI 2022-2023 OGA, 2024

1.6.2. Covered Companies

A total of seventy-eight were identified at the beginning of the audit exercise, comprising of
sixty-three (63) companies with crude production status while fifteen (15) companies were not
in production. From the sixty- three (63) companies with production status, sixty-two (62)
companies were reconciled because they participated in the exercise by providing the required
records. One (1) company did not participate as it did not respond to the audit request as shown
in the table below.

Table 9: Reconciled and Un-Reconciled Companies

Description # %
Total Companies at the Start of the Audit 78 100.00%

Reconciled Companies 62 79.49%

Un-Reconciled Companies (In Production) 1 1.28%
Un-Reconciled Companies (Not in Production) 15 19.23%
Source: NEITI 2022-2023 OGA, 2024

Despite reconciling sixty-two (62) companies, only twenty-eight (28) were deemed material
following a revision by the IA of the materiality threshold from 1.5% to 0.5%. These material
companies contributed significantly, accounting for US$ 15.549 billion, representing 96% of
the total payments. In contrast, the non-material companies collectively accounted for
US$695.604 million, which represents only 4% of the total payments.

In 2022, total payments in the oil and gas sector amounted to US$16.831 billion, a significant
increase compared to the US$11.848 billion recorded in 2021. This US$4.98 billion increase,
representing a 42% rise, was primarily driven by higher crude oil prices, which boosted the
value of liftings, as well as an intensified revenue collection effort by the Revenue Generating
Agencies (RGA). This highlights the sector's sensitivity to global market fluctuations and the
effectiveness of domestic revenue mobilization strategies.

21
The table below provides a breakdown of the covered companies, detailing their respective
payments, percentage (%) contribution to the total payment, and relevant remarks, indicating
whether the payments were reconciled or disclosed unilaterally

Table 10: Reconciled Companies

S/N Description Payment % of Material Non-Material
US$ Contribution US$ US$
1 Aiteo Eastern E&P 2,902,801 0.02% - 2,902,801
Co Ltd
2 All Grace Energy 1,428,035 0.01% - 1,428,035
Limited
3 Amni International 33,591,159 0.21% - 33,591,159
Petroleum Ltd
4 Antan Producing 167,345,014 1.03% 167,345,014 -
Limited
5 Aradel Holdings 276,190,049 1.70% 276,190,049 -
6 Belema Oil 245,333 0.00% - 245,333
7 Brittania U-Nigeria 30,928,613 0.19% - 30,928,613
8 Chevron Nigeria Ltd 901,635,314 5.55% 901,635,314 -
9 China Exploration & 36,466,630 0.22% - 36,466,630
Production
10 Chorus Energy 5,841,470 0.04% - 5,841,470
Limited
11 Conoil Producing Ltd 20,945,589 0.13% - 20,945,589
12 Continental Oil and 136,533,134 0.84% 136,533,134 -
Gas Company
13 Dubri Oil Company 90,795,720 0.56% 90,795,720 -
Limited
14 Elcrest Exploration 658,840,361 4.06% 658,840,361 -
and Production
Nigeria Ltd (Eland)
15 Energia Limited 11,556,828 0.07% - 11,556,828
16 Equinor Nigeria 675,235,776 4.16% 675,235,776 -
Energy Company
Limited (now
Chappal Energies)
17 Esso E&P (Offshore 253,272,295 1.56% 253,272,295 -
East) Nigeria Ltd
18 Esso E&P Nigeria 371,364,278 2.29% 371,364,278 -
Ltd
19 Excel Exploration & 5,071,169 0.03% - 5,071,169
Production Limited
20 Famfa Oil Limited 323,046,182 1.99% 323,046,182 -
21 First Exploration and 208,518,237 1.28% 208,518,237 -
Production
22 First Hydrocarbon 11,806,513 0.07% - 11,806,513
Nigeria
23 Frontier Oil Limited 12,085,851 0.07% - 12,085,851

22
S/N Description Payment % of Material Non-Material
US$ Contribution US$ US$
24 Green Energy 108,674,422 0.67% 108,674,422 -
International Limited
25 Heirs Energies Ltd 18,205,009 0.11% - 18,205,009
26 Lekoil Limited 16,731,444 0.10% - 16,731,444
27 Midwestern Oil and 47,238,582 0.29% - 47,238,582
Gas
28 Millennium Oil & 72,407 0.00% - 72,407
Gas Limited
29 Mobil Producing 2,000,899,204 12.32% 2,000,899,204 -
Nigeria Unlimited
30 Moni Pulo Ltd 4,294,148 0.03% - 4,294,148
31 NAOC (NOW 243,551,790 1.50% 243,551,790 -
Oando PLC)
32 Nd Western Limited 117,049,748 0.72% 117,049,748 -
33 Neconde Energy 260,863,286 1.61% 260,863,286 -
Limited
34 NE&PL 947,723,560 5.83% 947,723,560 -
35 Network Exploration 30,367,560 0.19% - 30,367,560
& Production Ltd
36 Newcross E&P Ltd 16,897,590 0.10% - 16,897,590
37 Newcross Petroleum 15,799,626 0.10% - 15,799,626
Limited
38 Nexen Petroleum 141,157,668 0.87% 141,157,668 -
Nigeria Limited
39 Nigerian Agip 55,000,132 0.34% - 55,000,132
Exploration (NAE)
40 OANDO Oil Ltd 14,936,575 0.09% - 14,936,575
41 OANDO PDC - 0.00% - -
42 OANDO Qua Iboe - 0.00% - -
Ltd
43 Oriental Energy 52,234,083 0.32% - 52,234,083
Resources Ltd
44 Pillar Oil Limited 167,020,139 1.03% 167,020,139 -
45 Platform Petroleum 336,992,111 2.07% 336,992,111 -
Limited
46 Prime 127 Nigeria 10,586,315 0.07% - 10,586,315
Limited (FMR
Petrobras Oil & Gas)
47 Prime 130 Nigeria 57,447,486 0.35% - 57,447,486
Limited
48 Seplat Energies Ltd 192,621,917 1.19% 192,621,917 -
49 Shell Nig. 1,926,836,272 11.86% 1,926,836,272 -
Exploration &
Production Co Ltd
50 SPDC 1,251,996,767 7.71% 1,251,996,767 -
51 Shoreline Natural 76,660,918 0.47% - 76,660,918
Resources Ltd

23
 S/N Description Payment % of Material Non-Material
US$ Contribution US$ US$
52 SINOPEC 1,692,980 0.01% - 1,692,980
53 South Atlantic Pet. 509,981,677 3.14% 509,981,677 -
Ltd
54 Star Deepwater 1,350,324,211 8.31% 1,350,324,211 -
Petroleum Limited
55 Sterling Global Oil 71,761,878 0.44% - 71,761,878
Resources Limited
56 Sterling Oil E&P 249,011,000 1.53% 249,011,000 -
Production Co Ltd
57 Texaco Nigeria Outer 19,303,924 0.12% - 19,303,924
Shelf Limited
58 Total Exploration & 661,837,600 4.07% 661,837,600 -
Production Nigeria
Ltd
59 Total Upstream 1,019,719,357 6.28% 1,019,719,357 -
60 Universal Energy 5,032,035 0.03% - 5,032,035
Ltd
61 Waltersmith 4,292,999 0.03% - 4,292,999
Petroman Oil Ltd.
62 Yinka Folawiyo 4,178,640 0.03% - 4,178,640
Petroleum Company

Total 16,244,641,413 100.00% 15,549,037,090 695,604,323

Source: NEITI 2022-2023 OGA, 2024

Furthermore, sixteen (16) companies did not participate in the audit process due to reasons
such as non-production, license revocation, and contract termination. However, three (3) of
these companies made a combined total payment of US$7.105 million to the government,
which has been duly recognized.

These non-participating companies were excluded from the reconciliation process, but their
payments to the government have been accounted for accordingly.

Table below shows the non-participating companies.

Table 11: Unreconciled Companies

# Covered Companies Payment Rationale for non-

(US$) participation
1 Consolidated Oil & Gas - No production and Payment
2 Consolidated Oil -
3 Halkin Exploration and Production - Non-Responsive
Limited
4 Allied Energy - License Revoked
5 Summit Oil - No production and Payment
6 AENR - Contract Terminated

24
 # Covered Companies Payment Rationale for non-
(US$) participation
7 Suntrust Oil Company Nigeria Limited - No production and Payment
8 Eroton - License Revoked (Now
NNPC 18 Ltd)
9 Sterling Exploration Ltd - No production and Payment
10 Esso E & P Nigeria (Deep Ventures) -
Limited
11 Sahara Field Production Limited -
(Asharami Energy Ltd)
12 Wester Ord 41,537 Below Materiality Threshold
13 Pan Ocean - No production and Payment
14 Petralon Energy Nigeria -
15 Tenoil Petroleum and Energy Services 6,438,069 Payment for VAT & WHT
16 Enageed 625,642 Non-Responsive

Total 7,105,248
Source: NEITI 2022-2023 OGA, 2024

The total payment of US$7.379 million made to the government by the unreconciled companies
in 2022 reflects a slight decrease when compared to the US$7.808 million recorded in 2021.

1.6.3. Government Entities

Table below shows the government entities covered in the audit process.

Table 12: Government Entities Covered in the Report

Category Description
1. Federal Inland Revenue Service (FIRS)
Revenue 2. Nigerian Upstream Petroleum Regulatory Commission (NUPRC)
Generating 3. Nigerian Midstream and Downstream Petroleum Regulatory Authority
Agencies (NMDPRA)
(RGA) 4. Niger Delta Development Commission (NDDC)
5. Federal Ministry of Finance, Budget and National Planning
6. Nigerian Content Development and Monitoring Board (NCDMB)
1. Central Bank of Nigeria (CBN)
Other 2. Office of the Accountant-General of the Federation (OAGF)
Government 3. Federal Ministry of Environment (FMEv)
Entities 4. National Oil Spill Detection and Response Agency (NOSDRA)
5. Hydrocarbon Pollution Remediation Project (HYPREP)
6. National Environmental Standards and Regulations Enforcement
Agency (NESREA)
Bilateral 1. Nigeria Sao-Tome Joint Development Authority
Authorities
Source: NEITI 2022-2023 OGA, 2024

25
Table 13: Other Related Entities Covered in the Report

Category Description
State-Owned Enterprise (SOE) Nigerian National Petroleum Company Limited
Midstream Gas Company Nigeria Liquified Natural Gas (NLNG) Limited
Source: NEITI 2022-2023 OGA, 2024

See Contextual Report for details of government entities covered in the audit process, revenue
types and fiscal regimes.

1.6.4. Quantitative Assessment of Data Quality

The table below shows assessment of data quality based on quantitative parameters.

Table 14: Quantitative Assessment of Data Quality

Parameters # Response Rating

# %
Covered Companies 63 62 98.4% High
Audited Financial Statement/ 28 27 96.4% High
Attested Management Accounts
NUPRC Production Signed-off 52 45 86.54% High
NUPRC Lifting Signed-off 72 60 83.33% High
Covered Entities Signed-off 63 52 82.54% High
Report
Source: NEITI 2022-2023 OGA, 2024
Level of Assurance Grading
• High: Above 79%
• Medium: Between 50% and 79%
• Low: Below 50%

1.6.5. Interpretation of IA’s Impact Rating on the Observations

The rating of the observed implications and impacts under the related sections in this Report is
in the table below.

Table 15: Interpretation of IA’s Impact Rating of the Observations

# Impact Rating Risk Interpretation

Index
A Full Compliance 5 Favourable: The system demonstrates high effectiveness.
B Partial Compliance Tolerance: The system demonstrates average
3 effectiveness but requires prompt improvements.
C Non-Compliance Not Favourable: The system exhibits critically weak
0 controls.

26
CHAPTER 2
Contracts, Licences, Leases and Beneficial
Ownership
This section discusses legal framework and fiscal regime in the oil and gas sector. Furthermore,
it discusses contract, licenses, leases and beneficial ownership.

The Petroleum Industry Act, 2021 is the principal law in the oil and gas sector. See the
Contextual Report for description of the laws, regulations and fiscal regimes in the sector.

2.1. Contracts, License and Leases Allocation

Disclosure on the processes of Contracts, Licence and Lease allocation is one of the key
indicators demonstrating transparency and accountability in the oil and gas sector. See the
Contextual Report for description, laws and regulations on the process of contract, licenses and
leases allocation in Nigeria coordinated by the NUPRC.

At total of fifty-one (51) Petroleum Prospecting Licenses (PPL) were issued in 2022 by the
NUPRC under the PIA, 2021 as shown in the table below.

Table 16: Contracts, Licenses and Leases Allocated as of Start of the Year and End-Year

License/ Lease Type Description #

PEL Existing as of start of the year -
Add: Issued during the year -
Less: Revoked during the year -
Existing as of end-year -
PPL Existing as of start of the year -
Add: Issued during the year 51
Less: Revoked during the year -
Existing as of end-year 51
PML Existing as of start of the year -
Add: Issued during the year -
Less: Revoked during the year -
Existing as of end-year -
Source: NEITI 2022-2023 OGA, 2024 (NUPRC Responses)

27
2.2. Register of Licenses
A functional Register of licenses as coordinated by the NUPRC indicates the true owners and
identity of oil and gas assets. Furthermore, it summarised the key contract terms demonstrating
transparency and accountability in the industry. See the Contextual Report for description, laws
and regulations on the Register of Licenses in Nigeria coordinated by the NUPRC. The table
below shows the analysis and comparison of Register of Licenses and actual license document.

Table 17: Comparison of Register of Licenses and Actual License Document

Parameter Register License

of Document Variance Entity Remarks
Licenses
# # #
PEL - - - No PEL was issued in 2022
PPL/OPL 51 51 - No OPL was issued in 2022
PML/OML - - - No PML/OML was issued in 2022
Source: NEITI 2022-2023 OGA, 2024

2.3. Disclosure of Contracts and Licenses

Contract and Licenses publicly available compared with the Register of Licenses is shown in
the table below. See the Contextual Report for description, laws and regulations on the
disclosure of Contract and Licenses.

Table 18: Comparison of Register of Licenses and Publicly Available Document

Parameter Register Publicly

of Available Variance Entity Remarks
Licenses
# # #
PEL - - -
PPL 51 51 - https://www.nuprc.gov.ng/
PML - - - https://www.nuprc.gov.ng/
Source: NEITI 2022-2023 OGA, 2024

28
2.4. Beneficial Ownership
There has been progress in the disclosure of the Beneficial Owner (BO). See the Contextual
Report for description, laws and regulations on the disclosure of BO. Beneficial Ownership
information was expected from sixty-two (62) reconciled companies. Table below shows the
responses from reconciled companies.

Table 19: Company’s Responses on Beneficial Ownership Information

Parameters Response
# %
Responsive Available 41 66%
Not Available 21 34%
Work-In-Progress - 0%
Non-Responsive None - 0%
Total 62 100%
Source: NEITI 2022-2023 OGA, 2024

2.5. Anti-Corruption Policies in the Oil and Gas Industry

There are legislations and Government Agencies on anti-corruption in Nigeria. See the
Contextual Report for description, laws and regulations on the anti-corruption in Nigeria. Anti-
Corruption policies and implementation status were expected from sixty-two (62) reconciled
companies. Table below shows the responses from reconciled companies.

Table 20: Company’s Responses on Anti-Corruption Polices and Implementation

Parameters Response
# %
Responsive Available 16 26%
Not Available 46 74%
Work-In-Progress - 0%
Non-Responsive None - 0%
Total 62 100%
Source: NEITI 2022-2023 OGA, 2024

29
CHAPTER 3
Exploration, Production and Export
3.1. Exploration and Reserves
This section discusses the exploration activities and reserves (proven and unproven) in the oil
and gas sector. See the Contextual Report for description, laws, regulations and actions on
Exploration and Reserves in Nigeria.

3.1.1. Exploration
Field Development Plans are plans approved for E&P companies for the development of
Oil and Gas fields. According to the Nigerian Upstream Petroleum Regulatory Commission
(NUPRC), approved FDPs have an estimated oil reserve of 758 million Stock Tank Barrels
(MMSTB) and gas reserves of 2,885 billion Standard Cubic Feet (BSCF). The projected
Capital Expenditure (CAPEX) for these plans is valued at US$ 5.859 billion, while the
Operating Expenditure (OPEX) is estimated at US$ 13.410 billion, as illustrated in the table
below. These figures represent significant investments in the exploration and development of
Nigeria's oil and gas resources.

Table 21: Approved Field Development Plans

Parameter UoM Terrain Total
Deep Land Offshore Onshore Swam
Offshore p
Number of Document - - 6 14 - 20
Approval
Estimated Oil MMSTB - - 362 396 - 758
Reserves
Estimated Gas BSCF - - 635 2,250 - 2,885
Reserves
Estimated MMSTB - - - - - -
Condensate
Reserves
Expected Oil Rate BOPD - - 54,500 107,6834 - 162,184
Expected Gas MMScf/D - - 42 807 - 849
Rate
Expected BCPD - - - - - -
Condensate Rate
CAPEX US$' M - - 3,311 2,548 - 5,859
OPEX US$' M - - 6,282 7,128 - 13,410
Source: NEITI 2022-2023 OGA, 2024 (NUPRC Responses)

30
3.1.2. Proven and Unproven Reserves

Proven and unproven reserves data was expected from sixty-two (62) reconciled companies.
Table below shows the responses from reconciled companies.

Table 22: Company Responses on Proven and Unproven Reserves

Parameters Response
# %
Responsive Available 14 23%
Not Available - 0%
Work-In-Progress - 0%
Non-Responsive None 48 77%
Total 62 100%
Source: NEITI 2022-2023 OGA, 2024

Proven reserves are economic indicators for future investment and revenue from the sector.
Crude oil reserve was 31.06 billion barrels in 2022, comparing 37.05 billion barrels in 2021A
decline of 6 billion barrels in oil reserves indicates a depletion of resources with minimal or no
significant reserve additions over the period. This underscores the need for enhanced
exploration activities and reserve replacement strategies to maintain production levels and
ensure long-term sustainability of the sector, as shown in the table below.

Table 23: Reserves: NUPRC

Description UOM 2022 2021 Change

QTY %
Crude Oil Billion Barrels 31.1 37.1 -6.0 -16.2%
Condensate Billion Barrels 5.9 5.8 0.1 1.0%
Associated Gas Trillion SCF 102.3 102.6 -0.3 -0.2%
Non-Associated Gas Trillion SCF 106.5 106.1 0.5 0.4%
Source: NEITI 2022-2023 OGA, 2024

31
3.1.3. Joint Development Zone
The Joint Development Zone is a bilateral agreement between the governments of Nigeria and
the Sao Tome and Principe. See the Contextual Report for description, laws, regulations and
mandates of the JDZ. No activities were recorded in the Joint Development Zone (JDZ) during
the period under review, as the expected operational parameters were not met, as outlined in
the table below.

Table 24: Activities of the Joint Development Zones

Parameters Description UOM 2022 2021 IA Remarks

Capital Nigerian US$ - -
Raised Government JDZ could not provide
Sao-Tome US$ - - responses
Government
Domestic US$ - -
Investment
Foreign Direct US$ - -
Investment
Exploration Developed FDP # - -
Activities Submitted FDP # - -
Approved FDP # - -
Implemented FDP # - -
Developed Rigs # - -
Developed Wells # - -
Production Crude Oil Barrels - -
Activities Gas SCF - -
Lifting and Crude Oil Barrels - -
Sales Gas SCF - -
Returns on Nigerian US$ - -
Investment Government
Sao-Tome US$ - -
Government
Domestic Investors US$ - -
Foreign Direct US$ - -
Investors
Source: NEITI 2022-2023 OGA, 2024

32
3.2. Production
Crude oil and gas production volumes are measured at various stages, including the wellheads,
production platforms, and terminals, where fiscalisation of production takes place. These stages
ensure accurate recording of production data, which is discussed in detail in the following
subsections.

3.2.1. Crude Oil Production

The crude oil production was reviewed using various sources- NUPRC systematic disclosure
on the official website, NUPRC submission during the NEITI OGA and the NUPRC signed-
off reports with companies including the NNPC Limited. Table below shows disparity in the
crude oil production in Nigeria.

Table 25: Disparity in Crude Oil Production

Description 2022
mmbbls
NUPRC Systematic Disclosure 502.99
NUPRC Submission to NEITI 485.23
NUPRC Signed-off Report 490.94
Source: NEITI 2022-2023 OGA, 2024

The 2022-2023 NEITI extractive reporting has adopted the NUPRC signed-off report generated
by NUPRC, Companies and the NNPC Limited at curtailment meetings.

Total fiscalised crude oil production was 490.945 million barrels in 2022, comparing 556.130
million barrels in 2021. Fiscalised production decreased by 11.7% from 2021 to 2022 due to
increase in production deferment in 2022.

A ten (10) year trend (2013 - 2022) of fiscalised crude oil production in Nigeria shows that the
highest production volumes of 800.488 million barrels was in 2013 and lowest of 490.945
million barrels was in 2022. This indicates that the country’s production capacity in 2022 was
at 61.3% efficiency based on the 2013 production volume.

The 38.7% inefficiency indicates lower operating capacities of the production platforms,
possible crude loss from unmetered Wellheads, increase in un-producing oil Wells due to
abandonment, amongst other possible reasons.

33
The figure below shows the ten (10) years trend of fiscalised crude oil production.

Figure 3: Ten-Year Trend of Fiscalised Crude Oil Production in Nigeria Million Barrels

450.0

400.0

350.0

300.0

250.0

200.0

150.0

100.0

50.0

-
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
JV 399.4 396.9 375.5 289.2 305.4 314.9 310.3 271.4 225.2 218.2
PSC 313.9 320.2 320.6 324.1 303.7 270.6 312.0 253.8 243.0 216.7
SC 3.2 3.0 2.5 2.2 1.5 1.3 1.3 1.1 1.0 -
SR 64.6 58.8 54.6 27.2 58.1 92.2 89.8 99.8 80.3 41.5
MF 19.3 19.7 23.4 16.6 21.8 22.1 21.8 20.6 6.7 14.5
Source: 2013 – 2021 NEITI OGA Reports; 2022-2023 NEITI OGA, 2024

Metered production dropped by 16.86% from 634.603 million barrels in 2021 to 527.637
million barrels in 2022.

Total metered production at flow station was 527.637 million barrels in 2022, comprising
490.945 million barrels (93.05%) fiscalised production, 11.246 million barrels (2.13%)
measurement error, 3.587 million barrels (0.68%) production adjustment, 21.145 million
barrels (4.01%) theft/sabotage and 714.644 thousand barrels (0.14%) as terminal adjustment.
This is shown in the table below.

34
Table 26: Crude Oil Production by Producing Companies
Producers Crude Asset Number Metered Measurement Refund/ Theft/ Termnal Fiscalized
Type Production at Error Production Sabotage Adjustment Production
Flow Station Adjustment
bbls bbls bbls bbls bbls bbls
All Grace Energy Ima 17 161,913 - (2) - - 161,915
Aradel Holdings PLC BL 54 1,441,143 - - 464,445 - 976,698
AITEO Eastern E&P BL 29 1,797,763 1,331,613 1,588 208,407 - 256,155
Company Ltd
AMNI International Okoro 112 2,898,910 - - - - 2,898,910
Petroleum Development Co.
Antan Producing Limited Okwori 126 661,815 - - - - 661,815
Antan 123 5,135,375 - - - - 5,135,375
BB 124 407,541 - - 74,173 612 332,756
Belema Oil Company Ltd BL 55 1,403,117 57,791 402 1,180,105 - 164,819
BRITANNIA U Ajapa 6 227,436 - - - 1,038 226,398
Chevron Nigeria Limited EL 49/86/90/95/8 52,529,456 - - - - 52,529,456
8/91
Consolidated Oil and Gas EL 103 228,945 - - - - 228,945
Company Limited
Chorus Energy Limited BB 56 3,390 - - 716 3 2,671
FB 56 302,328 - 3,481 26,210 - 272,637
Continental Oil and Gas Pen 59 4,630,226 - (22,644) - - 4,652,870
Dubri Oil Limited EL 96 75,045 1,492 - - - 73,553
Enageed Resource Limited FB 111 452,546 - 6,675 56,670 - 389,201
Energia Limited FB 56 837,878 - 9,827 74,759 - 753,292
BB 56 59,751 - - 13,554 60 46,137
NNPC 18 (formerly Eroton) BL 18 3,286,744 1,481,543 722 1,599,400 - 205,079

35
Producers Crude Asset Number Metered Measurement Refund/ Theft/ Termnal Fiscalized
Type Production at Error Production Sabotage Adjustment Production
Flow Station Adjustment
bbls bbls bbls bbls bbls bbls
EXCEL E & P FB 46 631,949 12,638 - 74,458 - 544,853
Esso Exploration and Erha 133 21,972,422 - 6 - - 21,972,416
Production Nigeria
Limited_ERHA
Esso Exploration and Usan 138 16,437,652 - - - - 16,437,652
Production Nigeria
Limited_USAN
Frontier Oil Limited QIB 13 350,632 - - - - 350,632
First Exploration & Anya 83/85 15,416,627 - - - - 15,416,627
Petroleum Development
Company Limited
Green Energy Otaki 11 2,164,514 - 4,189 - - 2,160,325
Halkin Exploration and Ajapa 46 139,758 - - - - 139,758
Production Limited
Heirs Energy BL 17 4,300,295 741,907 189 1,910,478 - 1,647,721
Midwestern Oil and Gas FB 56 2,293,644 - 26,631 206,077 - 2,060,936
Limited BB 56 77,887 - - 17,794 78 60,015
Mobil Producing Nigeria Yoho 67/68/70/104 10,282,752 - 80 - - 10,282,672
Unlimited QIB 55,010,076 - - - - 55,010,076
Millenium Oil FB 11 10,556 - - 2,919 - 7,637
Monipulo Limited Antan 114 564,519 - - - - 564,519
Nigerian Agip Exploration Abo 125 4,977,042 - (7,787) - - 4,984,829
Nigerian Agip Oil Company BB 60/61/62/63 7,807,944 - (738,045) 2,332,327 357,759 5,855,903
Network E&P limited QIB 13 531,414 - - - - 531,414
Newcross E&P Limited BL 24 2,419,633 2,737 9,336 1,104,711 - 1,302,849

36
Producers Crude Asset Number Metered Measurement Refund/ Theft/ Termnal Fiscalized
Type Production at Error Production Sabotage Adjustment Production
Flow Station Adjustment
bbls bbls bbls bbls bbls bbls
NNPC E&P Limited BL 11 1,608,670 442,751 5,160 269,226 - 891,533
NEPL/NECONDE Pen 42 1,437,091 - (5,425) - - 1,442,516
NEPL/NECONDE Jones 42 6,248,089 - - - - 6,248,089
NNPC E&P Limited Okono 111/98/147 3,598,740 - (23,640) - - 3,622,380
NNPC E&P Limited BB 116 902,610 - - 290,639 1,352 610,619
NEPL /ELCREST FB 40 5,294,697 165,356 219 492,923 - 4,636,199
NEPL/NECONDE FB 42 480,569 9,514 4,803 30,192 - 436,060
NEPL /SHORELINE FB 30 10,789,373 136,778 1,446,696 962,721 - 8,243,178
NEPL /ND WESTERN FB 34 3,654,067 12,454 43,033 320,571 - 3,278,009
NEPL /FHN FB 26 1,338,742 21,147 14,754 120,515 - 1,182,326
NNPC E&P Limited FB 65 920,404 3,713 5,620 76,688 - 834,383
NNPC E&P Limited FB 98 446,359 105 6,121 55,129 - 385,004
NNPC E&P Limited FB 111 1,636,872 910 19,297 185,244 - 1,431,421
NNPC E&P Limited EL 98 115,024 - - 9,731 - 105,293
Oriental Energy Resources Ebok 67 3,610,959 - - - - 3,610,959
Ltd
Pan Ocean Oil Corporation FB 147 555,668 - - 65,306 - 490,362
EL 147 104,388 - - 423 - 103,965
Pillar Oil Limited FB 56 909,584 - 9,980 78,811 - 820,793
BB 56 89,530 - - 22,112 91 67,327
Platform Petroleum Limited FB 38 668,775 - 7,648 59,247 - 601,880
BB 38 79,014 - - 18,165 79 60,770
Sterling Oil Exploration and Okwui 143 17,357,545 - - - - 17,357,545
Energy Production Co. Ltd

37
 Producers Crude Asset Number Metered Measurement Refund/ Theft/ Termnal Fiscalized
Type Production at Error Production Sabotage Adjustment Production
Flow Station Adjustment
bbls bbls bbls bbls bbls bbls
Sterling Global Oil Resource Okwui 146 2,618,236 - - - - 2,618,236
Limited
Seplat Energy FB 4/38/41/49/53 9,616,120 185 118,164 1,079,781 - 8,417,990
EL 3,518,037 4 8,823 329,561 - 3,179,649
BL 1,502,521 6,510 2,393 443,144 - 1,050,474
Shell Nigeria Exploration Bonga 118 33,921,498 - - - - 33,921,498
Production Company
Shell Production FB 11/20/21/22/2 27,253,901 856,201 2,612,598 2,428,601 - 21,356,501
Development Company EA 3/27/28/32/35/ 8,737,001 - - - - 8,737,001
BL 43/45/46/55/7 11,204,470 5,926,923 1,189 3,261,023 - 2,015,335
9
BB 1,467,034 - - 1,472 353,572 1,111,990
Stardeep Water Limited Agbami 127/128 37,056,871 - - - - 37,056,871
TotalEnergies E&P Limited BL 58/99 1,791,229 30,434 1,839 993,716 - 765,240
Amenam 100/102 28,884,862 - - - - 28,884,862
TotalEnergies Upstream Egina 130 47,072,576 - - - - 47,072,576
Akpo 130 27,959,740 - - - - 27,959,740
Universal / Savannah Energy QIB 14 819,553 - - - - 819,553
Waltersmith Petroman Ltd BL 157 433,427 2,984 13,254 202,954 - 214,235
Yinka Folawiyo Aje 113 2,968 - - - - 2,968
Total 527,637,451 11,245,690 3,587,173 21,145,098 714,644 490,944,846
Source: NEITI 2022- 2023 OGA, 2024 (Companies' Hydrocarbon Flows Template and NUPRC Reconciled Sign-Off Document)

38
3.2.1.1. Federation Entitlement to JV Crude Oil Production
Federation entitlement to JV crude oil production in the year was distorted by the PIA
transitioning considering the subrogation of JV assets to NNPC Limited.

The JV production was 218.190 million barrels in 2022 compared to 225.23 million barrels in
2021. This was a decrease of 7.040 million barrels (3.13%). Table below shows the share of JV
production.

39
Table 27: Federation Entitlement to JV Production
Descriptions Total JV Production Federation Share Company Share
2022 2021 Change Equity Interest 2022 2021 Equity Interest 2022 2021
mbbls mbbls mbbls % % mbbls mbbls % mbbls mbbls
Aiteo 256 2,810 (2,554) -91% 55% 141 1,546 45% 115 1,265
Belema 165 916 (751) -82% 60% 99 549 40% 66 366
Chevron 52,529 60,668 (8,138) -13% 60% 31,518 36,401 40% 21,012 24,267
Eroton 205 1,557 (1,352) -87% 55% 113 856 45% 92 700
First E & P 15,417 10,785 4,631 43% 60% 9,250 6,471 40% 6,167 4,314
Heirs Holding 1,648 3,691 (2,043) -55% 55% 906 2,030 45% 741 1,661
Mobil 65,293 64,789 504 1% 60% 39,176 38,873 40% 26,117 25,916
NAOC 5,856 - 5,856 100% 60% 3,514 - 40% 2,342 -
Seplat 12,648 1,741 10,907 626% 60% 7,589 1,045 40% 5,059 696
SPDC 33,221 49,768 (16,548) -33% 55% 18,271 27,373 45% 14,949 22,396
TEPNG 29,650 28,505 1,145 4% 60% 17,790 17,103 40% 11,860 11,402
Newcross E & P 1,303 1,303 100% 55% 717 - 45% 586 -
Total 218,190 225,230 (7,040) -3% 129,083 132,247 89,108 92,983
Source: NEITI 2022- 2023 OGA, 2024 (Companies' Hydrocarbon Flows Template and NUPRC Reconciled Sign-Off Document)

40
3.2.1.2. Crude Oil Losses and Deferment
The crude oil losses were reviewed using various sources- NUPRC submission during the
NEITI OGA and the NUPRC signed-off reports with companies including the NNPC Limited.
Table below shows disparity in the crude oil losses in Nigeria.

Table 28: Disparity in Crude Oil Losses

Measurement Refund/ Theft/ Total

Description Error Production Sabotage
Adjustment
mmbbls mmbbls mmbbls mmbbls
NUPRC NEITI Submission - 11.79 20.87 32.67
NUPRC Signed-off Report 11.25 4.30 21.15 36.69
Source: NEITI 2022-2023 OGA, 2024

The 2022-2023 NEITI extractive reporting adopted the NUPRC signed-off report generated by
NUPRC, Companies and the NNPC Limited at curtailment meetings.

Crude oil loss was 36.693 million barrels which was 22.46% of the total metered production at
the flow station (163.384 million barrels) for the affected companies and crude type. The losses
result from 11.246 million barrels measurement error (6.9%), 21.145 million barrels theft and
sabotage (12.9%) and 4.302 million barrels production/ terminal adjustment (2.6%). Table
below shows the percentage of crude losses arising from measurement error and theft/sabotage
to metered production at flow station based on crude type and respective producers.

Table 29: Crude Losses to Metered Production at Flow Station Based on Crude Type and
Respective Producer
Producers Crude Metered Measurement Error Refund/ Theft/ Sabotage
Type Production Production/
at Flow Terminal
Station Adjustment
Bbls Bbls % Bbls % Bbls %
All Grace Ima 161,913 - 0% (2) 0% - 0%
Energy
Aradel BL 1,441,143 - 0% - 0% 464,445 32%
Holdings Plc
Aiteo Eastern BL 1,797,763 1,331,613 74% 1,588 0% 208,407 12%
E&P Co. Ltd
Antan BB 407,541 - - 612 0% 74,173 18%
Producing Ltd
Belema Oil BL 1,403,117 57,791 - 402 0% 1,180,105 84%
Company Ltd
Britannia U Ajapa 227,436 - - 1,038 0% - 0%
Chorus BB 3,390 - - 3 0% 716 21%
Energy Ltd FB 302,328 - - 3,481 1% 26,210 9%
Continental Pen 4,630,226 - - (22,644) 0% - 0%
Oil and Gas

41
 Producers Crude Metered Measurement Error Refund/ Theft/ Sabotage
Type Production Production/
at Flow Terminal
Station Adjustment
Bbls Bbls % Bbls % Bbls %
Dubri Oil Ltd EL 75,045 1,492 - - 0% - 0%
Enageed FB 452,546 - - 6,675 1% 56,670 13%
Resource Ltd
Energia FB 837,878 - - 9,827 1% 74,759 9%
Limited BB 59,751 - - 60 0% 13,554 23%
NNPC 18 BL 3,286,744 1,481,543 - 722 0% 1,599,400 49%
(Formerly
Eroton)
Excel E & P FB 631,949 12,638 - - 0% 74,458 12%
Esso E&P Erha 21,972,422 - - 6 0% - 0%
Nig. Ltd_
ERHA
Green Energy Otaki 2,164,514 - - 4,189 0% - 0%
Heirs Energy BL 4,300,295 741,907 - 189 0% 1,910,478 44%
Midwestern FB 2,293,644 - - 26,631 1% 206,077 9%
Oil and Gas BB 77,887 - - 78 0% 17,794 23%
Limited
Mobil Yoho 10,282,752 - - 80 0% - 0%
Producing
Nigeria Unltd
Millennium FB 10,556 - - - 0% 2,919 28%
Oil
Nigerian Agip Abo 4,977,042 - - (7,787) 0% - 0%
Exploration
Nigerian Agip BB 7,807,944 - - (380,286) -5% 2,332,327 30%
Oil Company
Newcross BL 2,419,633 2,737 - 9,336 0% 1,104,711 46%
E&P Limited
NEPL BL 1,608,670 442,751 - 5,160 0% 269,226 17%
NEPL/ Pen 1,437,091 - (5,425) 0% - 0%
Neconde
NNPC E&P Okono 3,598,740 - (23,640) -1% - 0%
Limited BB 902,610 - 1,352 0% 290,639 32%
NEPL /Elcrest FB 5,294,697 165,356 219 0% 492,923 9%
NEPL/ FB 480,569 9,514 4,803 1% 30,192 6%
Neconde
NEPL/ FB 10,789,373 136,778 1,446,696 13 962,721 9%
Shoreline %
NEPL / FB 3,654,067 12,454 43,033 1% 320,571 9%
ND Western
Nepl /FHN FB 1,338,742 21,147 2% 14,754 1% 120,515 9%
NNPC E&P FB 2,860,630 4,728 0% 31,038 1% 302,023 11%
Limited EL 258,029 - 0% - 0% 24,769 10%
Pan Ocean Oil FB 555,668 - 0% - 0% 65,306 12%
Corporation EL 104,388 - 0% - 0% 423 0%
Pillar Oil FB 851,164 - 0% 9,980 1% 78,811 9%
Limited BB 89,530 - 0% 91 0% 22,112 25%

42
 Producers Crude Metered Measurement Error Refund/ Theft/ Sabotage
Type Production Production/
at Flow Terminal
Station Adjustment
Bbls Bbls % Bbls % Bbls %
Platform FB 668,775 - 0% 7,648 1% 59,247 9%
Petroleum Ltd BB 79,014 - 0% 79 0% 18,165 23%
Seplat Energy FB 9,616,120 185 0% 118,164 1% 1,079,781 11%
EL 3,518,037 4 0% 8,823 0% 329,561 9%
BL 1,502,521 6,510 0% 2,393 0% 443,144 29%
Shell FB 27,253,901 856,201 3% 2,612,598 10 2,428,601 9%
Production %
Development BL 11,204,470 5,926,923 53% 1,189 0% 3,261,023 29%
Company BB 1,467,034 - 0% 353,572 24 1,472 0%
%
Totalenergies BL 1,791,229 30,434 2% 1,839 0% 993,716 55%
E&P Limited
Waltersmith BL 433,427 2,984 1% 13,254 3% 202,954 47%
Petroman Ltf
Total 163,383,955 11,245,690 7% 4,301,817 3% 21,145,098 13%
Source: NEITI 2022- 2023 OGA, 2024 (Companies' Hydrocarbon Flows Template and
NUPRC Reconciled Sign-Off Document)

Crude oil losses were 36.69 million barrels in 2022, compared to 37.57 million barrels in 2021.
This dropped by 2% (0.88 million barrels). This means that government efforts on curbing
crude losses is yielding some positive results. However, there is need for more intensity to drive
efficiency in the sector.

A ten (10) year trend (2013 - 2022) of crude losses in Nigeria shows that the highest loss of
101 million barrels was in 2016 and the lowest of 1 million barrels was in 2014. The figure
below shows the ten (10) years trend of crude oil losses.

Figure 4: Ten-Year Trend of Crude Oil Losses in Nigeria Million Barrels

2022 Losses (mmbls)

120.00
100.00
80.00
60.00
40.00
20.00
-
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Losses (mmbls) 2.40 1.00 27.12 101.0 36.46 53.28 42.25 39.08 37.57 36.69
Source: 2013 – 2021 NEITI OGA Reports; 2022-2023 NEITI OGA, 2024

43
Production deferments were reviewed using various sources- NUPRC submission and the
Companies submission. Table below shows disparity in the crude oil production deferments in
Nigeria.

Table 30: Disparity in Crude Oil Production Deferment

Description Schedule Unscheduled Total

mmbbls mmbbls mmbbls
NUPRC NEITI Submission 110.25 - 110.25
Companies NEITI Submission 102.23 51.21 153.44
Source: NEITI 2022- 2023 OGA, 2024 (Crude Oil Production Deferment Templates)

Based on companies’ submission, the total crude oil production deferment was 153.44 million
barrels, comprising 102.23 million barrels (66.63%) scheduled, and 51.21 million barrels
(33.37%) unscheduled based on companies’ submission to the 2022-2023 NEITI extractive
reporting. Table below shows the total crude oil production deferment.

Table 31: Crude Oil Production Deferment (Scheduled and Unscheduled)

Producers Scheduled Unscheduled Total

Deferred Defered
Barrels Barrels Barrels
ALL GRACE 1,821 28,130 29,951
AITEO 19,746,852 - 19,746,852
ADDAX_ANTAN 3,690,236 - 3,690,236
CHEVRON 5,408,101 - 5,408,101
FIRST E&P 590,808 - 590,808
HEIRS 87,624 - 87,624
MONIPULO 539,492 - 539,492
NAOC 12,169,674 - 12,169,674
NEWCROSS E & P 10,093,631 - 10,093,631
NEPL 119 - 2,132,682 2,132,682
NEPL 49/51 - 231,519 231,519
NEPL SEPLAT JV 931,211 4,526,939 5,458,151
NEPL 42 - 4,728,401 4,728,401
NEPL- (OML 38/49) - 773,600 773,600
NEPL 65 - 3,321,110 3,321,110
NEPL 98 - 201,700 201,700
NEPL 34 - 2,902,638 2,902,638
NEPL 26 - 704,643 704,643
NEPL 111 - 7,723,815 7,723,815
ORIENTAL ENERGY 192,831 55,583 248,414
PILLAR 45,560 763,738 809,298
PLATFORM - 851,134 851,134
SEEPCO 6,233,828 - 6,233,828
SEPLAT 6,233,828 - 6,233,828

44
 Producers Scheduled Unscheduled Total
Deferred Defered
Barrels Barrels Barrels
SNEPCO 9,828,029 - 9,828,029
SPDC 17,788,519 21,343,803 39,132,323
TEPNG 5,149,852 920,300 6,070,152
TUPNI 3,501,102 - 3,501,102
TOTAL 102,232,999 51,209,736 153,442,735
Source: NEITI 2022- 2023 OGA, 2024 (Companies' Hydrocarbon Flows Templates)

Deferred Crude oil production was 153.44 million barrels in 2022, compared to 70.09 million
barrels in 2021. This increased by 119% (83.35 million barrels). This implies significant delay
in production due to avoidable interruption, repairs and maintenance. The Figure below shows
the five-year trend of deferred production.

Figure 5: Five-Year Trend of Deferred Crude Oil Production (Million Barrels)

Deferred Production (mmbls)

180.00
160.00
140.00
120.00
100.00
80.00
60.00
40.00
20.00
-
2018 2019 2020 2021 2022
Deferred Production
78.52 55.21 72.70 70.09 153.44
(mmbls)
Source: 2013 – 2021 NEITI OGA Reports; 2022-2023 NEITI OGA, 2024

45
3.2.2. Gas Production
Total gas production was 2.521 trillion SCF in 2022, comparing 2.744 trillion SCF in 2021.
Gas production dropped by 222.417 billion SCF (8%) from 2021 to 2022.

A five (5) year trend (2018 - 2022) of gas production in Nigeria shows that the highest
production volumes of 3.048 trillion SCF was in 2019 and the lowest of 2.521 trillion SCF was
in 2022. This implied that the country’s production capacity in 2022 was at 82.73% efficiency
based on the 2019 gas production volume.

The 17.27% inefficiency indicates lower operating capacities of the production platforms,
possible gas loss from unmetered Wellheads, increase in un-producing oil Wells due to
abandonment, amongst other possible reasons.

The figure below shows the five (5) years trend of gas production.

Figure 6: Gas Production - Million SCF (MMSCF)

2,500,000

2,000,000

1,500,000

1,000,000

500,000

-
JV PSC SR MF SC
2018 2,167,239 599,472 78,009 62,962 1,462
2019 2,133,074 624,931 211,010 76,999 1,494
2020 2,060,150 564,627 315,848 73,014 -
2021 1,490,097 609,589 561,289 82,725 -
2022 1,609,413 631,691 194,256 85,922 -
Source: 2013 – 2021 NEITI OGA Reports; 2022-2023 NEITI OGA, 2024

Metered gas production dropped by 8.1% from 2.744 trillion SCF in 2021 to 2.521 trillion SCF
in 2022.

Total metered gas production at flow stations in 2022 amounted to 2.521 trillion Standard Cubic
Feet (SCF). Of this, 137.361 billion SCF (5.4%) was used as fuel, 129.696 billion SCF (5.1%)
for gas lift, 487.735 billion SCF (19.3%) for gas re-injection, 1.569 trillion SCF as sales, 9.428
billion SCF (0.4%) as shrinkage and 188.483 million SCF (7.5%) as gas flare. The detailed
breakdown is presented in the table below.

46
Table 32: Gas Production by Companies on Asset Basis
PRODUCERS Assets Metered Fuel Gas Gas Lift Gas Re- Sales Gas Shrinkage Gas
Production (Mmscf) (Mmscf) Injection (Mmscf) (Mmscf) Flared
(Mmscf) (Mmscf) (Mmscf)
Antan Producing Limited 123 15,132 797 3,870 - - - 10,465
124 2,157 76 1,189 98 - - 794
126 2,145 311 517 130 - - 1,187
Aiteo Eastern E&P Company Ltd 29 2,023 15 - - 1,733 - 275
All Grace Energy 17 280 - - - - - 280
Amni International Petroleum Development 112 1,968 95 - 1,390 - - 483
Belema Oil Company Limited 55 2,369 126 - - - - 2,243
Britania-U 90 217 181 - - - - 35
Chevron Nigeria Limited 49 63,151 3,768 13,074 - - - 3,777
51 - - - - - - -
86 1,359 69 28 - - - 1,261
88 - - - - - - -
90 113,048 3,034 1,364 - - - 2,732
91 72,878 65 - - - - 0
95 37,457 3,383 21,869 - - - 236
EGP - 11,564 - - 125,657 - 1,652
EGTL - - - - 94,121 - 237
Chorus Energy Limited 56 2,211 40 - - - - 2,170
Consolidated Oil and Gas Company Limited 103 135 91 - - - - 44
Continental Oil and Gas 59 5,767 353 - - - - 5,413
Dubri Oil Limited 96 1,233 15 - - - - 1,218
Enageed Resource Ltd 111 584 97 - - - - 487
Energia Limited 56 6,317 74 - - 1,645 - 4,598

47
 PRODUCERS Assets Metered Fuel Gas Gas Lift Gas Re- Sales Gas Shrinkage Gas
Production (Mmscf) (Mmscf) Injection (Mmscf) (Mmscf) Flared
(Mmscf) (Mmscf) (Mmscf)
EROTON 18 14,782 442 - - 11,705 - 2,635
Esso Exploration and Prod. Nig Ltd Erha 133 72,166 5,993 4,953 48,879 5,740 - 6,600
Esso Exploration and Prod. Nig Ltd Usan 138 60,634 4,425 21,875 27,038 3,226 - 4,070
Excel E&P Limited 46 32 16 - - - - 16
First Exploration & Petroleum Dev Co. Ltd 83&85 9,455 552 - - - - 8,903
Frontier Oil Limited 13 53,000 403 - - 52,141 - 457
Green Energy 11 1,918 - - - - - 1,918
Heirs Energy 17 13,773 514 - - 11,920 - 1,339
Millenium Oil and Gas 56 1,129 513 - - - - 616
11 - - - - - - -
Mobil Producing Nigeria Unlimited 67 131,135 1,281 8,609 99,312 - - 4,675
68 14,094 32 2,679 8,304 - - 67
70 84,485 10,071 14,750 7,215 7,166 - 5,887
104 53,057 2,414 - 46,309 - - 4,335
QIT 5,025 1,314 - - - - 3,712
BRT - 1,138 - - 38,645 - 424
EAP - 8,514 - - 7,247 - 3,698
Monipulo Limited 114 158 5 - - - - 153
Nigeria Agip Energy 125 15,673 1,540 - 11,301 - - 2,833
Network E&P Limited 13 781 22 - - - - 759
New Cross E&P 24 1,978 71 - - 1,116 - 791
Newcross Petroleum Limited 152 3,302 125 - - 3,177 - -
Aradel Holding PLc 54 6,506 387 - - 6,042 - 77
Nigerian Agip Oil Company 60 14,702 3,477 - - 18,343 1,390 3,440
61 150,989 13,956 - 574 147,237 5,109 7,155
63 41,590 2,987 - - 37 - 3,577

48
 PRODUCERS Assets Metered Fuel Gas Gas Lift Gas Re- Sales Gas Shrinkage Gas
Production (Mmscf) (Mmscf) Injection (Mmscf) (Mmscf) Flared
(Mmscf) (Mmscf) (Mmscf)
NEPL- FHN 26 3,722 113 724 - - - 2,885
NEPL- SHORELINE 30 12,309 2,721 6,546 - - - 3,041
NEPL- ND WESTERN 34 118,655 201 - - 116,511 - 1,943
NEPL- ELCREST 40 2,232 16 - - - - 2,216
NEPL- NECONDE 42 8,784 331 - - 710 - 7,744
NNPC E&P Limited (Oghareki) 49 93 9 - - - - 84
NNPC E&P Limited 65 413 - - - - - 413
98 4,009 - - - 3,968 - 41
111 26,610 1,863 - - 20,224 - 4,523
116 2,702 110 - - - - 2,592
119 5,601 739 - - - - 4,862
Oriental Energy Resource Limited 67 5,101 918 3,309 - - - 875
Pan Ocean Oil Corp 147 10,195 657 - - 8,744 - 794
Pillar Oil Limited 56 450 67 - - - - 382
Platform Petroleum Ltd 38 7,130 133 - - 6,122 - 875
Sterling Oil Exploration and Energy 143 48,711 1,276 432 - 46,996 - 7
Production Company Limited
Seplat Energy 4 78,428 447 - - 76,180 - 1,801
38 16,541 287 - - 14,972 - 1,282
41 2,525 53 - - - - 2,472
Seplat Energy (Oghareki) 49 1,322 25 - - - - 1,296
Seplat Energy 53 892 0 - - - - 892
Sterling Global Oil Resource Limited 146 129 98 28 - - - 3
11 25,278 417 - - 24,217 - 644
20 280 14 - - - - 266
Shell Petroleum Development Company 21 8 0 - - - - 8

49
 PRODUCERS Assets Metered Fuel Gas Gas Lift Gas Re- Sales Gas Shrinkage Gas
Production (Mmscf) (Mmscf) Injection (Mmscf) (Mmscf) Flared
(Mmscf) (Mmscf) (Mmscf)
22 67 2 - - - - 65
23 43,566 356 - - 42,220 - 989
27 48 2 - - 25 - 21
28 317,290 3,257 - - 311,225 - 2,808
32 405 4 - - - - 401
35 1,591 71 - - 1,027 - 493
43 3,814 259 2,121 - 950 - 484
45 9,629 1,270 432 - 3,733 - 4,194
46 21,563 354 - - 18,809 - 2,400
79 15,316 2,915 6,002 - 4,469 - 1,931
Shell Nigeria Exploration & Production Co 118 39,963 3,329 15,137 - 17,153 - 4,343
Stardeep Water Petroleum Limited 127 153,060 7,814 - 135,647 - - 9,599
Total Energies E&P Nigeria Limited 58 87,620 1,704 - - 84,733 - 1,182
99 124,738 5,040 - 32,018 84,601 - 1,220
100 4,478 1,463 - - - - 4,874
102 26,666 3,267 - - 19,992 2,930 477
Total Energies Upstream Nigeria Limited 130 207,704 11,407 - 69,519 124,074 - 2,704
Universal Energy Resource Ltd/ Savannah 14 662 5 - - 28 - 629
Waltersmith Petroman Ltd 157 187 0 187 - - - 0
Grand Total 2,521,283 137,361 129,696 487,735 1,568,580 9,428 188,483
Source: NEITI 2022- 2023 OGA, 2024 (Companies' Gas Production and Utilisation Templates and NURPC Gas Production Templates)

50
3.2.2.1. Gas Flare, Un-Accounted, Shrinkage and Lift Gas
Gas Flare
In 2022, total gas flaring amounted to 188.483 billion Standard Cubic Feet (SCF), a decrease
from 249.934 billion SCF in 2021. This reduction of 61.451 billion SCF (24.6%) is a positive
development, reflecting significant government efforts aimed at reducing gas flaring. A ten-
year trend indicates that the peak gas flare occurred in 2013, reaching 373 billion SCF, while
2022 recorded the lowest level of flaring at 208 billion SCF, as illustrated in the figure below.

Figure 7: Ten (10) Year Trend of Flare Gas (Billion SCF)

Flare Gas (Billion SCF)

400

350

300

250

200

150

100

50

-
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Flare Gas (Billion SCF) 373 282 318 288 355 267 265 230 250 188

Source: 2013- 2021 NEITI OGA Reports, and NEITI 2022- 2023 OGA, 2024 (Companies' Gas Production and Utilisation Templates and
NURPC Gas Production Templates)

Shrinkage and Lift Gas

Conversely, shrinkage, and lift gas volumes surged in 2022, reaching 139.123 billion SCF, up
from 43.968 billion SCF in 2021—an increase of 95.156 billion SCF (216.4%). This significant
rise undermines the positive effects of government initiatives aimed at reducing gas flaring, as
the shrinkage/lift gas could have been flared instead. This troubling increase highlights the need
for further scrutiny and enhanced measures to effectively manage gas production and minimize
losses in the sector.

A ten-year trend indicates that the peak of shrinkage/ lift gas occurred in 2013, with a total of
669 billion SCF, as illustrated in the figure below.

51
Figure 8: Ten (10) Year Trend of Un-Accounted, Shrinkage and Lift Gas (Billion SCF)

Un-Accounted/ Shrink/Lift Gas (Billion SCF)

800
600
400
200
-
(200)
(400)
(600)
(800)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Un-Accounted/ Shrink/Lift Gas
669 (677) 306 421 567 (314) 235 115 44 139
(Billion SCF)
Source: 2014- 2022 NEITI OGA Reports, and NEITI 2022- 2023 OGA, 2024 (Companies' Gas Production and Utilisation Templates and
NURPC Gas Production Templates)

3.3. Crude Lifting and Sales

This section discusses government crude oil lifting from total production, the sales and
proceeds management.

3.3.1. Crude Oil Lifting

Total crude lifting was 482.074 million barrels in 2022, comparing 551.006 million barrels in
2021. The 68.932 million barrels (12.51%) decrease in total crude lifting can be attributed to
the reduction in fiscalised crude production. This decline in production is primarily a result of
increased crude production deferment throughout the year. The table below illustrates the total
crude lifting for the period under review, highlighting the impacts of deferment on overall
production levels.

Table 33: Total Crude Lifting

Description # 2022 2021 Changes

mbbls mbbls mbbls %

Opening Stock 27,712 12,588 15,124 120%

Total Fiscalised Production 490,945 566,130 (75,185) -13%
for the year

Total Stock available for A 518,656.95 578,718 (60,061) -10%

Lifting

52
Description # 2022 2021 Changes
mbbls mbbls mbbls %

NNPC Lifting
Export Lifting:
Joint Venture 8,140 30,113 (21,973) -73%
Production Sharing Contract 51,278 (51,278) -100%
Marginal Fields 207 (207) -100%
Service Contract 1,548 (1,548) -100%

Subtotal- Export B 8,140 83,146 (75,006) -90%

Domestic Lifting (Refinery &

DSDP)
Joint Venture 106,096 98,768 7,328 7%
Production Sharing Contract 61,505 - 61,505 100%
Marginal Field 270 180 90 50%

Subtotal- Domestic C 167,872 98,948 68,924 70%

Total NNPCL Lifting D= 176,012 182,094 (6,082) -3%

B+C

Company Lifting
Joint Venture 97,260 88,240 9,020 10%
Production Sharing Contract 147,027 191,593 (44,566) -23%
Sole Risk 47,147 71,427 (24,280) -34%
Marginal Fields 14,628 17,652 (3,023) -17%

Total Company Lifting E 306,063 368,912 (62,850) -17%

Total Crude Oil Lifting F= D 482,074 551,006 (68,932) -13%

+E

Closing Stock G= A- 36,583 27,712 8,871 32%

F
Source: 2021 NEITI OGA Reports; 2022-2023 NEITI OGA, 2024 (NUPRC Lifting Record,
NNPC Lifting and Sales Record)

53
Figure below shows the five (5) year trend of crude oil lifting.

Figure 9: Five-Year Trend of Crude Oil Lifting - mbbls- 2018-2022

500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
-
2018 2019 2020 2021 2022
NNPC Ltd 255,546 266,650 225,336 182,094 176,070
Companies 445,544 469,010 423,148 368,912 306,004
Source: 2018- 2021 NEITI OGA Reports; 2022-2023 NEITI OGA, 2024 (NUPRC Lifting
Record, NNPC Lifting and Sales Record)

3.3.2. Sales of Crude Oil

Sales of crude oil are the transactions carried out by the NNPC Limited for and on behalf of
the Federation and other Revenue generating agencies in the sector.

3.3.2.1. Tendering for Crude Oil Sales

Tendering activities for crude oil sales are carried out by the NNPC Limited. The table below
shows the DSDP and Export sales tendering activities.

Table 34: Export and DSDP Sales Tendering in 2022

Summary of Bidding data DSDP

Date of Advertisement 7-Dec-2020
Number of Applicants 213
Number of Successful bidders 17
Date of Bid Opening 21-Jan-2021
Date of Bid Evaluation 22-Jan-2021
Start Date of Signing Contract 1-Jul-2021
End Date of Signing Contract 31-Jul-2021
Source: NEITI 2022-2023 OGA, 2024

The table below outlines the key contract terms for the successful bidders under the Direct Sale
of Crude Oil and Direct Purchase of Petroleum Products (DSDP) arrangement, based on the
outcomes of the tendering process.

54
Table 35: Successful bidders for Direct Sales Direct Purchases (DSDP) in 2022

# Names Successful Bidders Volumes Term Contract Duration

Allocated Effective Expiry Years
(Bpd) Date Date
1 DUKE OIL INCORPORATED 12,087,627 1-Aug-21 30-Apr-23 3
2 BP/AYM SHAFA 14,611,604 1-Aug-21 30-Apr-23 3
3 TOTSA/TOTAL 4,411,385 1-Aug-21 30-Apr-23 3
4 VITOL/ASHGROVE/JAK ENERGY 9,968,968 1-Aug-21 30-Apr-23 3
SOLUTIONS
5 BONO ENERGY/CENTURY 13,739,535 1-Aug-21 30-Apr-23 3
ENERGY/ AMAZON/CORDERO
6 MATRIX ENERGY/PETRA 10,483,180 1-Aug-21 30-Apr-23 3
ATLANTIC/UTM OFFSHORE
LTD./PRUDENT
7 SAHARA ENERGY RESOURCES 6,344,294 1-Aug-21 30-Apr-23 3
8 ASIAN OIL & GAS/ MASTERS 10,189,676 1-Aug-21 30-Apr-23 3
ENERGY/CASIVA LTD./ CIMARON
9 EYRIE ENERGY/ 12,095,265 1-Aug-21 30-Apr-23 3
LEVENE/BOVAS/DK GLOBAL
10 MOCOH SA/MOCOH NIG. LTD./ 11,319,707 1-Aug-21 30-Apr-23 3
PENERO ENERGY LTD/
MAINLAND OIL & GAS
11 MRS OIL & GAS 10,437,592 1-Aug-21 30-Apr-23 3
12 OANDO PLC. 6,144,147 1-Aug-21 30-Apr-23 3
13 TRAFIGURA/AA RANO/EAST 949,349 1-Aug-21 30-Apr-23 3
CROSS
14 MERCURIA/ BARBEDOS/RAINOIL 4,094,884 1-Aug-21 30-Apr-23 3
LTD./ PETROGAS ENERGY
15 EMADEB/AY 5,742,574 1-Aug-21 30-Apr-23 3
MAIKIFI/HYDE/BRITANNIA-U
16 LITASCO/PV OIL/OVERBROOKE 4,569,289 1-Aug-21 30-Apr-23 3
RESOURCES/NORTHWEST
PETROLEUM
17 COOLSPRING/AIDA ENERGY 9,188,737 1-Aug-21 30-Apr-23 3
LTD/HEYDEN
Source: NEITI 2022-2023 OGA, 2024

55
3.3.2.2. NNPC Limited Pricing of Crude Oil
The crude oil sold by NNPC Limited is jointly owned by stakeholders, including the
Federation, NNPC Limited, FIRS, and NUPRC. The sales process follows a competitive
bidding procedure, where selected buyers acquire the crude. The selling price is determined by
the buyer's selected pricing option—prompt, deferred, or advance. This pricing is calculated
using the Official Selling Price (OSP) and an average of the five (5) days' dated Brent crude
oil quotations around the Bill of Lading (B/L) date, ensuring alignment with prevailing market
dynamics.

The derived annual average selling price of crude oil by NNPC Ltd in 2022 was US$ 103.63/
barrel. The monthly average selling price was highest at US$ 119.71/ barrel in May and lowest
at US$81.77/ barrel in December as shown in the Figure below.

Figure 10: 2022 NNPC Limited Monthly Trend of Crude Oil Selling Prices

140.00

120.00

100.00

80.00

60.00

40.00

20.00

-
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2022 93.16 111.9 113.6 109.1 119.7 119.2 113.4 102.1 97.89 98.81 92.08 81.77

Source: NEITI 2022-2023 OGA, 2024 (NNPC Limited Lifting and Sales Records)

A global comparison of NNPC Limited monthly average crude oil selling prices in 2022 shows
that the crude prices are higher than other international institutional pricing frameworks for all
the months except for March and June. For the months of March and June 2022, NNPC Limited
pricing was still higher than the West Texas Intermediate (WTI) - Cushing, Oklahoma Spot
Prices as shown in the Figure below. This suggests that NNPC Limited's pricing methodology
aligns with global benchmarks, indicating that its performance is on par with international
standards. This outcome lends credence to the efficacy and efficiency of NNPCL's efforts in
domestic resource mobilization, further supporting the organization's contribution to
optimizing national revenue from crude oil sales.

56
Figure 11: Monthly Global Comparison of NNPC Ltd Crude Oil Selling Prices (US$/ Bbl)

140.0

120.0

100.0

80.0

60.0

40.0

20.0

-
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
NNPCL US$ 93.2 112.0 113.6 109.1 119.7 119.3 113.5 102.2 97.9 98.8 92.1 81.8
OK-WTI US$ 83.2 91.6 108.5 101.8 109.6 114.8 101.6 93.7 84.3 87.6 84.4 76.4
Europe Brent US$ 86.5 97.1 117.3 104.6 113.3 122.7 111.9 100.5 89.8 93.3 91.4 80.9
OPEC US$ 85.2 94.0 113.5 105.6 113.9 117.7 108.5 101.9 95.3 93.6 89.7 79.7

Source: NEITI 2022-2023 OGA, 2024 (NNPC Limited Lifting and Sales Records, WTI +
Europe Brent2, OPEC Basket Price3)

NB:
- NNPCL: NNPC Limited Official Selling Price +/- Crude Type Differentials (US$/Barrel)
- OK-WTI: West Texas Intermediate (WTI) - Cushing, Oklahoma Spot Price FOB (US$/Barrel)
- Europe Brent: Europe Brent Spot Price FOB (US$/Barrel)
- OPEC: OPEC Crude Oil Prices (US$/Barrel)

3.3.2.3. Crude Oil Sales and Proceeds

A total crude oil sold by NNPC Limited was US$18.106 billion in 2022, comparing US$15.192
billion in 2021. The US$2.914 billion is the impact of the increase in lifting because of
increased fiscalised production as well as increase in the annual average crude price. The table
below shows the value of the total crude sales.

2
WTI _ Europe Brent: US Energy Information Administration:
https://www.eia.gov/dnav/pet/pet_pri_spt_s1_m.htm
3
OPEC Basket Price for Crude Oil: https://www.opec.org/basket/basketDayArchives.xml

57
Table 36: Crude Oil- Total Sales Value
Beneficiary 2022 2021 Changes
US$'000 US$'000 US$'000 %

Federation 11,198,692 11,308,166 (109,474) -1%

NNPC Limited 1,401,760 - 1,401,760 100%
NUPRC 2,480,271 2,224,989 255,282 11%
FIRS 3,025,287 1,659,028 1,366,259 82%

Total 18,106,011 15,192,183 2,913,828 19%

Source: NEITI 2022-2023 OGA, 2024

A total of 176.012 million barrels of crude oil was sold by NNPC Ltd for itself (considering
the PIA implementation), the Federation, NUPRC and the FIRS. Table below shows the
quantity of crude oil sold.

Table 37: Crude Oil- Total Sales Quantity

Beneficiary 2022
Quantity
mbbls

Federation 109,313
NNPC Limited 13,432
NUPRC 23,472
FIRS 29,795

Total 176,012
Source: NEITI 2022-2023 OGA, 2024

3.3.2.4. Federation Export and Domestic Sales of Crude Oil

A total of US$11.199 billion was aggregated in 2022 as proceeds due to the Federation,
comparing US$11.308 billion in 2021. Though this dropped marginally by US$109.474 million
(1%) despite the impact of the subrogation of JV assets to the NNPC Limited in July 2022 due
to PIA, 2021 implementation. The effect of increase of annual average crude prices eroded the
negative impact on the revenue to the Federation. Table below shows the sales of Federation
crude oil.

Table 38: Sales of Federation Crude Oil

Description 2022 2021 Changes
US$'000 US$'000 US$'000 %
Proceeds from the Sales of 168,379 5,365,982 (5,197,603) -97%
Federation JV Crude Oil- Export

58
 Description 2022 2021 Changes
US$'000 US$'000 US$'000 %
Proceeds from the Sales of 10,133,003 5,851,714 4,281,289 73%
Federation JV Crude Oil- Domestic
Proceeds from the Sales of Profit 97,027 90,470 6,557 7%
Oil (PSC, SC & MF)- Export
Proceeds from the Sales of Profit 800,284 - 800,284 100%
Oil (PSC, SC & MF)- Domestic
Total 11,198,692 11,308,166 (109,474) -1%
Source: NEITI 2022-2023 OGA, 2024

Federation crude oil sales quantities was 109.313 million barrels in 2022. Table below shows
the total Federation Export and Domestic crude sales quantity and value.

Table 39: 2022 Federation Export and Domestics Crude Sales Quantity and Value

QTY Value
Description
mbbls US$'000
Export 1,963 189,282
DSDP 104,646 10,757,436
DSA 1,749 175,851
Project Yield 955 76,124
Total 109,313 11,198,692
Source: NEITI 2022-2023 OGA, 2024

3.3.2.5. Non-Financial Flows

Non-financial flows are in-kind lifting from Modified Carried Agreement (MCA), PSC and SC
as discussed in the subsequent subsections.

3.3.2.5.1. NNPC In-Kind Lifting from MCA, PSC and SC

A total of US$5.506 billion was the sales proceeds from In-kind payment on crude oil, gas and
feedstock for NUPRC and FIRS in 2022, comparing US$3.895 billion in 2022. The increase
of US$1.610 billion (41%) means that there was an increase in the use of crude oil and gas to
pay for royalty, concession rent and tax in 2022.

Table below shows the disaggregated in-kind payment on crude oil and gas.

Table 40: In-Kind Payment on Crude Oil, Gas and Feedstock

Beneficiary 2022 2021 Changes

US$'000 US$'000 US$'000 %
NUPRC
Concession Rent 3,463 2,224,989 (2,221,526) -100%
Royalty Oil 2,476,808 - 2,476,808 100%

59
 Beneficiary 2022 2021 Changes
US$'000 US$'000 US$'000 %
Royalty Gas - 2,255 (2,255) -100%
Subtotal 2,480,271 2,227,244 253,027 11%

FIRS
Tax Oil 3,025,287 1,659,028 1,366,259 82%
Tax Gas - 8,989 (8,989) -100%
Subtotal 3,025,287 1,668,017 1,357,270 81%

Total 5,505,558 3,895,261 1,610,297 41%

Source: NEITI 2022-2023 OGA, 2024

3.3.2.5.2. Cash Call Liability and Related Statutory Payments

A total of US$1.301 billion in cash liabilities was reported for 2022. However, a more thorough
review is required, as NNPC Limited was unable to provide the necessary information within
the reporting period.

Furthermore, NNPC Limited claimed that there were no liabilities due to the NUPRC in 2022;
however, NUPRC was unable to verify this position. Additionally, US$587.120 million in
taxes, arising from Company Income Tax, was reported as due to the Federal Inland Revenue
Service (FIRS). NNPC Limited indicated that it had applied to use the Tax Waivers Scheme to
offset these taxes, but FIRS has yet to confirm this claim as of the time of publishing this report.

3.4. Gas Utilisation and Sales

The gas produced was utilized in various ways, including fuelling production operations and
reinjecting it into the production facilities flaring.

60
3.4.1. Gas Utilisation
A total of 137.361 billion SCF of gas was used as fuel in 2022, comparing 340.382 billion SCF
in 2021. Also, Gas sold was 1.569 trillion SCF in 2022, comparing 1.534 trillion SCF in 2021.
The Figure below shows a five-year trend of the full utilisation of produced gas.

Figure 12: Five-Year Trend of Gas Utilisation- Million SCF

2022 Gas Utilisation - Million Scf (mmscf)

2,500,000

2,000,000

1,500,000

1,000,000

500,000

(500,000)
Un-accounted/
Fuel Re-injected Flare Shrinkage/ Sales
Lift
2018 188,267 795,095 266,869 (313,689) 1,972,601
2019 165,502 809,157 264,733 234,870 1,573,246
2020 158,165 593,376 230,488 114,868 1,916,742
2021 340,382 575,382 249,934 43,968 1,534,034
2022 137,361 487,735 188,483 139,124 1,568,580
Source: 2018- 2021 NEITI OGA Reports, and NEITI 2022- 2023 OGA, 2024 (NURPC Gas
Production and Utilisation Templates)

61
3.4.2. Federation Entitlement from Gas Sales
A total of 1.152 trillion SCF was the gas sales in 2022 from JV production arrangement,
comprising of 669.590 billion SCF (58.12%) to Federation and 482.489 billion SCF (41.88%)
to JV partners as shown in the table below.

Table 41: Federation Entitlement from Gas Sales

Company Total JV Interest Interest
NNPC JV NNPC JV
Partners Partners
mmscf % % mmscf mmscf
SPDC 406,674 55% 45% 223,671 183,003
AITEO 1,733 55% 45% 953 780
EROTON (NNPC 18 Ltd) 11,705 55% 45% 6,438 5,267
NEWCROSS E&P 1,116 55% 45% 614 502
CHEVRON (CNL) 219,778 60% 40% 131,867 87,911
NAOC 165,617 60% 40% 99,370 66,247
MPNU 53,058 60% 40% 31,835 21,223
TEPNG 189,326 60% 40% 113,596 75,731
BELEMA OIL - 60% 40% - -
SEPLAT 91,151 60% 40% 54,691 36,461
FIRST E&P - 60% 40% - -
HEIRS 11,920 55% 45% 6,556 5,364
Total 1,152,078 669,590 482,489
Source: NEITI 2022- 2023 OGA, 2024 (NURPC Gas Production Templates)

3.4.3. Federation Gas and Feedstock Sales

Federation gas entitlement from JV production arrangement is 669.590 billion SCF of natural
gas liquids (≈ 10.611 million metric tons) per NUPRC record. However, NNPC Limited only
accounted for 1.548 million metric tons natural gas (≈ 9.764 billion standard cubic feet) as
shown in the table below.

Table 42: NNPC Ltd and NUPRC Gas Sales

Description NUPRC NNPC Ltd Variance

Million MT Million MT Million MT %
Gas Sales 10.611 1.55 9.06 85.4%
Source: NEITI 2022- 2023 OGA, 2024 (NURPC Gas Production Templates and NNPC Ltd
Sales Records)

62
The table below shows the disaggregation of sales of gas by the NNPC Limited.

Table 43: Gas Sales Quantity and Value

Description Quantity Sales Value
MT'000 US$'000
Export Gas 1,492 1,086,671
Domestic Gas 56 36,859
Total 1,548 1,123,530
Source: NEITI 2022-2023 OGA, 2024

Table below shows that gas sales proceeds was US$1.124 billion in 2022, comparing US$1.252
billion in 2021. The 10% decline was due to decrease in gas production.

Table 44: Gas Sales Proceeds

Description 2022 2021 Changes
US$'000 US$'000 US$'000 %
Proceeds from the Sales of Federation JV Equity Gas 1,123,530 648,441 475,089 73%
Proceeds from the Sales of JV Feedstock 603,661 (603,661) -100%
Total 1,123,530 1,252,102 (128,572) -10%
Source: NEITI 2022-2023 OGA, 2024

63
CHAPTER 4
Climate Change, Energy Transition and NEITI 2022-
2023 Industry Reporting
The global response to climate change and the shift towards a sustainable energy future have
significant implications for resource-rich nations like Nigeria. As part of the country's efforts
to transition to cleaner energy and mitigate the impacts of climate change, the Nigeria
Extractive Industries Transparency Initiative (NEITI) plays a crucial role through its 2022/2023
Extractive Industry Reporting. These reports provide a transparent and comprehensive account
of the nation's extractive activities, offering insights into how Nigeria is navigating the
challenges of climate change, aligning with global energy transition goals, and ensuring the
responsible management of its natural resources. By disclosing critical data, NEITI supports
informed policymaking, fosters accountability, and drives reforms in the oil, gas, and solid
minerals sectors—key areas affected by climate change and the global energy transition.

4.1. Climate Change and Energy Transition Efforts by

Oil and Gas Companies in Nigeria
In response to global climate change concerns, oil and gas companies operating in Nigeria are
increasingly aligning their activities with energy transition goals aimed at reducing greenhouse
gas emissions and promoting sustainability. These companies are taking steps to support
Nigeria’s commitments under international agreements like the Paris Agreement, as well as the
country’s broader energy transition agenda. The table below shows the key efforts.

Table 45: Key Efforts of Companies in the Oil and Gas Sector in Nigeria

Key Efforts Descriptions

Reduction of Carbon Companies are investing in technologies that lower carbon
Emissions emissions, such as flare reduction programs, improved energy
efficiency, and carbon capture and storage (CCS) initiatives.
Shift to Renewable Energy Some firms are diversifying their energy portfolios by
investing in renewable sources like solar and wind power,
contributing to the long-term goal of transitioning from fossil
fuels to sustainable energy production.
Natural Gas as a Transition Oil and gas companies are promoting the use of natural gas as
Fuel a cleaner alternative to oil, expanding gas infrastructure for
domestic use, power generation, and exports.
Research and Innovation Companies are boosting research into green technologies,
exploring alternatives like hydrogen energy and biofuels to
support a future low-carbon economy.
Environmental and Social Firms are strengthening their ESG frameworks, integrating
Governance (ESG) sustainability into business models and transparently reporting
Compliance on their climate actions to stakeholders.
Source: NEITI 2022-2023 OGA, 2024
64
Furthermore, the Nigeria Extractive Industries Transparency Initiative (NEITI) 2022/2023
industry reports aim to enhance the comprehensive understanding of the oil and gas sector’s
progress in addressing climate change, energy transition, and resource management as shown
in the table below.

Table 46: NEITI 2022-2023 Industry Report on Climate Change

Key Efforts Descriptions

Assess Industry Evaluate the extent to which oil and gas companies are complying
Compliance with national and international climate goals, particularly in reducing
carbon emissions and transitioning towards cleaner energy.
Highlight Financial Disclose financial flows, including revenues, subsidies, and
and Environmental investments related to sustainability efforts, while also assessing the
Impact environmental impact of extractive activities.
Support Policy Provide data-driven insights to guide policymakers in shaping
Development Nigeria’s energy transition strategy and addressing climate
challenges, particularly in the oil and gas sectors.
Promote Ensure that the activities of oil and gas companies, as well as
Transparency and government agencies, are transparently reported to foster public trust
Accountability and encourage accountability in the industry’s efforts to combat
climate change.
Source: NEITI 2022-2023 OGA, 2024

By disclosing critical data and evaluating the sector’s contributions to the energy transition, the
2022/2023 NEITI reports will play a vital role in shaping Nigeria’s future energy policies and
supporting its journey toward a sustainable and low-carbon economy. Table below shows the
companies responses to climate change policies and implementation status in the oil and gas
sector in Nigeria.

Table 47: 2022 Companies Responses to Climate Change Polices and Implementation Status

Parameters Response
# %
Responsive Available 20 32%
Not Available 42 68%
Work-In-Progress - 0%
Non-Responsive None - 0%
Total 62 100%
Source: NEITI 2022-2023 OGA, 2024

65
4.2. Companies’ Greenhouse Gas Emissions

The table below presents the responses of companies regarding Greenhouse Gas (GHG)
emissions disclosure in Nigeria's oil and gas sector. For further details on GHG emissions from
operating companies during the review period, for details, refer to Appendix 12: Schedule of
GHG Emission.

Table 48: 2022 Company Responses Greenhouse Gas Emission

Parameters Response
# %
Responsive Available 15 24%
Not Available 47 76%
Work-In-Progress - 0%
Non-Responsive None - 0%
Total 62 100%
Source: NEITI 2022-2023 OGA, 2024

66
CHAPTER 5
Revenue Collection and Reconciliation
This section contains revenue collected from companies operating in the upstream sector of the
oil and gas industry. A total of thirty-four (34) revenue streams as stated in Chapter One were
reported. These revenue streams were further disaggregated to sector-specific revenue streams,
non-financial transactions, dividends and revenue received from the sale of Federation equity
crude oil, gas, feedstock and profit oil.

5.1. Total Revenue from the Sector

The total revenue received was US$37,772billion representing an increase of 55.2% from
US$23.046 billion received in 2021 as shown in the table below.

Table 49: Total Revenue from the Sector

Description 2022 2021 Change

US$ 000 US$ 000 US$ 000 %

Dividend Payments and Sales of 13,435,228 4,925,177 8,510,051 172.8%

Federation Crude oil and Gas
PSCs / MCAs In-Kind Payments 5,505,558 3,895,261 1,610,297 41.3%
Other Specific Financial Flows 5,893,903 7,691,033 - 1,797,130 -23.4%
to the Government (NUPRC)
Revenue Flows to Government 7,171,009 5,525,640 1,645,369 29.8%
Agency (FIRS)
Sub-National Flows 3,766,514 1,008,976 2,757,538 273.3%

Total 35,772,211 23,046,087 12,726,124 55.2%

Source: 2021 NEITI OGA Report and NEITI 2022-2023 OGA, 2024

5.2. Distribution of Revenue from the Sector

The analysis of the revenue distribution of the US$35.772 billion received in 2022, shows that
US$30.890 billion (86.35%) was transferred into the Federation and the NNPC Ltd Accounts,
US$1.11 billion (3.11%) being NLNG dividend received on behalf of the Federation by NNPC
and paid into NNPC designated account. Furthermore, US$2.309 million (0.01%) was
transferred into third parties’ project financing accounts while US$5.2 billion (10.53%) were
subnational transfers as shown in the Figure below.

67
Figure 13: Revenue Distribution Chart (Billion Dollars)

NNPC Designed
Account Third Party
Sub National Financing
Transfer 3%
0%
11%

Federation
Account
86%

Source: NEITI 2022-2023 OGA, 2024

5.3. Ten-Year Trend of Total Financial Flows

A ten-year aggregate revenue accruing to the government from the sector was U$321.56 billion
as presented in the Figure below.

Figure 14: Ten-Year Trend of Total Financial Flows

70

60

50

40

30

20

10

0
US$' B US$' B US$' B US$' B US$' B US$' B US$' B US$' B US$' B US$' B
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Total 58.08 54.555 24.791 17.055 20.988 32.626 34.218 20.430 23.046 35.772
Source: 2013- 2021 NEITI OGA Reports and NEITI 2022-2023 OGA, 2024

68
5.4. Disaggregation of Revenue Flows
The total financial receipt of US$ 35.772 billion received from companies operating in the
upstream oil and gas sector in Nigeria is disaggregated in the table below.

Table 50: Disaggregation of Revenue Flows

Description 2022 2021 Change

US$ 000 US$ 000 US$ 000 %

Dividend Payments and Sales

of Federation Crude oil and
Gas
Proceeds from the sales of 168,379 4,798,817 (4,630,438) -96.49%
Federation equity crude oil
Proceeds from the sales of 10,133,003 5,851,714 4,281,289 73.16%
domestic crude oil
Proceeds from the sales of 897,311 90,470 806,841 891.83%
profit oil
Proceeds from the sales of 1,123,530 648,441 475,089 73.27%
Federation equity gas
Proceeds from the sales of - 603,661 (603,661) -100.00%
Feedstock
NNPCLTD Dividend - - -
NLNG Dividend 1,113,006 722,596 390,410 54.03%

Total Sales of Federation 13,435,228 12,715,699 719,529 5.66%

Crude Oil and Gas (i)

PSCs / MCAs In-Kind

Payments
Petroleum Profit Tax - MCAs - 115,574 (115,574) -100.00%
Petroleum Profit Tax - PSCs 3,025,287 1,515,287 1,510,000 99.65%
Petroleum Profit Tax - SC - 20,913 (20,913) -100.00%
Company Income Tax (CIT) - 8,989 (8,989) -100.00%
Feedstock - MCAs
Royalty (Oil) - MCAs & RA - 262,536 (262,536) -100.00%
Royalty (Oil) - PSCs 2,476,808 1,946,728 530,080 27.23%
Royalty (Oil) - SC - 13,119 (13,119) -100.00%
Royalty Feedstock - MCA - 2,255 (2,255) -100.00%
EDT Gas - MCA - - -
EDT Oil - MCA - 7,254 (7,254) -100.00%
Concession rentals- PSCs 3,463 2,606 857 32.88%

69
 Description 2022 2021 Change
US$ 000 US$ 000 US$ 000 %
Total PSCs / MCAs/ Other 5,505,558 3,895,261 1,610,297 41.34%
financial flows in-Kind
Payments (ii)

Subtotal (A)=(i)-(ii) 18,940,786 8,820,438 10,120,348 114.74%

Other Specific Financial

Flows to the Government
(NUPRC)

Royalty (Oil) 4,292,109 4,841,760 (549,651) -11.35%

Royalty (Gas) 659,974 636,430 23,544 3.70%
Gas Flare Penalty (GFP) 164,809 249,159 (84,350) -33.85%
Concession Rentals 19,431 8,935 10,496 117.48%
Miscellaneous Income 4,279 1,244,952 (1,240,673) -99.66%
Transportation Revenue 51,822 219,181 (167,359) -76.36%
Signature Bonus & License 701,478 490,616 210,862 42.98%
Renewal

Total Other Specific 5,893,903 7,691,033 (1,797,130) -23.37%

Financial Flows to
Government (iii)

Revenue Flows to
Government Agency (FIRS)
Petroleum Profit Tax 4,900,253 3,394,061 1,506,192 44.38%
Company Income Tax 565,385 612,593 (47,208) -7.71%
Value Added Tax 570,611 565,487 5,124 0.91%
Hydrocarbon Tax 12,600 - 12,600 100%
Pay as You Earn (FIRS) 88,339 - 88,339 100%
Capital Gain Tax 24,597 26,562 (1,965) -7.40%
Withholding Tax 684,407 701,201 (16,794) -2.40%
Education Tax 322,989 225,736 97,253 43.08%
Stamp Duties 1,829 - 1,829 100%
Total Other Flows to 7,171,009 5,525,640 1,645,369 29.78%
Government (iv)

Subtotal (B)=(iii)+(iv) 13,064,911 13,216,673 (151,762) -1.15%

Sub-National Flows

70
 Description 2022 2021 Change
US$ 000 US$ 000 US$ 000 %
Niger Delta Development 685,262 797,019 (111,757) -14.02%
Commission Levy
Nigerian Content 613,115 66,683 546,432 819.45%
Development and Monitoring
Board Levy
Withholding Tax to State 28,083 - 28,083 100%
NESS Fee 1,153,594 16,689 1,136,905 6812.30%
Pay as You Earn to State 1,286,418 128,585 1,157,833 900.44%
Environmental Monitoring & 19 - 19 100%
Evaluation Payment
Environmental Impact 23 - 23 100%
Assessment Payment

Subtotal (C) 3,766,514 1,008,976 2,757,538 273.30%

Total (A)+(B)+ (C) 35,772,211 23,046,087 12,726,124 55.22%

Source: 2021 NEITI OGA Report and NEITI 2022-2023 OGA, 2024

5.4.1. Reconciliation of Revenue Flows

In accordance with the NSWG resolution on the reconciliation of records, the IA conducted a
thorough reconciliation of the records provided by companies and government agencies. This
reconciliation was carried out at both the company level and by revenue stream. All initial
templates populated by the companies were validated against source documents, reconciled
with corresponding government records, and adjusted as necessary to ensure accuracy and
completeness. The table below provides the breakdown of reconciled revenues. A total of
thirty-four (34) revenue streams were identified out of which twenty-two (22) were fully
reconciled, and ten (10) revenue streams were unilaterally disclosed and two has no transaction.

The unilaterally disclosed revenues include Nigerian Export Supervision Scheme (NESS) Fee,
Environmental Impact Assessment Payment, Environmental Disaster Management Payment,
Environmental Monitoring & Evaluation Payment, Withholding Tax (State & FIRS), Pay-As-
You-Earn (PAYE: State & FIRS), Transportation revenue and Miscellaneous Income. Notably,
two revenue streams, Domestic Gas Delivery Penalty and Environmental Remediation Fund
did not record any payments during the review period. See Appendix 8 Payments Project Level
Reporting

71
Table 51: Reconciliation of Revenue Flows
Initial Reconciliation Adjustment Final Reconciliation
Description Company Government Difference Company Government Company Government Difference
US$ US$ US$ US$ US$ US$ US$ US$
Royalty (Oil) 3,991,170,704 3,530,661,075 460,509,629 300,938,548 761,448,198 4,292,109,253 4,292,109,273 - 20
Royalty (Gas) 493,196,712 624,124,860 - 130,928,148 166,776,924 35,848,776 659,973,637 659,973,637 -
Signature Bonus 72,072,195 - 72,072,195 - 72,072,195 72,072,195 72,072,195 -
Gas Flare Penalty 144,953,435 155,766,655 - 10,813,220 19,855,532 9,042,263 164,808,967 164,808,918 50
Concession Rental 6,412,946 6,308,650 104,296 877,569 981,864 7,290,514 7,290,514 -
License Fees & Acreage Rental 59,667,591 59,667,591 - - - 59,667,591 59,667,591 -
Transportation Fees 51,822,427 45,227,503 6,594,923 - 6,594,923 51,822,427 51,822,427 -
Petroleum Profit Tax 5,207,216,080 3,792,841,612 1,414,374,467 - 306,963,367 1,107,411,100 4,900,252,712 4,900,252,712 1
Company Income Tax 802,721,326 305,498,551 497,222,775 - 237,336,600 259,886,175 565,384,726 565,384,726 0
Education Tax 559,533,743 329,482,011 230,051,732 - 236,544,911 - 6,493,177 322,988,833 322,988,834 - 1
Capital Gain Tax 24,597,155 24,597,155 - - - 24,597,155 24,597,155 -
Niger Delta Development Levy 787,503,168 571,800,468 215,702,700 - 104,015,004 113,461,286 683,488,165 685,261,754 - 1,773,589
Nigerian Content Development 571,955,672 582,166,769 - 10,211,097 41,087,733 30,948,563 613,043,404 613,115,332 - 71,927
& Monitoring Board (1%)
Value Added Tax 494,874,203 608,256,561 - 113,382,358 75,313,872 - 37,646,002 570,188,076 570,610,558 - 422,483
NESS 1,146,859,663 1,087,504,487 59,355,175 6,734,453 66,089,628 1,153,594,116 1,153,594,116 - 0
Withholding Tax- FIRS 2,448,185,677 632,316,168 1,815,869,509 - 1,763,981,932 52,090,686 684,203,744 684,406,854 - 203,110
Withholding Tax- State 28,083,173 8,962,110 19,121,063 - 19,121,063 28,083,173 28,083,173 -
Pay as You Earn (PAYE)- FIRS 89,034,429 88,338,809 695,619 - 695,620 - 88,338,809 88,338,809 - 0
Pay as You Earn (PAYE)- State 2,286,980,956 1,429,591,358 857,389,598 - 1,000,499,180 -143,173,680 1,286,481,776 1,286,417,678 64,098
EIA Payment 22,548 - 22,548 - 22,548 22,548 22,548 -
Environmental Monitoring & 19,316 14,758 4,558 - 4,558 19,316 19,316 -
Evaluation Payment
Hydrocarbon Tax - 12,600,200 - 12,600,200 12,600,200 - 12,600,200 12,600,200 -
Stamp Duty 31,436 1,828,569 - 1,797,133 1,788,723 168 1,820,160 1,828,737 - 8,578
TOTAL 19,266,914,554 13,897,555,922 5,369,358,632 - 3,024,063,059 2,347,711,133 16,242,851,495 16,245,267,055 - 2,415,560
Source: NEITI 2022-2023 OGA, 2024

72
5.5. Outstanding Liabilities
Total liabilities from the sector are US$ 6.175 billion comprising US$6.072 billion and
N66.378 billion (equivalent of US$ 102.765 million) owed to the NUPRC and the FIRS. The
liabilities for the 2021 NEITI extractive reporting was US$ 8.264 billion.

Description
As at 31st August 2024
US $ N
NURPC
Royalty Oil 5,017,779,729 -
Royalty Gas 153,211,170 -
Royalty Gas (Naira) - 65,885,079,249
Gas Flare 861,947,470 -
Rent 17,015,605 -
Subtotal 6,049,953,974 65,885,079,249

As at 30th June 2024

FIRS
PPT 13,211,754 -
CIT 1,553,648 65,992,860
EDT 482,190 -
VAT 2,511,107 194,395,225
WHT 4,168,183 229,039,364
LRP - 3,345,000
Subtotal 21,926,882 492,772,449

Total 6,071,880,856 66,377,851,698

73
CHAPTER 6
Project Cost
6.1. Joint Venture Cost: Cash Call
Cash calls are payments made by the National Petroleum Investment Management Service
(NUIMS) to JV partners as the government’s equity contribution for exploration and
production activities. These payments are treated as first-line deductions by the NNPC from
the sales proceeds of crude oil and gas. The Joint Venture Cash Call Account (JVCC)
warehouses Cash call funding inflows from the JV proceeds accounts and subsequently
transfers these to the respective JV partners

6.1.1. JV Partners
The NNPC has Joint Venture Agreements (JVAs) with thirteen (13) JV partners which NUIMS
manages on behalf of the Federal Government. NUIMS also supervises the mechanism of
funding of the JV operations through the cash-call process.

The governance requirements of the Joint Operating Agreement (JOA) which guides JV
operations specify the need for a review of the joint operations budget and performance relating
to such equity holding(s). Table below shows JV partners and equity holding in 2022.

74
Table 52: JV Partners And Equity Holding
Equity Participatory Interest
# J V Partner JV ASSETS

NEWCROSS
PANOCEAN

FIRST E&P
CHEVRON

BELEMA

SAHARA
EROTON

SEPLAT
MOBIL

TEPNG
SHELL

AITEO

HHOG
NAOC

WAEP

AMNI
NNPC
% % % % % % % % % % % % % % % % % OML
1 SHELL 55 30 10 5 20, 21, 22, 23, 25, 27, 28,
31, 32, 33, 35, 36, 43, 45,
46, 74, 77, 79
2 MOBIL 60 40 104, 67, 68, 70
3 CHEVRON 60 40 49, 51, 89, 91, 86, 88, 90, 95
4 TEPNG 60 40 99,100, 102, 58
5 NEWCROSS 55 45 24 (Transferred to NPDC)
6 FEPDCL 60 40 83, 85
7 EROTON/ OML 18 55 28.8 16.2 18
8 AITEO 55 45 29
9 BELEMA 60 40 55
10 SEPLAT 60 40 53
11 WAEP 55 45 71, 72
12 AMNI 60 40 52
13 HHOG 55 45 17
Source: NEITI 2022-2023 OGA, 2024

75
6.1.2. Cash Call Budget
The OPCOM meets annually to draw-up and approve the Cash call budget based on work
programmes for each JV operation. There are fourteen (14) JV operators for the thirteen (13)
JVAs, NEPL is the 14th operator managing some of the assets belonging to NNPC/SPDC and
NNPC/CNL JVs.

The total approved OPCOM budget for 2022 was US$ 7.523billion, comprising US$4.366
billion (58%) for NNPC’s and US$ 3.16 billion (42%) for JV partners as shown in table below.

Table 53: 2022 OPCOM Approved Cash-Call Budget

Company Total Approved Budget Approved Budget
NNPC Share
Source Source Equivalent Source Source Equivalent
Naira Dollar Dollar Naira Dollar Dollar

N' US$' EQUS$' N' US$' EQUS$'

Billion Billion Billion Billion Billion Billion
Shell 426.99 0.93 1.94 234.84 0.51 1.07
Mobil 265.03 0.72 1.34 159.02 0.43 0.81
Chevron 338.80 0.59 1.39 203.28 0.36 0.84
TEPNG 240.61 0.53 1.10 144.36 0.32 0.66
Newcross 38.72 0.12 0.21 21.30 0.07 0.12
FEPDCL 71.90 0.19 0.36 43.14 0.11 0.21
EROTON 25.54 0.03 0.09 14.04 0.02 0.05
/ OML 18
Aiteo 180.71 0.33 0.76 99.39 0.18 0.42
Belema - - - - - -
Seplat 27.19 0.07 0.13 16.31 0.04 0.08
WAEP 3.52 0.00 0.01 1.94 0.00 0.01
AMNI 1.36 0.00 0.00 0.82 0.00 0.00
HHOG 37.71 0.07 0.16 20.74 0.04 0.09
Subtotal 1,658.07 3.58 7.50 959.18 2.07 4.34
NEPL 0.76 0.02 0.03 0.76 0.02 0.03
Total 1,658.83 3.60 7.52 959.95 2.10 4.37
Source: NNPC-NUIMS OPCOM Budget and NEITI 2022 template

6.1.3. Cash Call Funding Account

The total inflow into the JVCC accounts in 2022 was US$4.628billion (N1.051Trillion and
US$2.146billion). In addition, US$27.818million (N11.775billion) was carried forward arising
from undistributed balances in 2022. This brought the total amount of distributable funding in
2022 to US$4.656billion. Table below shows the summary of JV Cash Call accounts inflow
and outflow.

76
Table 54: Summary of Inflow and Outflow into Joint Venture Cash Call Bank Accounts

Description N' Billion US$' Billion EQ$' Billion

Opening Balance 11.78 0.00 0.03

Inflow 1,050.79 2.15 4.63
Outflow 1,058.58 2.08 4.58
Closing Balance 3.98 0.07 0.08
Source: January - December 2022 Bank Statement (CBN/NNPC JVCC Naira Account and
Standard Chartered Bank JVCC Dollar Account), NUIMS Records

Table below shows the disaggregated analysis of inflow into the JVCC Accounts

Table 55: Analysis of Total Inflow to JVCC Accounts

Description N Million US$ Million EQUS$' Million

2020 Cash Call Funding

2021 Cash Call 35,612.87 611.95 696.08
2022 Cash Call 683,904.69 1,204.66 2,820.31
2021cash Call Monetization - - -
2022 Cash Call Monetization 255,414.79 - 603.39
Interest Received - 0.01 0.01
Funding Repayment - 49.99 49.99
Reversal Of Cash Call Payment 75,852.94 279.39 458.58

Total 1,050,785.29 2,145.99 4,628.35

Source: January - December 2022 Bank Statement (CBN/NNPC JVCC Naira Account and
Standard Chartered Bank JVCC Dollar Account), NUIMS Records

Table 56: Analysis of Total payments from JVCC Accounts

Description N' Million US$' Million EQ US$' Million

2020 Cash Call 4,088.99 - 9.66

2021 Cash Call 85,253.99 547.12 748.52
2022 Cash Call 782,131.17 377.38 2,225.08
Bank Charges 1.23 - 0.00
Reversal of Cash Call Payment 75,852.94 279.39 458.58
NESS 5,838.51 - 13.79
VAT 365.16 1.78 2.64
WHT 266.56 1.26 1.89

77
 Description N' Million US$' Million EQ US$' Million

Gas Development Infrastructure 2,427.02 5.62 11.35

Renewable Energy Development 395.52 - 0.93
Frontier Exploration Services 22,009.56 3.05 55.04
FIRS 54.66 - 0.13
Field Offshore Design 20,953.02 20.00 69.50
NAPIMS Operation 58,945.74 100.96 240.47
Monetization - 739.80 739.80

Total 1,058,584.07 2,076.35 4,577.40

Source: January - December 2022 Bank Statement (CBN/NNPC JVCC Naira Account and
Standard Chartered Bank JVCC Dollar Account), NUIMS Records

US$190.375million was spent in 2022 while funding provided was US$240.473million

representing 1.26% of total expenditure and 60.95% of approved budget.

Table 57: Summary of NUIMS Overheads performance and 2022 Funding

Description 2022 Budget 2022 2022 Actual 2022 2022 Overheads Funding
Budget Actual

N' Million EQ US$' N' Million EQ US$' N' Million US$' EQ US$'
Million Million Million Million
@423.3 @423.3 @423.3
Total CAPEX 12,475.01 29.47 4,980.61 11.77 58,945.74 100.96 240.47
Total PEX 71,023.15 167.78 75,605.30 178.61 - - -
Total CAPEX and OPEX 83,498.16 197.26 80,585.91 190.38 58,945.74 100.96 240.47
Source: NUIMS 2022 budget performance report, 2022 Standard Chartered Bank JVCC Dollar
Account, NUIMS records

6.1.4. Cash Call to JV Operators

Total outflow from the JVCC account was US$ 4.577 billion (N1.059 trillion and US$2.076
billion) in 2022, comprising cash calls of US$ 2.983 billion (65.17%) including arrears for
2020 and 2021. While non-cash call related payments were US$ 1.594 billion (34.83%).

US$ 2.983 billion comprising US$ 2.225 billion (74.59%) for 2022 cash calls, while US$
9.660million (0.32%) and US$ 748.522 million (25.09%%) are for 2020 and 2021 cash call
arrears. The table below shows the details of the cash call payments to operators in 2022.

Table 58: Details of Outflow from Joint Venture Cash Call Bank Account

S/N Partners N' Million US$' Million EQ US$' Million

1 SPDC 216,458.45 152.33 663.69

2 MPN 148,280.01 214.40 564.69
3 CNL 133,335.50 157.77 472.76
4 TEPNG 82,319.42 86.54 281.01

78
 S/N Partners N' Million US$' Million EQ US$' Million
5 NPDC 6,447.75 3.76 18.99
6 SEPLAT 15,195.15 19.43 55.32
7 NEWCROSS 19,385.94 17.35 63.15
8 FIRST (E&P) 25,325.81 34.60 94.43
9 NNPC/EROTON 13,639.69 14.21 46.43
10 NNPC/AITEO 103,159.23 107.56 351.27
11 NNPC/BELEMA 9,331.87 7.28 29.32
12 NNPC/HHOG 96,463.68 90.95 318.83
13 NNPC/WAEP 1,383.43 2.49 5.76
14 NNPC/AMNI 748.21 0.79 2.56
15 Others - 15.03 15.03

Total 871,474.15 924.50 2,983.26

Source: January - December 2022 Bank Statement (CBN/NNPC JVCC Naira Account and
Standard Chartered Bank JVCC Dollar Account), NUIMS Records

79
CHAPTER 7
Midstream and Downstream Operations
The Midstream and Downstream operations are overseen by the Nigerian Midstream and
Downstream Petroleum Regulatory Authority (NMDPRA), while the Domestic Crude Supply
Obligation (DCSO) falls under the coordination of the Nigerian Upstream Petroleum
Regulatory Commission (NUPRC). See the Contextual Report for detailed description of laws,
regulations, policies on Midstream and Downstream Operations in Nigeria.

7.1. Midstream Operations

This section discusses the refinery operations, the domestic crude supply obligations (DCSO),
infrastructure in the midstream and NNPC refineries balances.

7.1.1. Refinery Operations

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) issues
three types of refinery licenses: License to Establish (LTE), License to Construct (LTC), and
License to Operate (LTO).

A total of seven (7) refineries licenses/ approvals were issued in 2022 by the NMDPRA,
comprising five (5) LTE and two (2) LTC with a combined refinery capacity of 856,500 barrels
per day as shown in the table below.

Table 59: Refinery Licenses and Approvals Issued in 2022

# Company Location Types of Capacity Licene Date of Validity
Facility / Plant (BPD) Type issue period
1 Docerad Bayelsa Topping plant 1,000 LTE 12/12/2022
Consulting State (Modular Plant) Two (2)
Services Ltd years
2 Rhemadok Delta Hydroskimming 63,000 LTE 11/07/2022
Refinery and State plant
petro chemical
cmpany Ltd
3 MoreBarrels Delta Topping plant 25,000 LTE 18/8/2022
petrochemical state (Modular Plant)
Ltd
4 Conex Bayelsa Topping plant 10,000 LTE 17/8/2022
Monserrado JV State (Modular)
5 Murphy Delta Hydroskimming 105,000 LTE 17/8/2022
Akpieyi State plant (modular)
Company
Nigeria Ltd
6 Duport Edo Topping plant 2,500 LTC 18/10/2022
Midstream State (Modular) Presently
Company Ltd given

80
 # Company Location Types of Capacity Licene Date of Validity
Facility / Plant (BPD) Type issue period
7 Dangote Lagos Hydroskimming 650,000 LTC 18/10/2022 approval to
Petroleum State plant introduce
Refinery and (conventional) hydrocarbon
petrochemical
FZE
Total 856,500
Source: NEITI 2022-2023 OGA, 2024 (NMDPRA Responses)

7.1.2. Domestic Crude Supply Obligations

The Domestic Crude Supply Obligation (DCSO) is designed to guarantee the supply of crude
oil to local refineries under specified conditions. For a comprehensive understanding of the
relevant laws and regulations governing the DCSO, please refer to the Contextual Report.

In 2022, the NUPRC reported that no endorsed or processed Export Permits were issued by the
Federal Government for DCSO operations. Additionally, there were no DCSO applications
received, nor were any approvals granted, resulting in no actual DCSO deliveries to the
refineries during the year.

7.1.3. Associated and Non-Associated Gas and Crude Pipeline

Infrastructure
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) plays
a crucial role in coordinating pipeline infrastructure within the midstream sector of Nigeria's
oil and gas industry. The NMDPRA is tasked with ensuring compliance with regulations
governing midstream operations, including technical, operational, and commercial activities
related to pipeline infrastructure.

Table 60: Significant Pipeline Infrastructure Investment and Projects in the Midstream

Project Title

Akk Gas Pipeline & Stations Project

Anoh-OB3-Ctms Feeder Lines
New Egbin Metering Station (NEMS)
Nigeria-Morocco Gas Pipeline
OB3 Gas Pipeline Project
Obob-OB3 Ctms & Anoh-Ob3 Ctms Feeder Lines
Pre-Fid Studies for New Gas Processing Plant
Rehab and Expansion of Onne Metering Station
Rehabilitation of Sapele-Oben-Delta Iv-Ajaokuta Metering Stations
Trans Nigeria Gas Pipeline (TNGP)
Source: NEITI 2022- 2023 OGA, 2024

81
7.1.4. NNPC Refineries’ Balance
The refineries owned by NNPCL include the Port Harcourt Refinery Company (PHRC), Warri
Refining and Petrochemical Company Limited (WRPC), and Kaduna Refining and
Petrochemical Company Limited (KRPC). No balances were reported for KRPC in 2022. The
tables below provide detailed balances for PHRC and WRPC.

Table 61: PHRC Refinery Balance (Crude Material Balance)

Opening Receipt Processed Closing Audit

Crude Stock Stock Closing Variance
Blend Stock
Bbls bbls bbls bbls bbls bbls
Bonny 133,666 - - 156,288 133,666 (22,622)
Light
Source: NEITI 2022 – 2023 OGA, 2024

Table 62: PHRC Refinery Balance (Products Material Balance)

Products Opening Production Evacuation Losses Closing Calculated Variance
Stock Stock Closing
Stock
MT MT MT MT MT MT MT
Off Gas - - - - - - -
LPG - - - - - - -
PMS 11 (1) 13 8 (4) 11
DPK 9 (6) - 3 3 -
AGO 12 (4) 0 8 8 -
LPFO 72 30 67 35 35 -
LPG Flared - - - - - - -
Intermediate - - - - - - -
Product
Losses - - - - - - -
Total 104 19 81 - 54 43 11
Source: NEITI 2022 – 2023 OGA, 2024

Table 63: WRPC Refinery Balance (Crude Material Balance)

Crude Blend Opening Receipt Processed Closing Audit Variance

Stock Stock Closing
Stock
Bbls bbls bbls bbls bbls bbls
Bonny - - -
ND Western - 325,911 - 298,494 325,911 27,417
Escravos 58,290 - - 86,158 58,290 (27,868)
Forcados 234,713 - - 258,164 234,713 (23,451)
Slop 34,869 - - 23,414 34,869 11,455
Seplat 70,611 (180,076) - 70,004 (109,465) (179,469)

82
 Crude Blend Opening Receipt Processed Closing Audit Variance
Stock Stock Closing
Stock
Bbls bbls bbls bbls bbls bbls
Total 398,483 145,835 - 736,233 544,317 (191,916)
Source: NEITI 2022 – 2023 OGA, 2024

Table 64: WRPC Refinery Balance (Products Material Balance)

Products Opening Production Evacuation Losses Closing Calculated Variance
Stock Stock Closing
Stock
MT MT MT MT MT MT MT
LPG 923 - - - - 923 (923)
PMS 23,876 126,472 138,487 - 10,711 11,862 (1,151)
DPK 4,412 - - 4,088 4,412 (324)
AGO 1,832 - 73 - 1,752 1,759 (7)
LPFO 10,160 (3,310) - - 10,840 6,850 3,990
Consumption 2,291 3,310 - - - 5,601 (5,601)
Losses - - - - - - -
Total 43,494 126,472 138,560 - 27,391 31,407 (4,016)
Source: NEITI 2022 – 2023 OGA, 2024

7.2. Downstream Operations

This section discusses the domestic crude allocation and utilisation, infrastructure in the
downstream and product importation and distribution.

7.2.1.Domestic Crude Allocation and Utilisation

The rationale behind the allocation of 445,000 barrels of crude oil daily to NNPC Limited was
to guarantee a consistent and preferential supply, thereby facilitating the smooth operation of
government-owned local refineries. However, this objective has remained unrealized, as the
refineries have not functioned optimally for over two decades. Consequently, they have been
unable to effectively process the allocated domestic crude oil.

83
7.2.2.Product Import Valuation
A total 22.93 billion litres of PMS was imported by NNPC Limited with cost of N7.39 trillion,
revenue of N2.68 trillion and under recovery of N4.71 trillion. These importations were done
under DSDP, SPOT and CORDPA arrangement. The table below shows the value of the
imported refined PMS. See appendix 14 for 2022 NNPC Limited Imported PMS Valuation:
Quantity, Cost of Supply, Revenue and Under Recovery.

Table 65: NNPC Limited Imported PMS Cost, Revenue and Under Recovery
2022 QTY QTY Cost of Supply Revenue Under
Monthly Recovery
Million Litres' US$' N' N' N' Trillion
MT Billion Billion Trillion Trillion
January 1.34 1.80 1.08 0.42 0.22 0.20
February 1.17 1.57 1.10 0.43 0.19 0.24
March 1.97 2.64 2.11 0.83 0.33 0.50
April 1.93 2.59 2.20 0.86 0.32 0.54
May 0.92 1.23 1.06 0.43 0.15 0.27
June 1.30 1.74 1.82 0.73 0.19 0.54
July 1.39 1.86 1.82 0.74 0.21 0.54
August 1.27 1.70 1.34 0.56 0.19 0.37
September 1.25 1.67 1.12 0.47 0.19 0.29
October 1.39 1.87 1.41 0.61 0.21 0.40
November 1.65 2.21 1.72 0.74 0.25 0.50
December 1.52 2.04 1.31 0.57 0.23 0.34
Total 17.10 22.93 18.10 7.39 2.68 4.71
Source: NEITI 2022- 2023 OGA, 2024 (NNPC Limited Responses)

7.2.3.PMS Price Differentials

A total of N12.863 trillion has been claimed as under recovery/ price differentials between 2006
and 2022, with 2022 recording the highest of N4.714 trillion as shown in the Figure below.

Figure 15: Seventh (17) Year Trend of Petroleum Products Price Differentials- 2006 – 2022

NGN’ Trillion
5.00
4.00
3.00
2.00
1.00
-
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
NGN’ Trillion 0.22 0.24 0.36 0.20 0.42 1.90 0.69 0.50 0.48 0.32 0.10 0.14 0.72 0.58 0.13 1.16 4.71

Source: NEITI 2022- 2023 OGA, 2024 (Previous NEITI OGA Reports)

84
7.2.4.Products Imported
Products supplied and consumed are derived from product importation as discussed in the
subsequent subsections.

7.2.4.1. Products Supplied (Imported)

The table below shows the discharged imported products by marketers.

Table 66: Product Supplied (Imported)

Products Marketers 2022 2021 Changes
NNPC Ltd Other Marking Total QTY Total Total %
Companies (OMC) QTY QTY
QTY QTY
Billion Billion Litres Billion Billion Billion
Litres Litres Litres Litres
PMS 3.29 20.25 23.54 22.54 1.00 4%
DPK/HHK - 3.99 3.99 0.02 3.97 15987%
Source: NEITI 2022- 2023 OGA, 2024

Figure below shows the ten-year (2013 – 2022) trend of PMS computation with highest annual
importation in 2022 (23.54 billion litres) and lowest in 2017 (16.88 billion litres). Furthermore,
there has been continuous decline in NNPC Ltd importation from 2019 to 2022. However, the
total PMS importation increased from 2020 through to 2022.

Figure 16: PMS Importation Ten-Year Trend (2013-2022) (Billion Litres)

25.00

20.00

15.00

10.00

5.00

-
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
NNPC 7.32 6.72 8.05 10.94 13.32 20.00 5.57 4.23 3.44 3.29
Other Marketers 10.24 12.22 11.22 7.82 3.55 - 15.04 15.82 19.09 20.25
Source: NEITI 2022- 2023 OGA, 2024

85
The 2022 monthly trend from January to December shows that December (0.56 billion litres)
was the highest import by NNPC Ltd only. The highest import for both NNPCL and Other
marketers was in March (2.58 billion litres) and the lowest in February (1.17 billion litres).

Figure below shows the monthly product importation for NNPC Limited and other marketers.

Figure 17: 2022 Monthly Product Importation (Billion Litres)

3.00

2.50

2.00

1.50

1.00

0.50

-
Jan Feb Mar April May June July Aug Sept Oct Nov Dec
Other Marketers 1.59 0.95 2.19 2.03 1.79 1.59 1.72 1.92 1.54 1.54 1.67 1.71
NNPC 0.17 0.22 0.39 0.32 0.13 0.17 0.23 0.30 0.26 0.22 0.30 0.56

Source: NEITI 2022- 2023 OGA, 2024

86
CHAPTER 8
Social and Economic Spending
This section discusses infrastructure provisions, barter arrangement, social expenditures, and
quasi-fiscal expenditure. In addition, it discusses the contribution of the industry to the
economy and the environmental impact of the industry’s activities. See Contextual Report for
detailed description of the laws, regulations, policies and activities on social and economic
spending.

8.1. Infrastructure Provisions and Barter Arrangement

There were no infrastructure provisions for the purpose of lifting crude in lieu of payment for
infrastructure provision in the period under review. However, NNPC Limited entered Direct
Sales Direct Purchase arrangement allowing crude oil off-takers to lift crude in exchange for
refined petroleum products. The valuation is carried out by the NNPC Limited.

8.1.1. NNPC Limited Fiscal Commitment: Loan, Guarantee and

Contingent
The Assets, interest and liabilities of the erstwhile NNPC are now taken over by the NNPC
Limited in line with section 54 of the PIA, 2021. See the Contextual Report on the detailed
description of the NNPC Limited fiscal commitment with respect loan, guarantee and
contingents.

87
The table below shows Status of NNPC Limited commitments and contingencies

Table 67: Status of NNPC Limited Commitments and Contingencies as of 31st July 2024

Project Name Beneficiary Lender Financing Details NNPC Portion of the Facility Remark
Description US$
Million

Joint Venture Project Financing Loans:

Year Obtained: 2022 Facility Amount 1400 Principal repaym
Tenor: 7 years ent to
Project Panther NNPC/ Commercial Maturity Year: 2029 Amount Drawn 359 commence after
CNL JV Bank NNPC Participating Interest: 60% Repayment Amount- 0 moratorium.
Consortium to Date
(NCB & ICB Pledged barrels: 23,500bopd Balance Outstanding 359
Facility), Key Financing Terms: 3 Month
CNL (Co- SOFR + 5.5% Margin + 1%
Lender) Liquidity Premium.
Security/Loan Covenants: SPV,
Cash, Balance Sheet and Accounts
of SPV
Pre-Export Financing Loans (PxF Loans)
Year Obtained: 2021 Full and Final
Afrexim Tenor: 5 years Repayment
Project Bison (20% NNPC Bank - MLA Maturity Year: 2026 Facility Amount 1040 achieved on 28
equity acquisition NNPC Participating Interest: Amount Drawn 1037 June 2024.
of Dangote 100%
Refinery) Pledged barrels: 35,000bopd Repayment Amount- 1037
to Date

88
Project Name Beneficiary Lender Financing Details NNPC Portion of the Facility Remark
Description US$
Million
Key Financing Terms: Balance Outstanding 0
International Commercial Banks
Tranche – 3 Month Libor +
6.525% + 0.5% Liquidity
Premium.
Security/Loan Covenants: SPV,
Cash and Accounts of SPV, DSU
Year Obtained: 2020 Full and Final
Project Eagle NEPL Crude oil Tenor: 5 years Repayment
Export Funding traders (NCB Maturity Year: 2025 Facility Amount 935 achieved on 15
Original Debt and ICB) NNPC Participating Interest: Amount Drawn 841 September 2023.
100%
Pledged barrels: 30,000bopd Repayment Amount- 841
to Date
Key Financing Terms: Balance Outstanding 0
International Commercial Banks
Tranche – 3 Month Libor + 4.5%;
Nigerian Commercial Banks
Tranche – 3 Month Libor + 4.5% +
0.75% Liquidity Premium. All-In
Cost -5.05% p.a.
Security/Loan Covenants: SPV,
Cash and Accounts of SPV, Debt
Service Undertaking (DSU)

Year Obtained: 2021

89
Project Name Beneficiary Lender Financing Details NNPC Portion of the Facility Remark
Description US$
Million
Project Eagle Crude oil Tenor: 5 years Full and Final
Export Funding NEPL traders (NCB Maturity Year: 2026 Facility Amount 635 Repayment
Subsequent Debt and ICB) NNPC Participating Interest: Amount Drawn 635 achieved on 15
100% September 2023.
Pledged barrels: 6,000bopd Repayment Amount- 635
to Date
Key Financing Terms: Balance Outstanding 0
International Commercial Banks
Tranche – 3 Month Libor + 4.5%;
Nigerian Commercial Banks
Tranche – 3 Month Libor + 4.5% +
1.25% Liquidity Premium. All-In
Cost -5.40% p.a.
Security/Loan Covenants: SPV,
Cash and Accounts of SPV, DSU
Facility Amount: US$540 million
Year Obtained: 2023 Facility Amount 900
NEPL Tenor: 5 years Amount Drawn 900 Principal repaym
Crude oil Maturity Year: 2028 Repayment Amount- 62 ent
Project Eagle traders (NCB to Date commenced after
Export Funding and ICB) NNPC Participating Interest: Balance Outstanding 838 12-
Subsequent 2 Debt 100% month moratoriu
Pledged barrels: 21,000bopd m in June 2024.
Key Financing Terms:
International Commercial Banks
Tranche – 3 Month SOFR + 4.5 +

90
 Project Name Beneficiary Lender Financing Details NNPC Portion of the Facility Remark
Description US$
Million
0.5% Liquidity Premium; Nigerian
Commercial Banks Tranche – 3
Month SOFR + 5.5%% + 1%
Liquidity Premium.
Security/Loan Covenants: SPV,
CASH AND ACCOUNTS OF
SPV, DSU
Year Obtained: 2022
Tenor: 7 years
PHRC Afrexim/ Maturity Year: 2029 Facility Amount 950 Principal
Project Yield Metrix/ Gulf/ NNPC Participating Interest: Amount Drawn 950 repayment to
Zenith 100% commence in
Pledged barrels: 67,000bopd Repayment Amount- 0 Dec 2024.
to Date
Key Financing Terms: Balance Outstanding 950
International Commercial Banks
Tranche – 3 Month Libor + 5.4;
Nigerian Commercial Banks
Tranche – 3 Month Libor + 5.4%%
+ 0.5% Liquidity Premium.
Security/Loan Covenants: SPV,
CASH AND ACCOUNTS OF
SPV, DSU
Source: NEITI 2022- 2023 OGA, 2024

91
8.1.2. Tax Credit and Waiver for Investment Promotion in the Sector
NNPC Limited leveraged the Presidential Executive Order No. 007 of 2019 on the Road
Infrastructure Development and Refurbishment Investment Tax Credit Scheme. See appendix
15 for the Schedule of NNPC Limited approved road project costs.

The table below shows the summary of the status update as at 30 April 2024 following the
interagency meeting between NNPCL, FIRS, the Federal Ministry of Works, and the Federal
Ministry of Finance regarding the RITC scheme.

The variance of N28.2 billion was an accrued project cost claimed by the NNPCL without a
completion certificate and yet to be certified by the Committee.

Table 68: Status Update of NNPC Limited Tax Credit Under the Scheme: 30 April 2024

Company Credit Committee Variance Credit Notes Tax Credits

Notes as Certified Utilized Pre- Yet to Be
Per NNPCL Credit Note 2022 Utilized
N' Billion N' Billion N' Billion N' Billion N' Billion
NNPC Ltd 309.93 304.25 5.67 - 304.25
NGIC 6.09 5.93 0.16 - 5.93
NEPL 528.18 505.81 22.37 98.47 407.33
Total 844.20 815.99 28.21 98.47 717.52
Source: NEITI 2022 – 2023 OGA, 2024 (NNPC Responses)

8.2. Social Expenditures

2022
Host community development activities is a social expenditure made by settlors in the host
community in the sector. See the Contextual Report on the description, law and regulation of
Host Community Development Trust Fund. The table below shows the remittance of the 3%
OPEX.

Table 69: Host Community Development Remittance

Parameters 2022
Remittance in Billion Naira 4.630
Remittance in Million US$ 14.835
Source: NEITI 2022 – 2023 OGA, 2024 (NUPRC Responses)

92
Furthermore, a total of US$12.524 million (N5.301 billion) was reported by nineteen (19)
companies as voluntary social expenditure as shown in the table below.

Table 70: Voluntary Social Expenditure by Company

Company Contribution Equivalent

N US$
Amni International Petroleum Ltd 36,816,000 86,974
Aradel Holdings 356,060,093 841,153
Brittania U-Nigeria 16,220,000 38,318
Chorus Energy Limited 34,000,000 80,321
Elcrest Exploration and Production Nigeria Ltd 1,030,050,950 2,433,383
Equinor Nigeria Energy Company Limited 187,047,133 441,878
Frontier Oil Limited 62,580,444 147,839
Midwestern Oil and Gas 44,937,068 106,159
Mobil Producing Nigeria Unlimited 147,115,395 347,544
NAOC (Now Oando PLC) 1,555,379,000 3,674,413
Network Exploration & Production Ltd 45,575,150 107,666
Oriental Energy Resources Ltd 152,068,900 359,246
Pillar Oil Limited 182,379,945 430,853
Platform Petroleum Limited 148,843,160 351,626
Shell Nig. Exploration & Production Co Ltd 113,645,500 268,475
South Atlantic Pet. Ltd 150,582,000 355,734
Sterling Global Oil Resources Limited 239,599,000 566,026
Sterling Oil E&P Production Co Ltd 748,968,000 1,769,355
Universal Energy Limited 49,387,071 116,672
Total 5,301,254,809 12,523,635
Source: NEITI 2022 – 2023 OGA, 2024

A further review of the voluntary expenditures shows that companies spent N1.206 billion
(22.75%) on infrastructure and civil works, while N421.614 million (7.95%) was spent on
medical and health services. Furthermore, N17.2945 million was contributed to a community
trust fund as shown in the table below.

Table 71: Voluntary Social Expenditure by Utilisation

Description Contribution
N %
Host Community Trust Fund (Internal arrangement) 17,294,500 0.33%
Medical and Health Services 421,614,075 7.95%
Vocational Training, and Capacity Building 424,436,050 8.01%
Education and Scholarship 424,543,688 8.01%
Community Social & Cultural Engagements 647,017,183 12.20%

93
 Description Contribution
N %
Infrastructures and Civil Works 1,205,832,103 22.75%
Other Projects 2,160,517,210 40.75%
Total 5,301,254,809 100.00%
Source: NEITI 2022 – 2023 OGA, 2024

8.3. Quasi-Fiscal Expenditures

Quasi-fiscal expenditures are a class of expenditures carried by a state-owned enterprise but
are not reflected in the national budget. See the Contextual Report on the detailed description
of quasi-fiscal expenditures. Table below shows the quasi-fiscal expenditures.

Table 72: Quasi-Fiscal Expenditures

Description 2022 2021

NGN’ Billion NGN’ Billion
Equivalent Equivalent

JV Cost Recovery - 1,348

Pipeline Maintenance and Management 12 29
Costs
PMS under recovery/ Price Differentials/ 4,714 1,159
Subsidy
Crude Oil and Product Losses - 16
Government Priority Projects - 99
Total 4,726 2,651
Source: NEITI 2022 – 2023 OGA, 2024

Quasi-Fiscal Expenditure and deductions from FAAC by NNPCL was N12.425 billion on
pipeline security and maintenance from January to June 2022 ( 2 0 2 1 : US$6.931billion/
N2.651 trillion). Furthermore, PMS under recovery/ price differentials of N4.71 trillion in 2022
and N3.01 trillion in 2023.

8.4. Contribution of the Industry to the Economy

The contribution of the sector to the economy is discussed considering the Gross Domestic
Product (GDP), government revenue and employment.

8.4.1. Contribution to the Economy

A trend of the contribution of oil and gas sector to GDP in Nigeria from 2029 to 2022 shows a
decline from 7.32% in quarter 4 (2019) to 4.34% in quarter 4 (2022) as shown in the table
below. In 2022, the sector contributed 5.75% to Nigeria’s total GDP of N 202.365 trillion
(US$478.06 billion). The decline was due dwindling oil production occasioned by insecurity,
theft and sabotage.

94
Table 73: Trend of Contribution of the Sector to Nigeria’s Total GDP (2019 – 2022)

Quarter 2022 2021 2020 2019

1 6.63% 9.25% 9.50% 9.22%
2 6.33% 7.42% 8.93% 8.98%
3 5.66% 7.49% 8.73% 7,32%
4 4.34% 5.19% 5.87% 9.77%
Annual Average 5.74% 7.24% 8.16% 8.62%
Source: NEITI 2022 – 2023 OGA, 2024

8.4.2. Contribution to Exports

The contribution of the industry to Exports is shown in the table below.

Table 74: Contribution of the Sector to Total Export

Year Total Export Crude Oil and Gas Crude Oil and Gas
Exports Exports to Total
NGN’ US$’ NGN’ US$ Exports
Trillion Billion Trillion ’Billion
2019 19.192 48.019 14.690 36.754 76.54%
2020 12.523 31.333 9.4445 23.631 75.42%
2021 18.908 47.307 14.411 36.056 76.22%
2022 26.796 63.304 21.099 49.844 78.74%
Source: NEITI 2022 – 2023 OGA, 2024 & NBS

8.4.3. Contribution to Government Revenue

The contribution of the industry to government revenue was NGN 4.641 trillion (36.87%) as
shown in the table below.

Table 75: Contribution of the Sector to Government Revenue

Year Total Government Total Oil and Gas Crude Oil and Gas
Revenue Revenue Revenue to Total
NGN’ NGN’ Government Revenue
Trillion Trillion
2021 10.75 4.358 40.55%
2022 12.586 4.641 36.87%
Source: NEITI 2022 – 2023 OGA, 2024

95
8.4.4. Employment and Gender
There are regulations and policies on gender mainstreaming in the sector. See the Contextual
Report for description, regulations, policies and activities on Gender and Equality in the Sector

Employment information is presented according to gender, occupational level, the locale status
of employees disaggregated into indigenous to the communities of operations, national and
expatriates employees. Information on physically challenged employees is also provided.

Employment data and companies’ policy on gender related issues were requested from sixty-
two (62) covered entities. Fifty-eight (58) companies (93.5%) have gender policies guiding
employment as contained in table below. Appendix 15 provides additional information on
employment.

Table 76: Company Responses on Gender Policies in the Sector

Parameters Response
# %
Responsive Available 58 93.5%
Not Available - -
Work-In-Progress - -
Non-Responsive None 4 6.5%
Total 62 100.0
Source: NEITI 2022-2023 OGA, 2024

A total of thirty-two (32) companies returned populated NEITI Audit template on 2022
employment. Total employment in the sector was 6,728 persons, comprising 5,565 (83%) male,
and 1,163 (17%) females as shown in the table below. Appendix 15 provides additional
information on employment.

Table 77: Total Employment in the Sector

Gender Local National Expatriate Total

Men 4,540 868 157 5,565
Women 1,015 131 17 1,163
Total 5,555 999 174 6,728
Source: NEITI 2022-2023 OGA, 2024

96
Furthermore, table below shows that 6,554 (97%) are Nigerians and 174 (3%) are expatriates.

Table 78: Employment Distribution Based on Nationality and Gender

Nigerian nationals Expatriates Total
Management
Level Local National Total
Male Female Male Female Male Female Total Male Female Total
Top 437 109 44 8 598 42 1 43 523 118 641
% 68.2% 17.0% 6.9% 1.2% 93.3% 6.6% 0.2% 6.7% 81.6% 18.4% 100%

Middle 1,371 339 244 42 1,996 77 8 85 1,692 389 2,081

% 65.9% 16.3% 11.7% 2.0% 95.9% 3.7% 0.4% 4.1% 81.3% 18.7% 100%
Lower 2,732 567 580 81 3,960 38 8 46 3,350 656 4,006
% 68.2% 14.2% 14.5% 2.0% 98.9% 0.9% 0.2% 1.1% 83.6% 16.4% 100%
Total 4,540 1,015 868 131 6,554 157 17 174 5,565 1,163 6,728
% 67% 15% 13% 2% 97% 2% 0% 3% 83% 17% 100%
Source: NEITI 2022-2023 OGA, 2024

8.5. Environmental Impact of the Industry Activities

The NOSDRA report on activities on environmental incidence management in the upstream
segment of the oil sector in Nigeria as shown in the table below.

Table 79: Environmental Incidence Management

Description #

Incidence 1,123
Joint Investigation of incidence 1,045
Barrels of Oil Spillage 50,700.86
Number of reporting entities 29
Source: NEITI 2022-2023 OGA, 2024

97
CHAPTER 9
Outcomes and Impact
The outcomes and impacts discussed in this report reflect updates on the remedial actions taken
following the 2023 Nigeria EITI validation assessment. Additionally, it examines the status of
implementation of past recommendations from the NEITI 2021 Oil and Gas Industry Report.
This process involves the aggregation of recurring issues, culminating in recommendations in
the current audit report. Newly identified and non-recurring issues are categorized under the
subsection dedicated to observations, findings, and recommendations from the 2022 Oil and
Gas Report.

9.1. Updates on Past Recommendations from NEITI

2021 Oil and Gas Report
# Key Point IA Follow-up and Comments Further Recommendation

1 Compliance to The Oil and Gas Report In collaboration with the Federal
the NEITI identified non-compliant entities. Ministry of Justice, NEITI should
Reporting To address non-compliance, actively enforce the applicable
requirement covered entities were contacted provisions of the NEITI Act, 2007
at the commencement of the by implementing relevant
2022-2023 NEITI OGA. A sanctions against non-compliant
sensitization workshop was companies. This collaborative
organized which provided effort will ensure that companies
clarifications. Further failing to meet their reporting
engagements continued obligations face legal
throughout the report production consequences.
process.
Additionally, NEITI should
The current exercise covered leverage the NUPRC to enforce
sixty-two (62) companies, compliance through
including Lekoil non-compliant administrative or regulatory tools
companies in 2021. There were provided in the relevant sections
two (2) non-compliant of the Petroleum Industry Act
companies in 2022. (PIA). This collaborative strategy
will ensure that non-compliant
Also, there are several instances entities are held accountable,
of delayed and incomplete ultimately strengthening
submissions noted during the regulatory adherence while
review period. reinforcing transparency and
accountability in the extractive
sector.

98
# Key Point IA Follow-up and Comments Further Recommendation

2 Beneficial The 2022-2023 exercise The NUPRC to expedite the

Ownership required companies to submit update of Beneficial Ownership
information on their ultimate (BO) data disclosed through the
Beneficial Owners (BO), NOGABOR in line with the
aiming to unravel the complex relevant sections of the
structures that obscure the Petroleum Industry Act (PIA).
identity of the owners. These
efforts by the Independent Furthermore, the Commission
Administrator (IA) should ensure the integration of
complemented NEITI's existing the NOGABOR with, eventually
BO disclosure portals, further the web-enabled Comprehensive
promoting transparency and Register of Licenses (the
accountability. equivalent of an updated
Dynamic Acreage Management
In addition, as of the time of System -DAMS used by the
reporting, BO data for only 96 defunct DPR) for the oil and gas
individuals has been disclosed sector.
through the NUPRC BO portal
- NOGABOR, with some
entries still listing company
names instead of individuals—
an anomaly that needs urgent
correction.

3 Production During the current audit, the IA NUPRC and NNPC Limited are
from PSC reviewed the status of non- to encourage Financial and
Blocks operational Production Sharing Technical Service Agreement
Contract (PSC) blocks and (FTSA) as part of the investment
other idle blocks that were instrumentations to jumpstart
highlighted in the 2021 oil and full and timely implementation
gas report. In addition, the of approved FDP in line with the
NUPRC has initiated bidding Climate Change Act, 2021 and
rounds for some blocks under Energy Transition Plans.
the marginal field production
arrangement. Furthermore, NNPC Limited,
through the proper consultation
with Bureau of Public
Enterprises (BPE) and the
Infrastructure Concessioning
Regulatory Commission
(ICRC), should mobilize
investment for the development
of oil and gas assets.

99
# Key Point IA Follow-up and Comments Further Recommendation

4 Nigeria-Sao IA observed absence of The Federal Government should

Tome and exploration and production review the operational
Principe Joint activities at the Joint framework of the JDA to
Development Development Zone (JDZ). enhance operational efficiency
Authority (JDA) and consider reallocating
The identified key challenge is licenses or blocks to investors
the non-responsiveness and who are ready, willing, and able.
willingness of license holders to Additionally, the NUPRC
invest in the allocated licenses. should focus on providing
institutional capacity building
and support to attract investors
for the operationalization of the
JDZ, ensuring optimal returns on
investment.

5 Crude losses In 2022, Crude oil loss was Federal Government through the
36.693 million barrels which NUPRC should consider viable
was 22.46% of the total metered Public-Private Partnership (PPP)
production at the flow station arrangement on the deployment of
(163.384 million barrels) for the advanced digital solution on the
affected companies and crude monetization of savings from
type. The losses result from crude losses.
11.246 million barrels
measurement error (6.9%), Also set up a special funds and a
21.145 million barrels theft and standby committee on crude loss
sabotage (12.9%) and 4.302 prevention and security of oil and
million barrels production/ gas assets for a more coordinated
terminal adjustment (2.6%). responses and intervention.

The report underscores the

Federal Government's strategic
initiatives, particularly through
the Nigerian Upstream
Petroleum Regulatory
Commission (NUPRC), in
advancing the Host
Communities Development
Trust (HCDT). This initiative is
designed to empower host
communities by integrating them
into a grassroots framework that
fortifies the protection of oil and
gas assets.

100
# Key Point IA Follow-up and Comments Further Recommendation

By fostering local involvement

and ensuring that communities
benefit from the resources within
their vicinity, the HCDT aims to
enhance both the social and
economic fabric of these areas,
thereby mitigating conflicts and
promoting sustainable
development.

Furthermore, the underlisted

efforts aimed at strengthening
surveillance of the oil assets
across the entire upstream value
chain are deployed and under
consideration by the government.
• Advocacy by the CSO,
media and the government.
• Private sector led PPP
proposals to deploy
Integrated Revenue
Assurance Solutions (IRAS)
with pipeline security
surveillance using satellite
imagery and other
sophisticated ICT tools to
ensure near real-time
monitoring, reporting and
processing of incidences of
crude oil theft and sabotage.

6 Quasi-Fiscal NNPCL have been subrogated The NEITI should request and
Expenditure by Section 54 of the PIA that obtain detailed explanations
(QFE) created the NNPC Limited. from the Federal Ministry of
Finance and the Budget Office of
There is no express provision in the Federation regarding the
the PIA as to whether NNPC budgeting process for the
Limited should submit its Nigerian National Petroleum
budget to the NASS scrutiny. Corporation (NNPC) Limited,
considering its status as a
By implication, no clarity on company governed by the
the interpretation of quasi-fiscal Companies and Allied Matters
expenditures. Act (CAMA).

101
# Key Point IA Follow-up and Comments Further Recommendation

Quasi-Fiscal Expenditure and Additionally, NEITI should

deductions from FAAC by advocate for similar
NNPCL was N12.425 billion on clarifications to be incorporated
pipeline security and into updates of the Petroleum
maintenance from January to Industry Act (PIA). This will
June 2022 ( 2 0 2 1 : US$6.931 ensure transparency and
billion/ N2.651 trillion). consistency in how SOEs like
Furthermore, PMS under NNPC Limited are integrated
recovery/ price differentials of into national fiscal frameworks
N4.71 trillion in 2022 and and regulatory updates.
N3.01 trillion in 2023.

These expenditures were

undertaken by State-Owned
Enterprises on behalf of the
Federation but were executed
outside the framework of the
national budget.

7 Outstanding Total liabilities from the sector The Report advocates for NEITI
Liabilities payable are US$ 6.175 billion to encourage Revenue
to FIRS and comprising US$6.072 billion Generating Agencies (RGA) to
NUPRC and N66.378 billion (equivalent consider involving the Federal
of US$ 102. 765) owed to the Ministry of Justice to address
NUPRC and the FIRS. The perpetual debt situations and
liabilities for the 2021 NEITI payments made into RGA
extractive reporting was US$ collection accounts. This
8.264 billion. collaboration will provide a
comprehensive understanding of
At the time of reporting, there the legal implications
was no evidence of a surrounding perpetual debts,
comprehensive investigation ensuring adherence to relevant
into the timeliness of liability legal frameworks.
payments.
Integrating insights from the
This lack of scrutiny raises Ministry of Justice will help
concerns about whether develop policies to effectively
payments are being made address challenges associated
promptly and in accordance with these debts and establish
with regulatory and contractual clear guidelines for managing
obligations. A detailed payments. Additionally, this
investigation could provide partnership can strengthen the
insights into potential delays or enforcement of legal measures
inefficiencies and help ensure related to debt recovery,
that financial responsibilities safeguarding the Federations
are met in a timely manner. interests.

102
# Key Point IA Follow-up and Comments Further Recommendation

8 NDDC levies As part of the reporting process, The NEITI should formally
the IA reviewed the Economic update the Presidency on the
and Financial Crimes urgency of expediting the
Commission's (EFCC) recovery reconciliation of recoveries
of unpaid levies owed to the made by the Economic and
Niger Delta Development Financial Crimes Commission
Commission (NDDC) from (EFCC) on behalf of the Niger
previous periods. The audit Delta Development Commission
highlighted the need for a (NDDC). This process should be
reconciliation of the recoveries coordinated through the Office
made by the EFCC. This of the Attorney-General of the
reconciliation would serve to Federation and Minister of
accurately determine any Justice.
outstanding levies and ensure
that the recoveries are properly
aligned with the NDDC's
financial records.
The IA reviewed the disclosure
9 Pre-export of NNPC Limited’s fiscal NNPC Limited should ensure
financing and commitments, loans, comprehensive disclosure of all
Project guarantees, and contingent fiscal obligations, including the
Eagle liabilities from the 2021 monthly, quarterly, and annual
reporting period. accumulation and repayment of
During this review, the IA also these obligations, on its official
took note of an audit website. This is in line with its
commissioned by the Federal commitment as a supporting
Ministry of Finance to examine company of the Extractive
PMS subsidy-related financial Industries Transparency
transactions between NNPCL Initiative (EITI) and as a State-
and the Federation, which had Owned Enterprise (SOE)
the goal of determining all operating in an EITI-
associated liabilities. implementing country.

The examination revealed that

while some disclosures have
been made in NNPC’s audited
annual financial statements,
they lack sufficient detail. This
gap in transparency underscores
the need for more
comprehensive reporting to
ensure clarity regarding the full
extent of NNPC’s financial
obligations, particularly in
relation to PMS subsidies and
contingent liabilities.

103
# Key Point IA Follow-up and Comments Further Recommendation

10 NLNG Payments The IA examined the payments The NNPC Limited should
from the NLNG company ensure continuous accountability
received by NNPCL, which of NLNG payments received on
were subsequently transferred behalf the government.
to designated NLNG accounts.
The audit found that dividends
and interest earned by the
Federation for the years 2022
and 2023 totaling US$ 1.113
billion and US$ 849.314
million were paid, contrasting
with the US$722.60 million
payment made in 2021.

The report confirms the

payments from NLNG in the
current period, ensuring that the
financial obligations of NLNG
to the Federation were met
without undue delays.

11 Transportation Transportation revenue was US$ Although Joint Venture (JV)

revenue 51.822 million in 2022 (2021: assets were subrogated to NNPC
US$194.85 million and N9.73 Limited starting in July 2022,
billion). there remains, for part of the
review period, a critical need for
Prior to PIA implementation, full disclosure of the tariff rates
NNPC still did not disclose that operators charge for the use
tariff rate and volumes with of JV pipelines. These tariff rates
respect to what was paid to are crucial as they determine the
NNPC by the JV operators amounts remitted to NNPC,
received on behalf of the which holds partial ownership of
Federation. these assets.

However, since the Transparent reporting of these

implantation of the PIA, JV rates is essential for
assets have been subrogated to accountability and to ensure that
NNPC Limited. the revenues generated align
with NNPC’s share of the JV
assets, thereby supporting
accurate financial reporting.

104
# Key Point IA Follow-up and Comments Further Recommendation

The report recommends a joint

audit by the Revenue
Mobilization Allocation and
Fiscal Commission (RMAFC),
Ministry of Justice, Ministry of
Finance, and the Ministry of
Petroleum Resources that will
focus on income-generating
assets of NNPC pre-PIA, and
NNPCL post-PIA to verify that
revenues are maximized and
accurately reported, thereby
enhancing fiscal accountability
and efficiency.

12 Miscellaneous The report reviewed NNPC Limited should provide

revenue miscellaneous revenue figures, a detailed breakdown of
which were US$4.279 million miscellaneous revenue sources
in 2022. This contrasts with and align reporting practices
the figures for 2021, which with international standards,
were US$702.19 million and such as IFRS, to ensure
N343.56 million. transparency and
comparability.
The report finds that the basis Comprehensive disclosure in
for the miscellaneous revenue financial statements, including
disclosed by NNPC Limited explanatory notes, will enhance
remains unclear. This lack of clarity and stakeholder trust.
clarity is concerning, as it does
not align with international best
practices typically observed in
the oil and gas sector. Improved
transparency and adherence to
established practices are needed
to ensure that miscellaneous
revenues are accurately
reported and understood.

105
# Key Point IA Follow-up and Comments Further Recommendation

13 Revenue from There were no indications of NEITI should advocate for the
trial marketing Trial marketing period in 2022. Revenue Mobilization
period Allocation and Fiscal
The IA examined revenue from Commission (RMAFC),
TMP for 2021: US$278.813 Ministry of Justice, Ministry of
million earned from First E&P Finance, and Ministry of
JV by the Federation but not Petroleum Resources to conduct
swept to the Federation. a comprehensive forensic audit
that will focus on income-
NNPC could not confirm that generating assets of NNPC pre-
the funds went into the PIA, and NNPCL post-PIA to
Federations account. verify that revenues are
maximized and accurately
reported, thereby enhancing
fiscal accountability and
efficiency.
Revenue Mobilization
14 Revenue from IA examined the crude lifted Allocation and Fiscal
OML 116 from OML 116 operated by Commission (RMAFC),
NEPL (formerly operated by Ministry of Justice, Ministry of
AENR under service contract). Finance and Ministry of
Petroleum Resources should
The IA determines that NNPCL carry out a detailed post-mortem
could not demonstrate that valuation of Federation assets
US$7.61 million from OML subrogated to NNPC Limited at
116 was transferred to the PIA implementation to
Federation account before determine the good and valuable
NNPC Limited subrogation. consideration due to the
Federation.

15 Cash call The IA post examination of == same as above==

cash call payments
. determines that NNPCL could
not demonstrate that NUIMS
has o f f s e t t h e reconciled
position of the total cash call
paid to Newcross on behalf of
NEPL before NNPC Limited
subrogation.

Paid to for Newcross Cash

Call were 2022: US$63.150
million (2021: N11.470
billion and US$29.218
million) on assets transferred
to NPDC since 2019.

106
# Key Point IA Follow-up and Comments Further Recommendation

16 Update on As of the time of publishing this The NEITI to encourage the

Refineries report, none of the four (4) NNPC Limited, in consultation
Activities government owned refineries with Bureau of Public
were in operation. Enterprises (BPE) and the
Infrastructure Concessioning
The Report states that no Regulatory Commission (ICRC)
information was provided by to concession the refineries to
NNPCL regarding refinery private investors to the benefit of
rehabilitation cost by NNPCL the nation.
for the year 2022. Note that for
the years 2020 and 2021: N200
billion naira was expended on
the refineries.

17 Deductions from IA examined domestic crude Revenue Mobilization

the Federation sales deductions which are as Allocation and Fiscal
crude sales reported in FAAC reports. Commission (RMAFC),
proceeds Ministry of Justice, Ministry of
Under recovery/ price Finance and Ministry of
differentials accounted for Petroleum Resources should
N3.01 trillion i n 2 0 2 2 carry out further review of past
(2021: N1.16 trillion), deduction and provide budgetary
Pipeline repairs accounted for guidance and compliance
January to June 2022 charged to accordingly.
FAAC was N12.425 billion
(2021: N22.05 billion).

18 Conversion of The IA examined the Revenue Mobilization

FIRS tax oil and conversion of FIRS tax oil and Allocation and Fiscal
NUPRC royalty NUPRC royalty oil for the Commission (RMAFC),
oil to DSDP Direct Sale of Crude Oil and Ministry of Justice, Ministry of
. Purchase (DSDP) arrangement. Finance and Ministry of
The audit confirms that this Petroleum Resources should
arrangement persisted into the carry out a review of the entire
current period and domestic process of converting FIRS tax
sales are still done at 90 days. oil and NUPRC royalty oil to
DSDP and provide documentary
guidance.

107
# Key Point IA Follow-up and Comments Further Recommendation

Ordinarily, export revenues

should be paid in US dollars
into the JP Morgan account,
aggregated for the Federation,
and remitted within 30 days to
the Federation account at the
Central Bank of Nigeria (CBN)
in US dollars. However, these
sales were classified under
Direct Sale of Crude Oil and
Purchase (DSDP)
arrangements, resulting in
remittances being made within
90 days in Naira to the
Federation account at the CBN.
This practice allowed NNPCL
to benefit from fluctuations in
foreign exchange rates.

19 Outstanding The report established that there NEITI should advocate for RGA
liabilities on was no indication that NNPCL to intensify efforts to recover
PSC Taxes and made substantial commitments debt.
Royalty Oil toward settling its outstanding
obligations to the (FIRS and the
NUPRC in 2022.

20 Revenue from Escravos gas to liquid (EGTL) were Revenue Mobilization

EGTL aggregated into gas natural gas Allocation and Fiscal
transactions liquids of US$701.287 million in Commission (RMAFC),
2022 (2021: US$242.05 million Ministry of Justice, Ministry of
included in export gas sales of Finance and Ministry of
US$414,23 million, US $20.22 Petroleum Resources should
million was received into the CNL conduct forensic audit on all
proceed account with a balance of income generating assets of the
US$221.82 million). NNPC Limited to ensure optimal
revenue generation, as this forms
IA further examined the NNPC the basis of determining
Limited responses that 8% of gross dividend declaration.
revenue is payable as price
balance per contract agreement
a n d t h e revenues are from an
SPV project in partnership with
Chevron. The IA could not analyze
the Bank statement for the SPV as it
was not presented by NNPC
Limited.

108
# Key Point IA Follow-up and Comments Further Recommendation

21 Non-cash call IA examined the practices of == same as above==

payment NNPC ltd funding assets
transferred to NEPL (prior to
PIA implementation) from the
Federation cash call account.
NNPC could not demonstrate
that NUIMS o f f s e t t h e
reconciled position of the total
cash call paid to Panocean JV
and others on behalf of NEPL
before NNPC Limited
subrogation.
Furthermore, the IA agrees with
earlier recommendations
concerning license revocation
or transfer as outlined below:
• Disclosure of Terms:
Details of the revoked
license, including
associated liabilities and
payables, should be shared
with the Revenue
Mobilization Allocation
and Fiscal Commission and
NEITI, and be disclosed on
the NUPRC website
ensuring the transparency of
financial and operational
implications.
• Liability Assignment:
NUPRC should ensure that
all operational and ancillary
liabilities are thoroughly
established and assigned to
the responsible parties
during the revocation
process. This step is crucial
for accurately managing
and transferring
responsibilities and
minimizing potential
disputes or financial risks.

109
# Key Point IA Follow-up and Comments Further Recommendation

22 NNPCL records IA examines data management The report recommends that

Vs NAPIMS process and establishment of NNPC should improve data
AFS controls to prevent discrepancy. management processes and
establish controls to prevent
. It was observed that NNPC future discrepancies.
limited is yet to address data
synchronisation issues. NNPC should ensure regular
monitoring, and data
There were disparities in the reconciliation to mitigate
internal records within the recurrence of discrepancies
NNPCL business units. among NNPC Limited business
units.

23 13% Derivation The IA examined the previous Revenue Mobilization

recommendation advising the Allocation and Fiscal
Revenue Mobilization Commission (RMAFC) and
Allocation and Fiscal Ministry of Justice to provide
Commission (RMAFC) and the documentary guidance on the
Office of the Accountant intent of Section 162(2) of the
General of the Federation constitution of the Federal
(OAGF) to discontinue Republic of Nigeria on the 13%
computing the 13% derivation derivation.
based on the balance of revenue
after deductions.

The 2021 report had advocated

that the 13% derivation should
be calculated on total
collections for the relevant
period, in line with Section
162(2) of the Constitution of the
Federal Republic of Nigeria.

The current report confirms that

the incorrect practice has been
discontinued in the current
reporting period, ensuring
compliance with constitutional
requirements.

110
# Key Point IA Follow-up and Comments Further Recommendation

24 Environment IA examined the The Federal Ministry of Justice

Regulations recommendation on the need to should provide comprehensive
have clear delineation of roles in documentary guidance to support
the administration of the harmonization and application
environment regulations to of environmental regulations.
avoid potential conflicts This guidance should outline
between the regulatory standardized procedures and legal
agencies. frameworks to ensure consistent
• Gas flaring (Gas facilities enforcement and compliance
set-up or gas flaring for across different jurisdictions and
testing or operational sectors. Such documentation will
reasons) – There should be facilitate better coordination
a specified limit in the among regulatory bodies and
contract that is allowable for stakeholders, enhancing the
facility set-up for gas effectiveness of environmental
flaring. This is expected to protection efforts.
reduce the harm to the
environment.
• Environmental Remediation
Fund – The administration
of the fund should be vested
in NUPRC.

The procedure for assessing

compensation for environmental
damage should be clearly
documented and put in a public
repository.

NB: There is an overlapping of

regulatory powers between the
enforcement agencies on
environmental issues that is
NUPRC, NMDPRA, Oil and
Gas Division of the Federal
Ministry of Environment
(FMOE). This could offer
companies that pollute the
environment to take advantage
and choose the regulator to
obey. A l l MDA’s process and
or rules should be streamlined
and not overlapping.

111
# Key Point IA Follow-up and Comments Further Recommendation

25 NEITI Audit IA examined the coordination It is recommended that NEITI

Remediation: of remediation matters from should intensify remediation
previous NEITI audit Report actions amongst stakeholders
and observed the following: through its newly created
• NEITI has created a Remediation Unit and the IMTT.
Remediation Unit as an
internal organ responsible
for coordinating all the
remediation actions.
• The Remediation Unit re-
created the Inter-Ministerial
Task Team (IMTT) to drive
implementation across
relevant Ministries,
Departments and Agencies
(MDA).

26 Issues related to The IA examined thorny issues The report recommends that the
PIA. regarding the PIA as outlined Federal Ministry of Justice
below: provide documentary guidance
• Section 64(m) of the to harmonize and clarify
Petroleum Industry Act aggregated issues within the
(PIA) contains ambiguity Petroleum Industry Act (PIA).
regarding the allocation of Specifically, there is a need for
30% for both the clarification on the following:
management fee and the • Contribution to
Frontier Exploration Fund Environmental Funds: The
(FEF). The PIA lacks procedures for contributing
precise definitions for key to the Midstream and
terms such as "profit oil" Downstream Environmental
and "management fee," Funds.
which may lead to • Utilization of Penalties and
uncertainty in interpreting Payments: The handling of
how these allocations flare gas penalties and flare
should be applied. gas payments.
• Regarding the provisions
for deductions from profit
oil in Section 64(c) and
Section 9(4) of the
Petroleum Industry Act
(PIA), clarity is needed on
the retention allocations.

112
# Key Point IA Follow-up and Comments Further Recommendation
If the intention is to
establish a single 30% Additionally, in accordance with
retention that covers both the PIA, 2021, which mandates
the management fee and the the Minister of Petroleum and
Frontier Exploration Fund the Minister of Finance to
(FEF), the wording should identify and transfer assets,
be rephrased to explicitly interests, and liabilities from
reflect this. Alternatively, if NNPC to NNPCL within 18
separate 30% retentions are months of the PIA's effective
intended for each date, a detailed post-mortem
allocation, the language valuation of Federation assets
should be revised to clearly transferred to NNPC Limited
delineate these distinct should be conducted. This
provisions. Ensuring valuation will determine the
precise wording will appropriate goods and valuable
prevent misunderstandings considerations owed to the
and facilitate accurate Federation.
implementation of the
provisions.

27 Award of The IA examined the NUPRC should adhere strictly to

Marginal Field Regulations on the bidding all regulations and, if any waivers
process which requires payment or exemptions are granted, they
of signature bonus prior to the should publicly disclose these
award of contract by all exceptions to ensure transparency
successful applicants named in and accountability in its practices.
the Notice of Preferred Bidder
Status. The IA confirms that
bidding guidelines were
published in adherence to the
provisions of the regulation.
• Independent Audits: The
28 Discrepancy in The report established that NMDPRA should conduct
PMS discrepancies persist between continuous ante-mortem
importation the records of NNPC Limited independent and third-party
between NNPC and the NMDPRA. This issue is audits of imported petroleum
and NMDPRA currently under review in an quantities and landing costs at
. audit commissioned by the the point of discharge. These
government through the Federal audits should also advise the
Ministry of Finance, which is Debt Management Office
focused on examining price (DMO) on price differentials
differentials for Premium and under-recovery claims of
Motor Spirit (PMS) to verify NNPC Limited, similar to
NNPC Limited's claims. practices followed during the
operation of the defunct
PPPRA.

113
# Key Point IA Follow-up and Comments Further Recommendation
• Real-Time Data Aggregation:
In the first instance, NMDPRA NMDPRA should implement
records shows 3.29 billion litres mechanisms for near real-time
of PMS importation for NNPC tracking of petroleum product
Limited while NNPC Limited consumption nationwide. This
record showed 6.30 billion initiative should align with the
litres for product importation in relevant sections of the PIA.
2022. A variance of 3.01 billion • Discontinue misclassification:
litres (92%). The practice of classifying
petroleum products at the
In another instance, NNPC Ltd point of discharge as
valuation record shows PMS consumption should be
importation of 22.93 billion discontinued. And further
litres valued at N7.39 trillion in intentional efforts should be
2022. instituted to track and report
actual consumption.

29 Potential loss of The IA observed no significant • Implement Outstanding

revenue to the implementation of several Recommendations: The
Federation upon the recommendations from the relevant authorities should
Implementation of 2021 oil and gas sector report, promptly address the
PIA including: unimplemented
• Enhanced Revenue recommendations from the
Forecasting: There has been 2021 oil and gas sector
no substantial progress in report, including enhancing
improving revenue revenue forecasting through
forecasting through asset-based budgeting,
comprehensive asset-based reviewing policy trade-offs,
budgeting. and instituting regular
• Policy Trade-offs Review: review and adjustment
The review of policy trade- processes.
offs remains inadequately This will provide a solid
addressed. foundation for future
• Regular Review and assessments and improve
Adjustment: There has been overall sector management.
a lack of effective • Develop and Enforce
implementation of regular Optimization Strategies: The
review and adjustment government should prioritize
processes. the development of an
optimization strategy for
The strategy was expected to Environmental Fund
include robust oversight and Allocation, incorporating
transparent fund management robust oversight and
mechanisms through the transparent fund
NMDPRA in collaboration management mechanisms
with relevant stakeholders. through the NMDPRA.

114
 # Key Point IA Follow-up and Comments Further Recommendation

There has also been no Additionally, there should be a

significant progress in clear alignment of the functions
revisiting the functions of the of the Niger Delta Development
Niger Delta Development Commission (NDDC) with the
Commission (NDDC) to align host community development
them with the host community funds established by the PIA to
development funds established ensure efficient use of resources
by the PIA. Clearly defined and reduce operational costs.
roles and responsibilities for
each institution are essential
for reducing operational costs
and increasing effectiveness.

Given that the focus of the

2022-2023 NEITI Oil and Gas
Report is on assessing the
impact of the PIA on domestic
resource mobilization and
considering that previous
recommendations which
would have informed this
assessment remain
unimplemented, the IA
concludes that a
comprehensive assessment is
not feasible at this time.

9.2. Observations, Finding and Recommendations

The 2022 report identified non-reoccurring issues are aggregated under the subheadings titled
- observation, findings and recommendations of the 2022 oil and gas report as shown in the
table below.

115
Table 80: Observations and Recommendations for 2022-2023 Extractive Reporting

# Observations/ Findings Implications Responsibility Entity’s Response Recommendations

National Grid System for
1 Acreage Management: Non-compliance with sections 69 NUPRC/ The Commission is NUPRC and other
The National Grid Systems is (1-7) Part 11- Administration of National yet to be publicly stakeholders to accelerate
expected to have addressed the Upstream Petroleum Operations Security disclosed on the deployment of a
following: and Environment of the PIA, Adviser website considering National Grid System for
• Define license and lease 2021 (NSA)/ that the project is the administration and
areas Impact: Surveyor- work-in-progress. safeguards of the upstream
• Identified relinquished Rating: Non-Compliance General/ However, the petroleum operations and
assets. Interpretation: Not Favourable Ministry of Surveyor-General assets.
• Identification of well Priority: Petroleum approval to convert
locations High and immediately Resources (Oil to UTM has been
• Petroleum conservation and Gas) secured.
measures.

NUPRC to establish and

2 Upstream Register of Non-compliance with sections NUPRC and Concession make publicly available
License: 219, 222, 223, 224 of the PIA, Ministry of situation report is comprehensive register
It was observed that NUPRC 2021. Petroleum operational and on incorporating the following:
have not publicly disclosed Impact: Resources (Oil the Commission’s • Leases, licenses,
Register of Licenses. Rating: Non-Compliance and Gas) website. permits and
Interpretation: Not Favourable authorization issued,
Priority: revoked, suspended,
High and immediately surrendered or
withdrawn with any
modification or
exemptions granted.

116
# Observations/ Findings Implications Responsibility Entity’s Response Recommendations
• Extension, transfer,
The examined publicly See surrender and
accessible document titled https://www.nuprc. revocation.
“Concession Situation” do not gov.ng/. However, • Exemption and
meet the requirement of an the portal is being relinquishment
online License Register as it upgraded to a • Change of address and
does not contain comprehensive Dynamic Acreage name
information about the owners of Management • Other matter affecting
licenses, the coordinates and System the status of interest.
updated production (DAMS) • Description of the rights
arrangement (contract type) vested in the person(s)
information. named as the holder.
• Conditions and other
provisions the holder is
subjected to.
• Public accessibility
during designated hours
and days
• Electronically up to date
Non-compliance with sections NUPRC and stakeholders
3 Decommissioning and 232 and 233 of the PIA, 2021. NUPRC, CBN, Inactive account are to accelerate the
Abandonment Fund Impact: Ministry of with CBN. implementation of the
Rating: Non-Compliance Finance, and Engagement is relevant sections in the PIA
Non-activation of the Fund over Interpretation: Not Favourable Ministry of ongoing with to set up Decommissioning
three (3) years after the PIA, Priority: Petroleum License and Lease and Abandonment Fund.
2021. High and immediately Resources (Oil Operators
and Gas)

117
# Observations/ Findings Implications Responsibility Entity’s Response Recommendations
The Fund and accompanying It should be set up not later
Decommissioning and than three (3) months from
Abandonment Plan (DAP) is the date of commencement
instrumental to the addressing of production in the case of
Climate Change through cash new licences or leases, or
provisioning for future impact one year from the effective
of the sectors activities on the date of the Regulations for
environment. existing licenses or leases of
a producing field.

Furthermore, operators are

to notify the Commission
not later than 14 days from
the date of establishment of
the fund.
Non-compliance with section
4 Upstream Environmental 103 of the Petroleum Industry NUPRC, CBN, The regulation on
Remediation Fund: Act, 2021. Ministry of Upstream NUPRC is to ensure that the
Non-activation of financial Impact: Finance, and Environmental Upstream Environmental
contribution to the Fund and Rating: Non-Compliance Ministry of Remediation Fund Remediation Fund
related activities in line with the Interpretation: Not Favourable Petroleum in still in the draft Regulations as prescribed
PIA. This is to finance Priority: Resources (Oil stage and yet to be under section 103 of the
rehabilitation and manage High and immediately and Gas) gazette. PIA, 2021 is gazetted to
negative environmental impacts demonstrate institutional
from petroleum operations (i.e. readiness to mitigating the
upstream petroleum operations effect of climate change.
and petroleum operations under
section 8(g) of the Petroleum
Industry Act, 2021).

118
# Observations/ Findings Implications Responsibility Entity’s Response Recommendations

The Upstream Environmental

Remediation Fund is
instrumental to mitigating the
effect of Climate Change
arising from the activities in the
sector.
Crude Oil and Gas • Non-inclusion of an up-to-
5 Production, Lifting and date production arrangement/ NUPRC NUPRC should ensure:
utilisation: The following were contract type to companies • Production
observed from the NUPRC demonstrates non- arrangement/ contract
Records: compliance with sections types are up-to-date and
• Inclusion of un-updated 219, 222, 223, 224 of the included in all
production arrangement for PIA, 2021 on register of production and lifting
each operating company. licenses. records for ease of
• Reporting non- • Reporting non-disaggregated tracking, determination
disaggregated crude lifting lifting volumes for of interest, and
volumes for companies with companies with different reconciliation.
different production contract type/ production • Report disaggregated
arrangement/ contract type. arrangements leads to lifting volumes for
For example: difficulty in tracing and companies with
✓ Mobil Producing reconciling lifting volumes as different contract types/
Nigeria Unlimited with experienced during the 2022- production
JV contract type is 2023 NEITI tripartite arrangement.
comingled with PSC reconciliation meeting. • Updating production
contract type of Messer data with companies
Esso E&P Nigeria Ltd signed-off reports of
(ERHA) and Esso E&P curtailment meetings.
Nigeria Ltd (USAN)

119
# Observations/ Findings Implications Responsibility Entity’s Response Recommendations
✓ Shell Nigeria • Availability of
Exploration Production • Non-updating the production comprehensive signed-
Company with PSC records with companies off reports for gas
contract type is signed-off leads to mismatch production and
comingled with Shell of production records utilisation at curtailment
Production country-wide and which meetings and update the
Development Company impairs the integrity of the gas production and
(JV contract type). NURPRC data. utilisation record.
• Non-updating of • Non-availability of
production records with the comprehensive signed-off
companies signed off reports for gas production
during curtailment and utilisation impairs the
meetings. integrity of the gas
• Non- availability of production and utilisation
comprehensive signed-off records.
reports for gas production Impact:
and utilisation as it were for Rating: Non-Compliance
crude. Interpretation: Not Favourable
Priority:
High and immediately

120
# Observations/ Findings Implications Responsibility Entity’s Response Recommendations
NUPRC Revenue Reporting: • Payment into non-designated NUPRC to ensure:
6 The following were observed: revenue collection account NUPRC • Ensure that each bank
• Payment by companies into result distorts end-to-end statement is reconciled
NUPRC revenue collection tracking and reporting of the to show the name of
account not designated for revenue type. Also, it results payee, name of the
the revenue type, making a in reconciliation challenge. ultimate beneficiary,
bulk payment for royalty, • Non-availability of signed- purpose of payment to
concession rent and gas off reports for liabilities may ease future
flare into the royalty result to financial risk reconciliation.
account. s considering lack of basis • Set up a practice of
• Non- availability of acknowledging the liabilities issuing a service notice/
comprehensive signed-off in the event of litigation. demand note to all
reports for liabilities. Impact: companies with
Rating: Partial Compliance outstanding liabilities,
Interpretation: Tolerance quarterly and annually.
Priority:
Medium but immediately
Midstream and Downstream Non-compliance with sections NMDPRA and stakeholders
7 Register of License: 219, 222, and 224 of the PIA, NMDPRA and should make publicly
It was observed that NMDPRA 2021. Ministry of available, a comprehensive
have not publicly disclosed Impact: Petroleum register incorporating the
Register of Licenses and Rating: Non-Compliance Resources (Oil following:
awardees in line with section Interpretation: Not Favourable and Gas) • Leases, licenses,
219, 222 and 224 of the PIA, Priority: permits and
2021. High and immediately authorization issued,
revoked, suspended,
surrendered or
withdrawn.

121
# Observations/ Findings Implications Responsibility Entity’s Response Recommendations
Also, section 32 (x) requires • Extension, transfer,
NMDPRA to establish public surrender and
and non-public registries in revocation.
respect of issued licenses, • Exemption and
permits and authorizations. relinquishment
• Change of address and
name
• Other matter affecting
the status of interest.
• Description of the rights
vested in the person(s)
named as the holder.
• Conditions and other
provisions the holder is
subjected to.
• Public accessibility
during designated hours
and days
• Electronically up to date
Framework for pricing and Non-compliance with sections 31 NMDPRA and stakeholders
8 tariff: (L), 122 and 123 of the PIA. NMDPRA and should accelerate actions to
It was observed that NMDPRA Impact: Ministry of deploy frameworks for
have not publicly disclosed the Rating: Non-Compliance Petroleum pricing and tariff for all
pricing and tariff for natural gas Interpretation: Not Favourable Resources (Oil petroleum products in the
in midstream and downstream Priority: and Gas) midstream and downstream
gas operation and petroleum High and immediately in line with the relevant
products in line with relevant sections of PIA, 2021.
sections of the PIA, 2021.

122
# Observations/ Findings Implications Responsibility Entity’s Response Recommendations

Section 31 (L) requires that Pricing frameworks to

NMDPRA is to develop and includes refinery
enforce a framework on tariff operations, and gas
and pricing for natural gas and processing, marketing, and
petroleum products. distribution.

Section 122 (1) requires

NMDPRA to design pricing
framework for transportation,
distribution and processing of
petroleum on a cost-reflective
basis.

Section 123 (1) tariffs charged

by licensees for the use of any
facility or infrastructure
licensed by the authority for use
in midstream and downstream
petroleum operations shall be
set according to one or more
tariff methodologies adopted by
the Authority for a particular set
of licenses in conformity with
the applicable fiscal regime.

123
# Observations/ Findings Implications Responsibility Entity’s Response Recommendations
Cases of Petroleum Products Non-compliance with sections 32 NMDPRA and stakeholders
9 Losses arising from Pipeline (gg) (mm) and 33 (q) of the PIA, NMDPRA and should accelerate actions to
breaks, theft and sabotage: 2021. Ministry of deploy a database and
It was observed that there is no Impact: Petroleum platform for aggregating
institutionalized industry-wide Rating: Non-Compliance Resources (Oil cases of petroleum products
control mechanism to aggregate Interpretation: Not Favourable and Gas) losses that could disrupt
the incidence of petroleum Priority: optimal availability of
product losses arising from High and immediately petroleum products.
pipeline breaks, theft and
sabotage in line with sections
32 (gg), (mm), and 33 (q).
Section 32 (gg) requires
NMDPRA to keep and classify
records, data and reports as may
be prescribed in regulations or
guidelines.
Section 32 (mm) requires
NMDPRA to develop, maintain
and publish a database of
midstream and downstream
petroleum operations.
Section 33 (q) requires that
NMDPRA is to ensure the
continuity and security of the
supply of natural gas, crude oil
and petroleum products to
customers.

124
# Observations/ Findings Implications Responsibility Entity’s Response Recommendations
Product Importation Non-compliance with sections 31
10 Valuation: (L), and 122 of the PIA, 2021. NNPC NMDPRA and NNPC
It was observed that NNPC Impact: Limited, Limited should collaborate
Limited: Rating: Non-Compliance NMDPRA and to carry out a postmortem
• Petroleum importation Interpretation: Not Favourable Ministry of reconciliation of petroleum
valuations were carried out Priority: Petroleum product importation
by the NNPC Limited upon High and immediately Resources (Oil especially as regards claims
which first-line deductions and Gas) for subsidy/ price
were made including differentials.
subsidy/ price differentials
arising from PMS Furthermore, NNPC
importation. Though in line Limited should discontinue
with section 64 (m). the practice of unilateral
valuation of petroleum
Section 64 (m) requires
products especially if it
NNPC Ltd to be supplier of
relates to product valuation
last resort for security
with potential claims of
reasons and all associated
price differentials/ subsidy
costs shall be for the
from the government in line
account of the Federation.
with Section 64 (m).
• Petroleum importation
volume is in disparity with
NNPC Ltd should align
the record of the NMDPRA.
petroleum products pricing
For instance:
with the pricing framework
✓ 2023: NMDPRA (6.02
established by the
billion litres); NNPC
NMDPRA in line section
Ltd (3.88 billion litres).
122 of the PIA, 2021.

125
# Observations/ Findings Implications Responsibility Entity’s Response Recommendations
✓ 2022: NMDPRA (3.29
billion litres); NNPC
Ltd (6.27 billion litres).

Section 31 (L) requires that

NMDPRA is to develop and
enforce a framework on tariff
and pricing for natural gas and
petroleum products.

Section 122 (1) requires

NMDPRA to design pricing
framework for transportation,
distribution and processing of
petroleum on a cost-reflective
basis.

11 Crude Oil and Gas Difficulty in reconciling internal NNPC Limited NNPC Limited
Production, Lifting and data implies inconsistent data (NUIMS and NNPC Limited is to ensure
utilisation: management NTL) regular internal
It was observed that there are Impact: reconciliation.
challenges on internal data Rating: Partial Compliance
within NNPC Limited and Interpretation: Tolerance
Business Units. Priority:
High and immediately
For example, there was
difficulty in reconciling the
NUIMS lifting record with the
NTL lifting and sales record.

126
# Observations/ Findings Implications Responsibility Entity’s Response Recommendations
NNPCL Revenue Reporting: Non-disaggregation of revenue
12 The following were observed: across owners of crude leads of NNPC Limited NNPC Limited should dis-
• Non-disaggregation of difficulty in reconciliation and aggregate crude oil lifting
revenue with schedules for risk of comingling and abuse. and sales record across
each of the owners of the owners of crude oil and gas
crude oil and gas. Furthermore, it implies non- for more transparency and
Furthermore, not clearly compliance with sections 64 (b) accountability in line with
showing where the funds (c) of the PIA, 2021. sections 64 (b) (c) of the
were transferred end-to- PIA, 2021.
end. Impact:
• Utilisation of PSC Profit oil Rating: Non-Compliance
for NNPC Limited fiscal Interpretation: Not Favourable
loans and commitment. Priority:
Section 64 (b) requires NNPC
Limited to be the High and immediately
concessionaire of all PSC,
Profit Sharing and Risk Service
Contracts as national oil
company on behalf of the
Federation in line with
competencies. Section 64 (c )
requires NNPC Limited to lift
and sell royalty oil and tax oil
on behalf of the Commission
and the Service and shall
promptly remit the proceeds of
the sales of profit oil and gas to
the Federation.

127