AN OVERVIEW

41Oil and Gas companies who recorded $5million or above in financial flow

from extractive activities to beneficiaries in 2014 were audited,

this included 16 government agencies.

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

23

Marginal Field OperatingLicenses (SRMF)

Joint Venture

59

Sole Risk

26

Service Contract

A total of 109 licenses representing 109 producing assets were active in the year. This comprises of 59 Joint Venture (JV) licenses; 26 Sole

Risk and Marginal Field Operating (SRMF) licenses; 23 Production Sharing Contract (PSC) licenses and 1 Service Contract (SC) licenses.

01

AN OVERVIEW(CRUDE OIL LIFTING)

796.55mTotal barrels lifted.

NNPC lifted

350m barrels

from the total barrels lifted for export and domestic

utilization on behalf of the Federation.

Balance was lifted by various contractual

arrangement producers .

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

CRUDE OIL LOSSES

N14.85bn

Crude oil lost in the year amounted to 1.08million barrels.

This was valued

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

-%

GAS PRODUCTION

2.595bscf

Total aggregated volume of gas produced is

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

REVENUE FLOWS

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

$54.55bn

Total revenue flows from oil and gas extractive sector that accrued to all tiers of

government and other subnational recipients in the year was

CASH RECEIPTSFROM THE FEDERATION

$31.63Bn

$31.63bn was transferred to the Federation account, which was

divided amongst the tiers of government based

on revenue allocation formula.

$20.62Bn

A deduction of $20.62bn was made from the receipt for excess gas royalty, crude, oil

royalty, PPT, domesticcrude and JVC crude.

$51.9Bn

A gross total of $51.9 billion was the receipt for oil and

gas in 2014 from the Federation.

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

Joint Venture Contracts(JVC)

Production Sharing Contracts(PSC)

Sole Risks (SR)

Service Contracts (SC)

54%

40%

3%

0.4%

The highest volume of production was by the Joint Venture Contracts (JVC), which recorded a production at 427.71 million bbls representing

54% of the total production. Production Sharing Contracts (PSC) followed closely behind at 40% with 320.20 million bbls of crude oil production and Sole Risks (SR) contracts lagged behind with 3% of the crude oil

production at 27.94 million bbls.The lowest production arrangement at 0.4% of the total production with 3 million barrels is the Service

2013

2014

Crude lifted decreased by

0.5%

from 2013 to 2014.

Production volume decreased by

0.75% from 2013 to 2014.

YEAR-ON-YEAR COMPARISON CRUDE PRODUCTION & LIFTING

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

YEAR-ON-YEAR COMPARISONS

2013 2014

800m 795m Production volume of crude oil

decreased from 800m barrels in 2013 to 795m

barrels in 2014.

Crude lifted decreased in 2014 from 800 million bbls in 2013 to 797

million bbls in 2014 government based on revenue

allocation formula.

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

YEAR-ON-YEAR COMPARISONS

There was also a 5% decline in the gross revenue accrued to the Federation, from

$52.9bn in 2013 to $50.1bn in 2014

($2.8bn decrease)

5%

5%

2013

2013

2014

2014

$58.2bn

$58.2bn

$55.5bn

$55.5bn

There was a 5% decrease

in aggregate financial flow from

$58.2bn in 2013 to $54.55bn in 2014

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

YEAR-ON-YEAR COMPARISONS

2013Domestic Refineries

barrels

Petroleum Products

2.6bn

0.95bn

2014Domestic Refineries

barrels

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

YEAR-ON-YEAR COMPARISONS

2013Imported

Petroleum Productsbarrels

Petroleum Products

22bn

2014Imported

Petroleum Products

barrels

barrels20bn

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

YEAR-ON-YEAR COMPARISONS

Processed Subsidy

Cash Payments On subsidy

N1.3tn

N1.2tn

2013

N482bn2014

2014

N495bn2013

YEAR-ON-YEAR COMPARISONSUBSIDY PAYMENTS

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

N426.6 billion was distributed in 2014 via the Subsidy Re-investment Programme (Sure-p). (This was the same

amount distributed in 2013).

DOMESTIC CRUDE SALES

Receipts

N1.36 trillion

+ ++ +Deduction

N0.83 trillion

Unreconciled balance

N0.25 trillion

Total

N2.44 trillion

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

INEQUITABLE DISTRIBUTION

=FG

51%

49%

MPN and NNPC in a JV agreement have a revenue sharing structure of 51% : 49%, this does not appear to be commercially beneficial to the Federation, which

has a 60% interest in the MPN JV.

MPN

NNPC

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

A difference of 6.6m barrels of Crude Oil that was lifted by

COMD on behalf of NPDC, that could not be traced to the Federation Account, though it reflected in the schedule of liftings

for the Federation Account. This lead to a loss of $681m based on an average yearly price of $101.9 per barrel.

$$

$

$

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

THE ISSUES

The five OMLs surrendered to NPDC, 26,30,34,40 and 42 were initially valued at $ 1.8 billion for which payment of $100 million has been

made to the Federation Account.

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

THE ISSUES

There was an unremitted balance of 0.25tn from domestic crude sales

NPDC’S UNREMITTED FUNDS

NDDC Levy

N28.34bnVAT

N7.03bn

WHT N17.09bn

Education Tax N15.69bn

FG

unremitted funds

Royalty on Gas $15.23m

$3.28bn

N68.19bn

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

&

PAYE N42.33m

Royalty on Oil

$451.37m

NLNG

Total unremitted NLNG dividends from 2015 - 2014

$15.82bn$

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

The 2014 receipt of $1.42 billion for NLNG payments with regards to dividends, loan and interest repayments could not be traced to

the Federation Accounts. Total unremitted NLNG dividends from 2005 - 2014 is $15.82bn.

NEITI recommends that funds must be investigated.

$2.1bn

As at 2014, $2.1 billion is the estimated amount

established by the Ministry of Finance to have been waived by the Federal Government via tax

holidays to beneficiary companies.

22 companies were grantedpioneer status in 2014.

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY

THE ISSUESPIONEER STATUS

UNRESOLVED ISSUES INNEITI AUDIT 2014

NPDC is yet to pay $1.7bn for the five OMLs surrendered to it.

The failure of NPDC to remit payment from the gross sale of crude oil or assets acquired is being questioned by NEITI.

NNPC needs to settle N3.98bn for over-recovery under the Petroleum Support Fund Scheme.

There is an outstanding amount of $2.27bn out of the total Domestic Crude Oil purchased by NNPC that was valued at $17.43bn

$

N

N

N

N E I T I 2 0 1 4 H I G H L I G H T O F T H E O I L A N D G A S I N D U S T RY