# FINAL REPORT

## OIL AND GAS INDUSTRY AUDIT 2023

## 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 ..... 13
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 ..... 18
1.6.1. Revenue Streams ..... 19

* * *

3.2.1.2. Crude Oil Losses and Deferment ..... 41
3.2.2. Gas Production ..... 46
3.2.2.1. Federation Entitlement to Gas Production ..... 51
3.2.2.2. Gas Flare, Un-Accounted, Shrinkage and Lift Gas ..... 51
3.3. Crude Lifting and Sales ..... 53
3.3.1. Crude Oil Lifting ..... 53
3.3.2. Sales of Crude Oil ..... 55
3.3.2.1. Tendering for Crude Oil Sales ..... 55
3.3.2.2. NNPC Limited Pricing of Crude Oil ..... 56
3.3.2.3. Crude Oil Sales and Proceeds ..... 58
3.3.2.4. Federation Export and Domestic Sales of Crude Oil ..... 59
3.3.2.5. Non-Financial Flows ..... 60
3.3.2

* * *

7.1. Midstream Operations ..... 81
7.1.1. Refinery Operations ..... 81
7.1.2. Domestic Crude Supply Obligations ..... 82
7.1.3. Associated and Non-Associated Gas and Crude Pipeline Infrastructure ..... 82
7.1.4. NNPC Refineries’ Balance ..... 83
7.2. Downstream Operations ..... 84
7.2.1. Domestic Crude Allocation and Utilisation ..... 84
7.2.2. Product Import Valuation ..... 85
7.2.3. PMS Price Differentials ..... 85
7.2.4. Products Imported ..... 86
7.2.4.1. Products Supplied (Imported) ..... 86
**CHAPTER 8** ..... 88
**Social and Economic Spending** ..... 88
8.1. Infrastructure Provisions and Barter Arrangement ..... 88
8.1.1. NNPC Limited

* * *

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 |
| 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 |

* * *

List of Crude Type and Abbreviation

| Crude |
| --- |
| Abo Crude |
| Agbami Condensate |
| Ajapa Blend |
| Aje Condensate |
| Akpo Condensate |
| Amenam |
| Antan Crude |
| Anyala Madu |
| Anyala Madu |
| Bonga Crude |
| Bonny Light |
| Brass Blend |
| EA |
| Ebok Crude |
| Egina Crude |
| Erha Crude |
| Escravos Light |
| Forcados Blend |
| Ima |
| Jones Creek |
| Nembe Crude |
| Nuway |
| Okono Crude |
| Okwori Crude |
| Okwuibome Blend |
| Otakikpo Crude |
| Oyo Crude |
| Pennington Crude |
| Qua Iboe |
| Usan Crude |
| Yoho Crude |

|  | Acronym |
| --- | --- |
|  | Abo |
|  | Agbami |
|  | Aja |
|  | Aje |
|  | Akpo |
|  | Amenam |
|  | Antan |
|  | Anya |
|  | Anwa |
|  | Bonga |
|  | BL |
|  | BB |
|  | EA |
|  | Ebok |
|  | Egina |
|  | Erha |
|  | EL |
|  | FB |
|  | Ima |
|  | Jones |
|  | Nembe |
|  | Nuway |
|  | Okono |
|  | Okwo |
|  | Okwui |
|  | Otaki |
|  | Oyo |
|  | Pen |
|  | QIB |
|  | Usan |
|  | Yoho |

* * *

# List of Appendix

01. Terms of Reference
02. NEITI NSWG Materiality Decision
03. Inception Report
04. Context Report
05. Total Crude Oil Production and Lifting Volumetrics
06. Total Gas Production and Utilisation Volumetrics
07. NNPC Limited Lifting and Sales Per Bill of Lading and Vessel (Federation, NNPC Ltd, FIRS, NUPRC)
08. Payments Project Level Reporting
09. 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

* * *

# List of Tables

Table 1: Objectives of the NEITI Oil and Gas Audit ... 13

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- PIA, 2021 Implementation ... 19

Table 8: Reconciled and Unilateral Disclosed Revenue ... 20

Table 9: Reconciled and Unreconciled Companies ... 21

Table 10: Reconciled Companies ... 21

Table 11: Unreconciled Companies ... 24

Table 12: Government Entities Covered in the Report ... 25

Table 13: Other Related Entities Covered in the Report ... 25

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 Year-End ... 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 Status ... 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 ... 31

Table 25: Disparity in Crude Oil Production ... 32

Table 26: Crude Oil Production by Producing Companies ... 34

Table 27: NNPC Limited 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 ... 43

Table 31: Crude Oil Production Deferment (Scheduled and Unscheduled) ... 44

Table 32: Gas Production by Companies on Asset Basis ... 47

Table 33: NNPC Limited Entitlement from JV Production ... 51

Table 34: Total Crude Lifting ... 53

Table 35: DSDP Tendering in 2023 ... 55

Table 36: Successful bidders for Direct Sales Direct Purchases (DSDP) in 2023 ... 55

Table 37: Crude Oil- Total Sales Value ... 58

Table 38: Crude Oil- Total Sales Quantity ... 58

Table 39: Federation Export and Domestics Crude Sales Value ... 59

Table 40: Federation Export and Domestics Crude Sales Quantity ... 59

Table 41: In-Kind Payment on Crude Oil, Gas and Feedstock ... 60

Table 42: Cash Call Liabilities ... 60

* * *

Table 43: NNPC Limited Outstanding Liabilities ... 61

Table 44: Federation Entitlement from Gas Sales ... 63

Table 45: NNPC Ltd and NUPRC Gas Sales ... 63

Table 46: Gas Sales Quantity and Value ... 64

Table 47: Gas Sales Proceeds ... 64

Table 48: 2023 Company Responses on Climate Change Polices and Implementation Status ... 65

Table 49: 2023 Company Responses Greenhouse Gas Emission ... 66

Table 50: Total Revenue from the Sector ... 67

Table 51: Disaggregation of Revenue Flows ... 69

Table 52: Reconciliation of Revenue Flows ... 72

Table 53: JV Partners And Equity Holding ... 75

Table 54: 2023 OPCOM Approved Cash-Call Budget ... 76

Table 55: Summary of Inflow and Outflow into Joint Venture Cash Call Bank Accounts ... 77

Table 56: Analysis of Total Inflow to JVCC Accounts ... 77

Table 57: Analysis of Total payments from JVCC Accounts ... 78

Table 58: Summary of NUIMS Overheads Performance and 2023 Funding ... 79

Table 59: Details of Outflow from Joint Venture Cash Call Bank Account ... 79

Table 60: Status of Licensed Refineries ... 81

Table 61: Significant Pipeline Infrastructure Investment and Projects in the Midstream ... 82

Table 62: PHRC Refinery Balance (Crude Material Balance) ... 83

Table 63: PHRC Refinery Balance (Products Material Balance) ... 83

Table 64: WRPC Refinery Balance (Crude Material Balance) ... 83

Table 65: WRPC Refinery Balance (Products Material Balance) ... 84

Table 66: NNPC Limited Imported PMS Cost, Revenue and Under Recovery ... 85

Table 67: Product Supplied (Imported) ... 86

Table 68: Status of NNPC Limited Commitments and Contingencies as of 31st July 2024 ... 89

Table 69: Status Update of NNPC Limited Tax Credit Under the Scheme: 30 April 2024 ... 93

Table 70: Host Community Development Administration and Project Management ... 93

Table 71: Host Community Development Remittance ... 94

Table 72: Voluntary Social Expenditure by Company ... 94

Table 73: Voluntary Social Expenditure by Utilisation ... 95

Table 74: Quasi-Fiscal Expenditures ... 95

Table 75: Contribution of the Sector to Nigeria’s Total GDP ... 96

Table 76: Contribution of the Sector to Total Exports ... 96

Table 77: Contribution of the Sector to Government Revenue ... 97

Table 78: Company Responses on Gender Policies in the Sector ... 97

Table 79: Total Employment in the Sector ... 98

Table 80: Employment Distribution Based on Nationality and Gender ... 98

Table 81: Environmental Incidence Management ... 98

Table 82: Other NUPRC Environmental Activities ... 99

Table 83: Environmental Safety Control Activities ... 100

Table 84: Observations and Recommendations for 2022-2023 Extractive Reporting ... 124

* * *

# List of Figures

Figure 1: EITI Standard: Summary of Changes ... 12

Figure 2: Summarised Audit Approach ... 14

Figure 3: Ten-Year Trend of Crude Oil Production in Nigeria Million Barrels ... 33

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) ... 52

Figure 8: Ten (10) Year Trend of Un-Accounted Gas (Billion SCF) ... 52

Figure 9: Five-Year Trend of Crude Oil Lifting-mbbls- 2019-2023 ... 54

Figure 10: 2022-2023 NNPC Limited Monthly Trend of Crude Oil Selling Prices ... 56

Figure 11: 2023 Monthly Global Comparison of NNPCL Crude Oil Selling Prices (US$/ Bbl). 57

Figure 12: Five-Year Trend of Gas Utilisation- Million SCF ... 62

Figure 13: Revenue Distribution Chart (Billion Dollars) ... 68

Figure 14: Ten-Year Trend of Total Financial Flows ... 68

Figure 15: Eighteen (18) Year Trend of Petroleum Products Price Differentials- 2006 – 2023... 85

Figure 16: PMS Importation Ten-Year Trend (2014-2023) (Billion Litres) ... 86

Figure 17: 2023 Monthly Product Importation (Billion Litres) ... 87

* * *

# CHAPTER 1 Introduction

The EITI continuously advocates transparency and accountability in the extractive sectors across implementing countries and NEITI facilitates EITI implementation in Nigeria.

The EITI Standard 2023, launched at the EITI Global Conference in Dakar, Senegal, in June 2023, it amends existing and introduces new themes critical to the extractive sector. These are anti- corruption, energy transition, gender equality, social, environmental and marginalized group's concerns, and extractive sector revenue management. See details in Figure below.

_Figure 1: EITI Standard: Summary of Changes_

Source: EITI Standard 2023: Summary of Changes

The 2023 NEITI Oil and Gas Industry Report is prepared in line with the 2023 EITI Standard and the NEITI Act of 2007. The Report also addressed the gaps in the NEITI 2022 Oil and Gas Industry Report and the 2023 EITI Nigeria Validation Assessment report.

# 1.1. Background Information

The Independent Administrator (IA) is engaged annually to reconcile company and government records based on the EITI Standard. Therefore, the aggregated information is published in an annual Report alongside additional extractive industry information. See Contextual Report for details.

* * *

1.2. Objective of the Report

The 2023 NEITI Oil and Gas Industry Report retrospectively leveraged the 2024 NSWG annual
work plan which reflects current national priorities as documented in section 7.2 of the 2023 –
2025 Medium Term Expenditure Framework, and the Fiscal Strategy Paper.

Furthermore, the IA leveraged the 2022 NEITI Oil and Gas Industry Reports, the last NEITI Fiscal
Allocation and Statutory Disbursement Report and the NSWG strategy for the implementation of
the EITI in Nigeria detailed in the NEITI Strategic Plan for 2022 – 2026. The requirements of the
Reports and the work done by the IA to achieve the specific objectives are outlined below.

Table 1: Objectives of the NEITI Oil and Gas Audit

| Key Requirement | Description |
| --- | --- |
| Regulatory Framework and Procedures | Report on all aspects of the regulatory framework for the oil and gas industry: including the legal framework, fiscal 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. |  |
| Disclose comprehensive information about state-owned enterprise participation in the oil and gas sector. |  |
| Exploration and Production Information | Disclose an overview of the exploration activities in the oil and gas sector highlighting its potential, recent, ongoing, and planned significant exploration activities. |
| Disclose information about oil and gas production levels and a valuation of extractive output. |  |
| Export And Domestic Information | Disclose information on oil and gas export volumes and a valuation of exports. |
| Revenue and Payment and Distribution | Disclose all company payments and government revenues from the oil and gas sector together with associated amounts lifted (oil) or sold (natural gas) to the required level of 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. |  |

* * *

| Key Requirement | Description |
| --- | --- |
|  | 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. |
| Climate Change and Energy Transition Plan | Provide information on government and companies' energy transition plans and policies including energy transition and 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 Domestic Product (GDP) | Obtain, assess and include information on the contribution of the oil and gas sector to the economy. |
| Outcomes and Impacts | Make observations and recommendations that will support policymaking. |

1.3. Scope of Work

st st
The period covered in the Report is from 1 January 2023 to 31 December 2023. The NEITI 2023
Oil and Gas Report is one of the final reports and outcomes of the 2022-2023 NEITI Oil and Gas
Audit. The Figure below shows the summarised Audit Approach adopted to deliver the six steps
EITI Reporting Process.

* * *

1.4. Data Collection, Sources and Basis of Reporting

This section discusses data collection methodology and sources, and the basis of reporting.

1.4.1. Data Collection and Sources

The primary and secondary data for the exercise were sourced from covered entities through
various data collection instrument as shown in the table below.

Table 2: Data Collection Instrument and Methodology

| Covered Entities | Primary Data | Secondary Data |
| --- | --- | --- |
| Companies | NEITI Audit Template |  |
| Template Checklist |  |  |
| Audit Information Request Checklist |  |  |
| NEITI Audit Management System |  |  |
| IA Electronic Data Collection-Google Drive, Microsoft SharePoint and One drive. |  |  |
| Interviews and continuously interaction for clarifications. |  |  |
| Focus Group Discussion during(Template Workshop, Systems Walkthrough Sessions and CompanyData Verification/RevalidationWorkshop) | Audited Financial Statements |  |
| Systematic DisclosedInformation on officialwebsite |  |  |
| Government |  | Systematic DisclosedInformation on officialwebsite |
| Annual Reports |  |  |

Source: NEITI 2022-2023 OGA, 2024

1.4.2. Basis of Reporting

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](https://www.cbn.gov.ng/rates/ExchRateByCurrency.asp)

* * *

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

| Year | Naira/US$ | Euro/USD | GBP/USD |
| --- | --- | --- | --- |
| 2023 | 645.92 | 1.08 | 1.25 |
| 2022 | 423.30 | 1.05 | 1.24 |

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 | 2018 |
| --- | --- |
| US$ |  |
| January |  |
| February |  |
| March |  |
| April |  |
| May |  |
| June |  |
| July |  |
| August |  |
| September |  |
| October |  |
| November |  |
| December |  |
|  |  |
| Annual Average |  |

| 2023/Naira | 2022US$/Naira |
| --- | --- |
| 389.00 | 389.00 |
| 389.17 | 389.17 |
| 389.30 | 389.30 |
| 389.66 | 389.66 |
| 392.35 | 392.35 |
| 394.80 | 394.80 |
| 401.30 | 401.30 |
| 403.87 | 403.87 |
| 409.50 | 409.50 |
| 418.18 | 418.18 |
| 417.42 | 417.42 |
| 432.78 | 432.78 |
|  |  |
| 402.28 | 402.28 |

Source: NEITI 2022-2023 OGA, 2024

* * *

1.5. Data Completeness, Accuracy, Quality and
Assurance

The Independent Administrator (IA) aligned data quality, assessment and confidentiality
procedures with the relevant International Standards on Auditing, and the requirements in the
International Financial Reporting Standards (IFRS), and the International Public Sector
Accounting Standards (IPSAS). See NEITI 2022 Oil and Gas Report for more details of the
strategy adopted for data quality.

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 Collection, Review and Validation | Distributed the following to the covered entities: |  |
| √ Audit data collection templates |  |  |  |
| √ Template Checklist |  |  |  |
| √ Information Request Checklist |  |  |  |
| Reviewed the populated and returned the NEITI Audit data collection templates of sixty-two (62) companies. |  |  |  |
| Reviewed the filled template checklist as well as the Audit Information Request Checklist | Returned Templates, subsequent explanation and additional information/clarification are relevant and sufficient, except otherwise stated in this report. |  |  |
| 2 | Data Cleaning | Performed data cleaning of returned template |  |
| 3 | Data Verification | Obtained and reviewed the source document as contained in the Audit Information 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 Completeness and Coverage | Aggregated government revenue from the Revenue Generating Agencies and as 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 Consistency | Reconciled the company record with RGA records and investigated discrepancies. |  |
| 6 | Data Transparency and Accessibility | Correspondences with covered entities are done with the designated email address for the exercise,copying the central email of NEITI Energy and Mining Department.Accessibility of the Contextual Report prepared and referenced in this report. |  |
| 7 | Data Documentation and Audit Trail | Obtained signed-off report post reconciliation workshop from the covered and participating companies.Reconfirmed the final outcomes with RGAs—e.g.production and lifting volumetrics,and generated revenue. |  |
| 8 | Reporting and Recommendation | Made recommendation in subsequent sessions of this report. |  |

1.6. Materiality of the Report

The Independent Administrator (IA) reviewed the NSWG materiality decision and confirmed
its adequacy for the reconciliation exercise. Additionally, the IA considered the revenue streams
generated from the sector resulting from implementation of the Finance Act 2022 and the
Petroleum Industry Act 2021 as shown below.
• Stamp Duties collected in the sector from the companies.

• Stamp Duties collected in the sector from the companies.
• Decommissioning and Abandonment Fund under the administration of the NUPRC

• Decommissioning and Abandonment Fund under the administration of the NUPRC
• Host Community Development Trust Fund
• 0.5% Midstream and Downstream Gas Infrastructure Fund

See Appendix 2: NEITI NSWG Materiality Decisions for further details. Table below shows
the materiality threshold and assessment at company and revenue streams levels.

• 0.5% Midstream and Downstream Gas Infrastructure Fund
• Frontier Exploration Fund

• Upstream Environmental Remediation Fund

* * *

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

| Level | Parameters | Outcomes Reconciliation Status |  |  |  |
| --- | --- | --- | --- | --- | --- |
| Description | No | Amount (US$ Billion) | % of Total Revenue |  |  |
| Company | 0.5% to the total payment | Reconciled Companies | 62 | 22.65 | 98.27% |
| Un-Reconciled Companies(In Production) | 1 | 0.40 | 1.73% |  |  |
| Un-Reconciled Companies(Not in Production) | 15 | - | 0.00% |  |  |
| Total | 78 | 23.05 | 100.00% |  |  |
| Revenue Stream | NSWG Decision | Reconciled Revenue | 24 | 21.11 | 68.42% |
| Unilateral Disclosed Revenue | 10 | 9.74 | 31.58% |  |  |
| Total | 34 | 30.85 | 100.00% |  |  |

Source: NEITI 2022-2023 OGA, 2024

Unilaterally disclosed revenues were validated with the source document while reconciled
revenues were validated with source document and reconciled with the Revenue Generating
Agency. 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.

Table 7: Revenue Streams- PIA, 2021 Implementation

1.6.1. Revenue Streams

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

| \# Revenue Streams |  |
| --- | --- |
| Reconciled |  |
| 1 | Proceeds from the sale of profit oil |
| 2 | Dividends from NLNG |
| 3 | Dividends from NNPC Limited |
| 4 | Royalty (oil) |
| 5 | Royalty (gas) |

|  | Responsible/Oversight Entities |
| --- | --- |
|  |  |
|  | NNPC Limited |
|  |  |
|  |  |
|  |  |
|  |  |

* * *

| # | Revenue Streams |
| --- | --- |
| 6 | Signature bonus |
| 7 | Gas flare penalty |
| 8 | Concession rentals |
| 9 | NDDC 3% levy |
| 10 | NCD 1% levy |
| 11 | Petroleum Profit Tax(PPT) |
| 12 | Company Income Tax |
| 13 | Education Tax |
| 14 | Value-added Tax |
| 15 | Withholding Tax |
| 16 | Pay As You Earn |
| 17 | Capital Gains Tax |
| 18 | Hydrocarbon Tax |
|  |  |
| Unilaterally Disclosed |  |
| 1 | Decommissioning and Abandonment Fund |
| 2 | Frontier Exploration Fund |
| 3 | Upstream Environmental Remediation Fund |
| 4 | 3% Host Community Development Trust |
| 6 | 0.5% Midstream and Downstream Gas Infra |
| 7 | Police Trust Funds |
| 8 | Stamp Duties |
| 9 | National Agency for Science and Enr(NASENI) |
| 10 | Withholding Tax |
| 11 | Pay As You Earn |
| 12 | NESS fee |
| 13 | Environmental Payments |

|  | Responsible/Oversight Entities |
| --- | --- |
|  | NUPRC |
|  |  |
|  |  |
|  | NDDC |
|  | NCDMB |
|  | FIRS |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
| I | NUPRC |
|  |  |
| Fund |  |
| Fund |  |
| Infrastructure Fund | NMDPRA |
|  | FIRS |
|  |  |
| Engineering Infrastructure |  |
|  | SIRS |
|  | FMF |
|  | FMEv/SMEv |

Source: NEITI 2022-2023 OGA, 2024

Table below shows the reconciled and unilaterally disclosed revenue covered in the Report.

| Description | US$ Billion | % |
| --- | --- | --- |
| Total Revenue Streams | 23.052 | 100.00% |
|  |  |  |
| Reconciled Streams | 22.652 | 98.27% |
| Unilateral Disclosure | 0.399 | 1.73% |

Table 8: Reconciled and Unilateral Disclosed Revenue

* * *

1.6.2. Covered Companies

A total of seventy-eight companies were identified at the start of the audit exercise, comprising
of sixty-four (64) producing companies, and fourteen (14) non-producing companies in the
review period. From the sixty-four (64) producing companies, sixty-two (62) fully participated
in the audit by providing the necessary data and documentation required for reconciliation.
However, one (1) company did not respond to the audit request and thus did not participate.
The details of the companies' participation status are provided in the table below.

A total of seventy-eight companies were identified at the start of the audit exercise, comprising
of sixty-four (64) producing companies, and fourteen (14) non-producing companies in the
review period. From the sixty-four (64) producing companies, sixty-two (62) fully participated
in the audit by providing the necessary data and documentation required for reconciliation.
However, one (1) company did not respond to the audit request and thus did not participate.
The details of the companies' participation status are provided in the table below.

Table 9: Reconciled and Unreconciled Companies

| Description |
| --- |
| Total Companies at the Start of the Audit |
|  |
| Reconciled Companies |
| Un-Reconciled Companies(In Production) |
| Un-Reconciled Companies(Not in Production) |

|  | # | % |
| --- | --- | --- |
|  | 78 | 100.00% |
|  |  |  |
|  | 62 | 79.49% |
|  | 2 | 2.56% |
|  | 14 | 17.95% |

Source: NEITI 2022-2023 OGA, 2024

Despite reconciling sixty-two (62) companies, the audit identified twenty-nine (29) material
companies, with the materiality threshold revised to 0.5% from 1.5%. These material
companies accounted for US$21.415 billion (95%) of the total payments, while non-material
companies contributed US$1.238 million (5%).

The table below outlines the covered companies, their respective payments, percentage
contributions to the total payments, and remarks on whether their payments were reconciled or
unilaterally disclosed in the report.

Table 10: Reconciled Companies

| # | Description | Payment US$ | C |
| --- | --- | --- | --- |
| 1 | Aiteo Eastern E&P Co Ltd | 233,617,497 |  |
| 2 | All Grace Energy Limited | 818,930 |  |
| 3 | Amni International Petroleum Ltd | 556,659,131 |  |
| 4 | Antan Producing Ltd | 37,850,239 |  |
| 5 | Aradel Holdings | 29,236,378 |  |

| % of Contribution | Material US$ | Non-Material US$ |
| --- | --- | --- |
| 1.03% | 233,617,497 | - |
| 0.00% | - | 818,930 |
| 2.46% | 556,659,131 | - |
| 0.17% | - | 37,850,239 |
| 0.13% | - | 29,236,378 |

* * *

| # | Description | PaymentUS$ | C |
| --- | --- | --- | --- |
| 6 | Belema Oil | 53,276,410 |  |
| 7 | Brittania U-Nigeria | 35,908,288 |  |
| 8 | Chevron Nigeria Ltd | 1,283,463,239 |  |
| 9 | China National Oil Development Co. | 1,503,977,035 |  |
| 10 | Chorus Energy Ltd | 24,356,391 |  |
| 11 | Conoil Producing Ltd | 14,097,621 |  |
| 12 | Continental Oil and Gas Company | 82,828,415 |  |
| 13 | Dubri Oil Company Limited | 91,219,610 |  |
| 14 | Elcrest Exploration and Production Nigeria Ltd | 981,491,824 |  |
| 15 | Energia Limited | 12,754,799 |  |
| 16 | Equinor Nigeria Energy Company Limited (now Chappal Energies) | 492,500,529 |  |
| 17 | Esso E&P(Offshore East) Nigeria Ltd | 199,619,587 |  |
| 18 | Esso E&P Nigeria Ltd | 343,432,114 |  |
| 19 | Excel Exploration & Production Limited | 104,374,668 |  |
| 20 | Famfa Oil Limited | 311,139,956 |  |
| 21 | First Exploration and Production | 278,892,426 |  |
| 22 | First Hydrocarbon Nigeria | 20,899,649 |  |
| 23 | Frontier Oil Limited | 1,635,217,315 |  |
| 24 | Green Energy International Limited | 171,025,443 |  |
| 25 | Heirs Energies Ltd | 70,420,120 |  |
| 26 | Lekoil Limited | 594,471,826 |  |
| 27 | Midwestern Oil and Gas | 26,851,738 |  |
| 28 | Millennium Oil & Gas Limited | 27,826 |  |
| 29 | Mobil Producing Nigeria Unlimited | 714,683,343 |  |
| 30 | Moni Pulo Ltd | 18,265,413 |  |

| % of Contribution | Material US$ | Non-Material US$ |
| --- | --- | --- |
| 0.24% | - | 53,276,410 |
| 0.16% | - | 35,908,288 |
| 5.67% | 1,283,463,239 | - |
| 6.64% | 1,503,977,035 | - |
| 0.11% | - | 24,356,391 |
| 0.06% | - | 14,097,621 |
| 0.37% | - | 82,828,415 |
| 0.40% | - | 91,219,610 |
| 4.33% | 981,491,824 | - |
| 0.06% | - | 12,754,799 |
| 2.17% | 492,500,529 | - |
| 0.88% | 199,619,587 | - |
| 1.52% | 343,432,114 | - |
| 0.46% | - | 104,374,668 |
| 1.37% | 311,139,956 | - |
| 1.23% | 278,892,426 | - |
| 0.09% | - | 20,899,649 |
| 7.22% | 1,635,217,315 | - |
| 0.75% | 171,025,443 | - |
| 0.31% | - | 70,420,120 |
| 2.62% | 594,471,826 | - |
| 0.12% | - | 26,851,738 |
| 0.00% | - | 27,826 |
| 3.15% | 714,683,343 | - |
| 0.08% | - | 18,265,413 |

* * *

| # | Description | Payment US$ | C |
| --- | --- | --- | --- |
| 31 | NAOC(Now Oando PLC) | 199,831,505 |  |
| 32 | ND Western Limited | 88,408,389 |  |
| 33 | Neconde Energy Ltd | 39,575,890 |  |
| 34 | NE&PL | 1,170,820,055 |  |
| 35 | Network Exploration & Production Ltd | 50,586,916 |  |
| 36 | Newcross E&P Ltd | 3,378,399 |  |
| 37 | Newcross Petroleum Limited | 714,251 |  |
| 38 | Nexen Petroleum Nigeria Limited | 102,701,477 |  |
| 39 | Nigerian Agip Exploration(NAE) | 82,301,879 |  |
| 40 | OANDO Oil Ltd | 3,410,473 |  |
| 41 | OANDO PDC | 209,017 |  |
| 42 | OANDO Qua Iboe Ltd | - |  |
| 43 | Oriental Energy Resources Ltd | 285,294,537 |  |
| 44 | Pillar Oil Limited | 12,234,609 |  |
| 45 | Platform Petroleum Ltd | 1,055,501,489 |  |
| 46 | Prime 127 Nigeria Limited(FMR Petrobras Oil&Gas) | 39,901,089 |  |
| 47 | Prime 130 Nigeria Ltd | 123,705,370 |  |
| 48 | Seplat Energies Ltd | 253,256,944 |  |
| 49 | Shell Nig. Exploration&Production Co Ltd | 2,681,323,301 |  |
| 50 | SPDC | 1,942,110,218 |  |
| 51 | Shoreline Natural Resources Ltd | 76,123,890 |  |
| 52 | SINOPEC | 10,601,692 |  |
| 53 | South Atlantic Pet.Ltd | 180,921,776 |  |
| 54 | Star Deepwater Petroleum Limited | 668,846,377 |  |
| 55 | Sterling Global Oil Resources Limited | 30,819,774 |  |
| 56 | Sterling Oil E&P Production Co Ltd | 248,762,539 |  |

| % of Contribution | Material US$ | Non-Material US$ |
| --- | --- | --- |
| 0.88% | 199,831,505 | - |
| 0.39% | - | 88,408,389 |
| 0.17% | - | 39,575,890 |
| 5.17% | 1,170,820,055 | - |
| 0.22% | - | 50,586,916 |
| 0.01% | - | 3,378,399 |
| 0.00% | - | 714,251 |
| 0.45% | - | 102,701,477 |
| 0.36% | - | 82,301,879 |
| 0.02% | - | 3,410,473 |
| 0.00% | - | 209,017 |
| 0.00% | - | - |
| 1.26% | 285,294,537 | - |
| 0.05% | - | 12,234,609 |
| 4.66% | 1,055,501,489 | - |
| 0.18% | - | 39,901,089 |
| 0.55% | 123,705,370 | - |
| 1.12% | 253,256,944 | - |
| 11.84% | 2,681,323,301 | - |
| 8.57% | 1,942,110,218 | - |
| 0.34% | - | 76,123,890 |
| 0.05% | - | 10,601,692 |
| 0.80% | 180,921,776 | - |
| 2.95% | 668,846,377 | - |
| 0.14% | - | 30,819,774 |
| 1.10% | 248,762,539 | - |

* * *

| # | Description | Payment US$ |
| --- | --- | --- |
| 57 | Texaco Nigeria Outer Shelf Limited | 66,366,529 |
| 58 | Total Exploration & Production Nigeria Ltd | 2,406,518,530 |
| 59 | Total Upstream | 739,001,847 |
| 60 | Universal Energy Ltd. | 6,300,144 |
| 61 | Waltersmith Petroman Oil Ltd. | 158,867,367 |
| 62 | Yinka Folawiyo Petroleum Company | 717,619 |
|  | Total | 22,652,491,653 |

| % of Contribution | Material US$ | Non-Material US$ |
| --- | --- | --- |
| 0.29% | - | 66,366,529 |
| 10.62% | 2,406,518,530 | - |
| 3.26% | 739,001,847 | - |
| 0.03% | - | 6,300,144 |
| 0.70% | 158,867,367 | - |
| 0.00% | - | 717,619 |
| 100.00% | 21,414,953,121 | 1,237,538,532 |

Source: NEITI 2022-2023 OGA, 2024

Furthermore, sixteen (16) companies did not participate in the audit process due to
nonproduction, licenses revocation and contract termination. However, six (6) companies made
a total payment of US$107.63 million to the government which has been duly recognised in
the audit process. Table below shows the unreconciled companies.

Table 11: Unreconciled Companies

| # | Covered Companies | Payment(US$) | Rationale for non-participation |
| --- | --- | --- | --- |
| 1 | Consolidated Oil&Gas | - | No production and Payment |
| 2 | Consolidated Oil | - |  |
| 3 | Halkin Exploration and Production Limited | - | Non-Responsive |
| 4 | Allied Energy | - | License Revoked |
| 5 | Summit Oil | - | No production and Payment |
| 6 | AENR | - | Contract Terminated |
| 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) | 104,003,989 | Non-Responsive |
| 12 | Wester Ord | 50,000 | Below MaterialityThreshold |
| 13 | Pan Ocean | 100,000 |  |
| 14 | Petralon Energy Nigeria | 31,110 |  |

* * *

| # | Covered Companies | Payment(US$) | Rationale for non-participation |
| --- | --- | --- | --- |
| 15 | Tenoil Petroleum and Energy Services | 1,479,056 | No production but payment for VAT&WHT |
| 16 | Enageed Resources Ltd | 1,969,043 | Non-Responsive |
|  |  |  |  |
|  | Total | 107,633,198 |  |

Source: NEITI 2022-2023 OGA, 2024

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 |
| --- | --- |
| Revenue Generating Agencies (RGA) | 1\. Federal Inland Revenue Service(FIRS) |
| 2\. Nigerian Upstream Petroleum Regulatory Commission(NUPRC) |  |
| 3\. Nigerian Midstream and Downstream Petroleum Regulatory Authority(NMDPRA) |  |
| 4\. Niger Delta Development Commission(NDDC) |  |
| 5\. Federal Ministry of Finance, Budget and National Planning |  |
| 6\. Nigerian Content Development and Monitoring Board(NCDMB) |  |
| Other Government Entities | 1\. Central Bank of Nigeria(CBN) |
| 2\. Office of the Accountant-General of the Federation(OAGF) |  |
| 3\. Federal Ministry of Environment(FMEv) |  |
| 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 Authorities | 1\. Nigeria Sao-Tome Joint Development Authority |
| Source:NEITI 2022-2023 OGA,2024 |  |

Table 13: Other Related Entities Covered in the Report

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

| Category | Description |
| --- | --- |
| State-Owned Enterprise(SOE) | Nigerian National Petroleum Company Limited |
| Midstream Gas Company | Nigeria Liquified Natural Gas(NLNG)Limited |
| Source:NEITI2022-2023OGA,2024 |  |

* * *

1.6.4. Quantitative Assessment of Data Quality

The assessment of data quality covered all the identified steps, Data Collection, Review and
Validation, Data Cleaning, Data Verification, and Data Completeness and Coverage. Others are
Data Consistency, Data Transparency and Accessibility, Data Documentation and Audit Trail,
and Reporting and Recommendation. See NEITI 2022 Oil and Gas Industry Report for the
detailed assessments carried out.

Table below shows a further assessment of data quality based quantitative parameters.

Table 14: Quantitative Assessment of Data Quality

| Parameters |  | # | Responses |  | Rating |
| --- | --- | --- | --- | --- | --- |
|  | # | % |  |  |  |
| Covered Companies |  | 64 | 62 | 96.88% | High |
| Audited Financial Statement/Attested Management Accounts |  | 28 | 26 | 92.8% | High |
| NUPRC Production Signed-off |  | 52 | 49 | 94.23% | High |
| NUPRC Lifting Signed-off |  | 72 | 66 | 91.67% | High |
| Covered Entities Signed-off Report |  | 62 | 53 | 85.48% | High |

Source: NEITI 2022-2023 OGA, 2024
Level of Assurance Grading

Level of Assurance Grading
• High: Above 79%

• High: Above 79%
• Medium: Between 50% and 79%

• Medium: Between 50% and 79%
• Low: Below 50%

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

* * *

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

It is imperative to ensure transparency and accountability in the process of allocating contracts,
licenses and lease 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 additional twelve (12) Petroleum Prospecting Licenses (PPL) were issued in 2023,
comparing fifty-one (51) in 2022 by the NUPRC. Furthermore, one (1) Petroleum Exploration
License (PEL) and twenty-three (23) Petroleum Mining License (PML) were issued in 2022
under the PIA, 2021 as shown in the table below

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

| License/Lease Type | Description | 2023 | 2022 |
| --- | --- | --- | --- |
| # | # |  |  |
| PEL | Existing as of start of the year | - | - |
| Add: Issued during the year | 1 | - |  |
| Less: Revoked during the year | - | - |  |
| Existing as of end-year | 1 | - |  |
| PPL | Existing as of start of the year | 51 | - |
| Add: Issued during the year | 12 | 51 |  |
| Less: Revoked during the year | - | - |  |
| Existing as of end-year | 63 | 51 |  |
| PML | Existing as of start of the year | - | - |
| Add: Issued during the year | 23 | - |  |
| Less: Revoked during the year | - | - |  |
| Existing as of end-year | 23 | - |  |

* * *

2.2. Register of Licenses

The Register of licenses is to further provide assurances on accountability in the sectors. 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 of Licenses | License Document | Variance | Entity Remarks |
| --- | --- | --- | --- | --- |
| # | # |  |  |  |
| PEL | 1 | 1 | - |  |
| PPL/OPL | 63 | 63 | - | Additional PPL was issued and no OPL |
| PML/OML | 23 | 23 | - | No OML was issued in 2023 |

Source: NEITI 2022-2023 OGA, 2024

The comparison of the publicly available Contract and Licenses and 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.

| Parameter | Register of Licenses | Publicly Available |  | Variance | Entity Remarks |
| --- | --- | --- | --- | --- | --- |
| # | # | # |  |  |  |
| PEL | 1 | 1 | - | [http://www.nuprc.gov.ng](http://www.nuprc.gov.ng/) |  |
| PPL | 63 | 63 | - | [https://www.nuprc.gov.ng/](https://www.nuprc.gov.ng/) |  |
| PML | 23 | 23 | - | [https://www.nuprc.gov.ng/](https://www.nuprc.gov.ng/) |  |

2.4. Beneficial Ownership

Disclosure and regular update of the ultimate beneficial owner of the oil and gas contracts,
licenses and leases support the transparency in the oil and gas sector. 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.

Source: NEITI 2022-2023 OGA, 2024

* * *

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

Anti-Corruption and regular update on the corrective and preventive measures of corruption in
the oil and gas demonstrate more accountability. See the Contextual Report for description,
laws and regulations on the anti-corruption in Nigeria.
implementation status were expected from sixty-two (62) reconciled companies. Forty-two
companies reported not avaliable indicating that, there is the need for more sensitization on the
adoption of anti-corruption policies by companies. Table below shows the responses from
reconciled companies.

Anti-Corruption and regular update on the corrective and preventive measures of corruption in
the oil and gas demonstrate more accountability. 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. Forty-two
companies reported not avaliable indicating that, there is the need for more sensitization on the
adoption of anti-corruption policies by companies. Table below shows the responses from

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

| 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

* * *

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 (FDP) are approved by the NUPRC impacts exploration activities in
the oil and gas sector of Nigeria. FDP shows the potential investment and future economic
benefits from the sector. NUPRC approved Field Development Plans (FDP) has an estimated
oil reserve of 1,310 million Stock Tank Barrel (MMSTB) and estimated gas reserves of 10,251

Field Development Plans (FDP) are approved by the NUPRC impacts exploration activities in
the oil and gas sector of Nigeria. FDP shows the potential investment and future economic
benefits from the sector. NUPRC approved Field Development Plans (FDP) has an estimated
oil reserve of 1,310 million Stock Tank Barrel (MMSTB) and estimated gas reserves of 10,251

oil reserve of 1,310 million Stock Tank Barrel (MMSTB) and estimated gas reserves of 10,251
billion Standard Cubic Feet (BSCF). The FDP Capital Expenditure (CAPEX) is valued at
US$12.315 billion, Operating Expenditure (OPEX) at US$ 1.912 billion and the Abandonment
Expenditure (ABEX) at US$379 million, as shown in the table below.

Expenditure (ABEX) at US$379 million, as shown in the table below.

Expenditure (ABEX) at US$379 million, as shown in the table below.

Table 21: Approved Field Development Plans

| Parameter | UoM |  |  |
| --- | --- | --- | --- |
| Deep Offshore | 陆地 |  |  |
| Number of Approval |  | 2 |  |
| Estimated Oil Reserves | MMSTB | 54 |  |
| Estimated Gas Reserves | BSCF | 56 |  |
| Estimated Condensate Reserves | MMSTB | - |  |
| Expected Oil Rate | BOPD | 55000 | 40 |
| Expected Gas Rate | MMScf/D | 19 |  |
| Expected Condensate Rate | BCPD | - |  |
| CAPEX | US$' M | 265 |  |
| OPEX | US$' M | 106 |  |
| ABEX | US$' M | 28 |  |

| Terrain |  |  |  | Total |
| --- | --- | --- | --- | --- |
| and | Offshore | Onshore | Swamp |  |
| 2 | 5 | 21 | 1 | 31 |
| 341 | 230 | 685 | - | 1,310 |
| 658 | 1,387 | 8,112 | 38 | 10,251 |
| - | 19 | 35 | 0 | 55 |
| 500 | 64,500 | 141,124 | - | 301,124 |
| 158 | 527 | 1,116 | 50 | 1,870 |
| - | 19 | - | 300 | 319 |
| 260 | 1,333 | 10,020 | 437 | 12,315 |
| - | 450 | 1,171 | 184 | 1,912 |
| - | 213 | 115 | 23 | 379 |

Source: NEITI 2022-2023 OGA, 2024 (NUPRC Responses)

* * *

3.1.2. Proven and Unproven Reserves

Proven and unproven reserves data was expected from sixty-two (62) reconciled companies,
while only 14 provided, indicating 23% response. 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

Crude oil reserve was 31.56 billion barrels in 2023, comparing 31.06 billion barrels in 2022.
The increase of 0.50 billion barrels in oil reserves is attributed to recent discoveries, as reflected
in the table below. This demonstrates ongoing exploration efforts contributing to reserve
additions, albeit at a modest scale. Further investments in exploration are essential to sustain
growth and meet future production demands.

| Description | UOM |
| --- | --- |
| Crude Oil | Billion Barrels |
| Condensate | Billion Barrels |
| Associated Gas | Trillion SCF |
| Non-Associated Gas | Trillion SCF |
| Source: NEITL 2022-2023 OGA 2024 |  |

| 2023 | 2022 | Change |  |
| --- | --- | --- | --- |
| QTY | % |  |  |
| 31.56 | 31.06 | 0.50 | 1.6% |
| 5.94 | 5.90 | 0.0 | 0.7% |
| 102.59 | 102.32 | 0.3 | 0.3% |
| 106.67 | 106.51 | 0.2 | 0.2% |

| Parameters | Description | UOM |
| --- | --- | --- |
| Capital Raised and Source | Nigerian Government | US$ |
| Sao-Tome Government | US$ |  |
| Domestic Investment | US$ |  |

| 2023 | 2022 | IA Remarks |
| --- | --- | --- |
| - | - | No responses were received. |
| - | - |  |
| - | - |  |

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. The table below shows there were no activities based on the expected
parameters.

Source: NEITI 2022-2023 OGA, 2024

* * *

| Parameters | Description | UOM |
| --- | --- | --- |
|  | Foreign Direct Investment | US$ |
| Exploration Activities | Developed FDP | # |
| Submitted FDP | # |  |
| Approved FDP | # |  |
| Implemented FDP | # |  |
| Developed Rigs | # |  |
| Developed Wells | # |  |
| Production Activities | Crude Oil | Barrels |
| Gas | SCF |  |
| Lifting and Sales | Crude Oil | Barrels |
| Gas | SCF |  |
| Returns on Investment | Nigerian Government | US$ |
| Sao-Tome Government | US$ |  |
| Domestic Investors | US$ |  |
| Foreign Direct Investors | US$ |  |

| 2023 | 2022 | IA Remarks |
| --- | --- | --- |
| - | - |  |
| - | - |  |
| - | - |  |
| - | - |  |
| - | - |  |
| - | - |  |
| - | - |  |
| - | - |  |
| - | - |  |
| - | - |  |
| - | - |  |
| - | - |  |
| - | - |  |

Source: NEITI 2022-2023 OGA, 2024

3.2. Production

Production activities are carried out under various production arrangement – Joint Venture
(JV), Production Sharing Contract (PSC), Marginal Fields (MF) and Sole Risk (SR).
Measurement of production volumes are done at the Wellheads, production platforms and the
terminals (fiscalised production).

Source: NEITI 2022-2023 OGA, 2024

| Description |
| --- |
|  |
| NUPRC Systematic Disclosure |
| NUPRC Submission to NEITI |
| NUPRC Signed-off Report |

|  | 2023 | 2022 |
| --- | --- | --- |
|  | mmbbls | mmbbls |
|  | 536.75 | 502.99 |
|  | 538.21 | 485.23 |
|  | 537.57 | 490.94 |

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 537.571 million barrels in 2023, comparing 490.945
million barrels in 2022. The fiscalised crude oil production increased by 46.626 million barrels
(9.5%) from 2022 to 2023 due to decrease in production deferment in 2023.

A ten (10) year trend (2014 to 2023) of fiscalised crude oil production in Nigeria shows that
the highest production volumes of 798.542 million barrels was in 2014 and lowest of 490.945
million barrels was in 2022. The country’s production capacity in 2023 was at 67.16%
efficiency based on the 2013 production volume of 800.488 million barrels. Though a slight
improvement from 2022 production efficiency of 61.33%.

The 2023 slight increase in efficiency was due to decrease in production deferment, and
increased government efforts to address oil theft/ sabotage. However, there would be need for
government to intensify efforts to ramp-up operating capacities of the production platforms,
curb possible crude loss from unmetered Wellheads, create more enable investment climate to
increase producing oil Wells, amongst other possible solutions. The figure below shows the ten
(10) years trend of fiscalised crude oil production.

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

Source: 2013 – 221 NEITI OGA Reports; 2022-2023 NEITI OGA, 2024

Metered production increased by 3.86% from 525.278 million barrels in 2022 to 545.543
million barrels in 2023.

Total metered production at flow station was 545.202 million barrels in 2023, comprising
537.571 million barrels (98.60%) fiscalised production, 2.910 million barrels (0.53%)
measurement error, -532.347 thousand million barrels (-0.10%) production adjustment, 5.252
million barrels (0.96%) theft/sabotage and 1,881 barrels (0.00%) terminal adjustment as shown
in the table below.

* * *

Table 26: Crude Oil Production by Producing Companies

| Producers | Crude Type | Asset Number | Metered Production at Flow Station Bbls | Metered Production at Flow Station Bbls |
| --- | --- | --- | --- | --- |
| All Grace Energy | Ima | 17 | 131,376 |  |
| Aradel Holdings PLC | BL | 54 | 3,560,368 |  |
| Aiteo Eastern E&P Company Ltd | Nembe | 29 | 4,249,749 |  |
| AMNI International Petroleum Development Co. | Okoro | 112 | 2,333,571 |  |
| Antan Producing Limited | Okwori | 126 | 879,973 |  |
| Antan | 123 | 3,789,658 |  |  |
| BB | 124 | 706,023 |  |  |
| Belema Oil Company Ltd | BL | 55 | 62,453 |  |
| BRITANNIA U | Ajapa | 6 | 145,284 |  |
| Chevron Nigeria Limited | EL | 49/86/90/95/88/91 | 45,749,090 |  |
| FB |  | 444,346 |  |  |
| EL | 49/86/90/95/88/91 | 6,811,664 |  |  |
| Consolidated Oil and Gas Company Limited | EL | 103 | 182,771 |  |
| Chorus Energy Limited | BB | 56 | - |  |
| FB | 56 | 321,254 |  |  |
| Continental Oil and Gas | Pen | 59 | 2,846,025 |  |

| Measurement Error Bbls | Refund/Production Adjustment Bbls | Theft/Sabotage Bbls | Terminal Adjustment Bbls | Fiscalized Production Bbls |
| --- | --- | --- | --- | --- |
| - | - | - | - | 131,376 |
| 5,719 | - | 105,133 | - | 3,449,516 |
|  | - |  | - | 4,249,749 |
| - | (2,297) | - | - | 2,335,868 |
|  | - | - | - | 879,973 |
| 1,119 | - | - | - | 3,788,539 |
| - | - | - | - | 706,023 |
| 37 | - | - | - | 62,416 |
| - | - | - | 1,320 | 143,964 |
| - | - | - | - | 45,749,090 |
| - | (103,197) | 53,896 | - | 493,647 |
| - | - | - | - | 6,811,664 |
| - | - | - | - | 182,771 |
| - | - |  | - |  |
| - | 2,310 | 14,451 | - | 304,493 |
|  | 22,085 |  |  | 2,823,940 |
| Dubri Oil Limited | EL | 96 | 60,395 |  |
| Enageed Resource Limited | FB | 111 | 1,033,043 |  |
| Energia Limited | FB | 56 | 1,331,659 |  |
| EXCEL E&P | FB | 46 | 929,765 |  |
| Esso Exploration and Production Nigeria Limited\_ERHA | Erha | 133 | 23,446,692 |  |
| Esso Exploration and Production Nigeria Limited\_USAN | Usan | 138 | 12,406,464 |  |
| Frontier Oil Limited | QIB | 13 | 240,927 |  |
| First Exploration & Petroleum Dev. Co.Ltd | Anya | 83/85 | 15,140,302 |  |
| General Hydrocarbon Ltd | Oyo | 120 | 289,917 |  |
| Green Energy | Otaki | 11 | 3,320,000 |  |
| Halkin Exploration and Production Limited | Ajapa | 46 | 199,189 |  |
| HEIRS ENERGY | BL | 17 | 8,686,917 |  |
| Midwestern Oil and Gas Limited | FB | 56 | 3,334,855 |  |
| BB | 56 | - |  |  |
| Mobil Producing Nig.Unltd | Yoho | 67/68/70/104 | 10,739,482 |  |
| QIB | 67/68/70/104 | 48,170,230 |  |  |
| Millennium Oil | FB | 11 | 59,771 |  |
| MONIPULO Limited | Antan | 114 | 730,586 |  |

| Measurement Error | Refund/Production Adjustment | Theft/Sabotage | Terminal Adjustment | Fiscalized Production |
| --- | --- | --- | --- | --- |
| Bbls | Bbls | Bbls | Bbls | Bbls |
| - | 4,174 | - |  | 56,221 |
| - |  | 46,713 |  | 986,331 |
| - | 8,907 | 57,016 |  | 1,265,736 |
| 13,203 | (16,141) | (4,949) |  | 937,652 |
|  | 11 | - |  | 23,446,681 |
| - |  | - |  | 12,406,464 |
| - |  | - |  | 240,927 |
| - |  | - |  | 15,140,302 |
| - |  | - |  | 289,917 |
|  | 243 | - |  | 3,319,757 |
| - |  | - |  | 199,189 |
| 772,819 |  | 621,267 |  | 7,292,831 |
|  | 31,728 | 157,633 |  | 3,145,494 |
|  | 109 |  |  | 10,739,373 |
| - | - | - | - | 48,170,230 |
| - | - | - | - | 59,771 |
| - | - | - | - | 730,586 |
| Nigerian Agip Exploration | Abo | 125 | 2,605,558 |  |
| Nigerian Agip Oil Company | BB | 60/61/62/63 | 7,910,313 |  |
| Network E&P limited | QIB | 13 | 438,840 |  |
| Newcross Petroleum Ltd | FB | 152 | 82,972 |  |
| Newcross E&P Limited | BL | 24 | 7,573,972 |  |
| NNPC E&P Limited | BL | 11 | 6,677,340 |  |
| NEPL/NECONDE | Pen | 42 | 659,119 |  |
| NEPL/NECONDE | Jones | 42 | 4,274,964 |  |
| NNPC E&P Limited | Okono | 111/98/147 | 3,206,827 |  |
| NNPC E&P Limited | BB | 116 | 375,530 |  |
| NEPL /ELCREST | FB | 40 | 8,464,755 |  |
| NEPL/NECONDE | FB | 42 | 901,240 |  |
| NEPL /SHORELINE | FB | 30 | 10,877,069 |  |
| NEPL /ND WESTERN | FB | 34 | 4,087,482 |  |
| NNPC E&P Limited | FB | 34 | 226,885 |  |
| NEPL /FHN | FB | 26 | 2,260,970 |  |
| NNPC E&P Limited | FB | 65 | 1,409,995 |  |
| NNPC E&P Limited | FB |  | 151,372 |  |
| NNPC E&P Limited | FB | 98 | 604,169 |  |
| NNPC E&P Limited | FB | 111 | 2,686,896 |  |
| NNPC E&P Limited | EL | 98 | 210,879 |  |
| NUWAY | Nuway | PPL-219 | 57,716 |  |
| Oriental Energy Resources Limited | Ebok | 67 | 3,654,516 |  |

| Measurement Error | Refund/Production Adjustment | Theft/Sabotage | Terminal Adjustment | Fiscalized Production |
| --- | --- | --- | --- | --- |
| Bbls | Bbls | Bbls | Bbls | Bbls |
| - | 3,265 | - | - | 2,602,293 |
| (216,673) | - | 875,370 | - | 7,251,616 |
| - | - | - | - | 438,840 |
| - | - | 2,712 | - | 80,260 |
| - | 66 | - | - | 7,573,906 |
| 763,917 | 4,638 | 383,653 | - | 5,525,132 |
| - | 4,579 | - | - | 654,540 |
| - | - | - | - | 4,274,964 |
| - | (37,302) |  | - | 3,244,129 |
| - | - | 37,725 | 561 | 337,244 |
| 89,807 | - | (62,848) | - | 8,437,796 |
| 17,934 | 4,597 | 40,105 | - | 838,604 |
| 157,535 | (809,408) | 297,903 | - | 11,231,039 |
| 13,182 | 33,663 | 196,071 | - | 3,844,566 |
|  | (10,057) | 25,233 | - | 211,709 |
| 14,981 | 14,068 | 95,596 | - | 2,136,325 |
| 3,984 | 12,956 | 70,552 | - | 1,322,503 |
| - | (35,155) | 18,360 | - | 168,167 |
| - | 5,617 | 29,341 | - | 569,211 |
| - | - | 130,376 | - | 2,556,519 |
| - | - | 17,842 | - | 193,037 |
| - | - | - | - | 57,716 |
| - | - | - | - | 3,654,516 |
| Pan Ocean Oil Corporation(Nigeria) | FB | 147 | 796,433 |  |
| EL | 147 | 69,713 |  |  |
| Petralon 54 Limited | Ajapa | 54 | 46,969 |  |
| Pillar Oil Limited | FB | 56 | 1,396,893 |  |
| BB | 56 | 31,566 |  |  |
| Platform Petroleum Ltd | FB | 38 | 1,028,616 |  |
| BB | 38 | - |  |  |
| Sterling Oil Exploration and Energy Production Co. Ltd | Okwui | 143 | 17,736,198 |  |
| Sterling Global Oil Resource Limited | Okwui | 146 | 3,139,918 |  |
| Seplat Energy | FB | 4/38/41/49/53 | 5,578,620 |  |
| EL | 6,442,837 |  |  |  |
| BL | 944,749 |  |  |  |
| Shell Nigeria Exploration Production Company | Bonga | 118 | 45,548,252 |  |
| Shell Production Development Company | FB | 11/20/21/22/23/27/28/32/35/43/45/46/55/79 | 34,248,210 |  |
| EA | 6,325,996 |  |  |  |
| BL | 11,200,232 |  |  |  |
| BB | 1,495,671 |  |  |  |
| Stardeep Water Limited | Agbami | 127/128 | 35,676,927 |  |
| Tenoil Pet. & Energy Services Ltd/Clayford | Ajapa | 41 | 103,373 |  |
| TotalEnergies E&P Limited | BL | 58/99 | 5,139,919 |  |

| Measurement Error Bbls | Refund/Production Adjustment Bbls | Theft/Sabotage Bbls | Terminal Adjustment Bbls | Fiscalized Production Bbls |
| --- | --- | --- | --- | --- |
| - | 8,136 | 37,839 | -- | 750,458 |
| - | - | 2,809 | - | 66,904 |
| - | - | - | - | 46,969 |
| 31 | 9,941 | 58,955 | - | 1,327,966 |
| - | - | 2,891 | - | 28,675 |
| - | 8,593 | 48,516 | -- | 971,507 |
| - | - | - | - |  |
| - | - | - | - | 17,736,198 |
| - | - | - | - | 3,139,918 |
| - | (267,906) | 586,271 | - | 5,260,255 |
| - | - | 422,185 | - | 6,020,652 |
| - | - | - | - | 944,749 |
| - | - | - | - | 45,548,252 |
| 566,043 | 603,956 | 68,611 | - | 33,009,600 |
| - | - | - | - | 6,325,996 |
| 644,783 | 6,351 | 335,424 | - | 10,213,674 |
| 1,497 | - | 139,437 | - | 1,354,737 |
| - | - | - | - | 35,676,927 |
| - | - | - | - | 103,373 |
| 59,373 | 2,584 | 339,994 | - | 4,737,968 |

* * *

| Producers | Crude Type | Asset Number | Metered Production at Flow Station Bbls | Measurement Error Bbls | Refund/Production Adjustment Bbls | Theft/Sabotage Bbls | Terminal Adjustment Bbls | Fiscalized Production Bbls |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Amenam | 100/102 | 36,146,088 | - | (2) | - | - | 36,146,090 |
| TotalEnergies Upstream | Egina | 130 | 33,934,195 | - | - | - | - | 33,934,195 |
| Akpo | 130 | 25,217,700 | - | - | - | - | 25,217,700 |  |
| Universal/Savannah Energy | QIB | 14 | 698,411 | - | - | - | - | 698,411 |
| Waltersmith Petroman Ltd | BL | 157 | 565,496 | 386 | 261 | 308 | - | 564,541 |
| Total |  |  | 545,246,161 | 2,909,677 | (488,627) | 5,252,392 | 1,881 | 537,570,838 |

Source: NEITI 2022- 2023 OGA, 2024 (Companies' Hydrocarbon Flows Template and NUPRC Reconciled Sign-Off Document)

* * *

# 3.2.1.1. Federation Entitlement to JV Crude Oil Production

The JV production was 257.055 million barrels in 2023 compared to 218.190 million barrels in 2022. This was an increase of 38.864 million barrels (17.81%). Table below shows the share of JV production.

* * *

Table 27: NNPC Limited Entitlement to JV Production

| Descriptions | Total JV Production |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| 2023 | 2022 | Change |  | Equity |  |
| mbbls | mbbls | mbbls | % |  |  |
| Aiteo | 4,250 | 256 | 3,994 | 1559% |  |
| Belema | 62 | 165 | (102) | -62% |  |
| Chevron | 52,561 | 52,529 | 31 | 0% |  |
| Eroton | - | 205 | (205) | -100% |  |
| First E&P | 15,140 | 15,417 | (276) | -2% |  |
| Heirs Holding | 7,293 | 1,648 | 5,645 | 343% |  |
| Mobil | 58,910 | 65,293 | (6,383) | -10% |  |
| NAOC | 7,252 | 5,856 | 1,396 | 24% |  |
| Seplat | 12,226 | 12,648 | (422) | -3% |  |
| SPDC | 50,904 | 33,221 | 17,683 | 53% |  |
| TEPNG | 40,884 | 29,650 | 11,234 | 38% |  |
| Newcross E&P | 7,574 | 1,303 | 6,271 | 481% |  |
| Total | 257,055 | 218,190 | 38,864.50 | 18% |  |

| Federation Share |  |  | Company Share |  |  |
| --- | --- | --- | --- | --- | --- |
| Entity Interest % | 2023 mbbls | 2022 mbbls | Equity Interest % | 2023 mbbls | 2022 mbbls |
| 55% | 2,337 | 141 | 45% | 1,912 | 115 |
| 60% | 37 | 99 | 40% | 25 | 66 |
| 60% | 31,536 | 31,518 | 40% | 21,024 | 21,012 |
| 55% | - | 113 | 45% | - | 92 |
| 60% | 9,084 | 9,250 | 40% | 6,056 | 6,167 |
| 55% | 4,011 | 906 | 45% | 3,282 | 741 |
| 60% | 35,346 | 39,176 | 40% | 23,564 | 26,117 |
| 60% | 4,351 | 3,514 | 40% | 2,901 | 2,342 |
| 60% | 7,335 | 7,589 | 40% | 4,890 | 5,059 |
| 55% | 27,997 | 18,271 | 45% | 22,907 | 14,949 |
| 60% | 24,530 | 17,790 | 40% | 16,354 | 11,860 |
| 55% | 4,166 | 717 | 45% | 3,408 | 586 |
|  | 150,732 | 129,083 |  | 106,323 | 89,108 |

Source: NEITI 2022- 2023 OGA, 2024 (Companies' Hydrocarbon Flows Template and NUPRC Reconciled Sign-Off Document)

* * *

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

| Description | Measurement Error | Refund/Production Adjustment | Theft/Sabotage | Total |
| --- | --- | --- | --- | --- |
| mmbbls | mmbbls | mmbbls | mmbbls |  |
| NUPRC NEITI Submission | - | 3.35 | 4.37 | 7.72 |
| NUPRC Signed-off Report | 2.91 | (0.49) | 5.25 | 7.68 |

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 7.68 million barrels which was 3.33% of the total metered production at the
flow station (7.675 million barrels) for the affected companies and crude type. The losses
resulted from 2.910 million barrels measurement error (1.3%), 5.252 million barrels theft and
sabotage (2.3%) and -486.746 thousand barrels production/terminal adjustment (0.21%). 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 Type | Metered Production at Flow Station Bbls | Measured Bbls |
| --- | --- | --- | --- |
| Aradel Holdings PLC | BL | 3,560,368 | 579,421 |
| AMNI International Petroleum Development Company | Okoro | 2,333,571 | 1,969,000 |
| Antan Producing Ltd | Antan | 3,789,658 | 1,969,000 |
| Belema Oil Company Limited | BL | 62,453 | 1,969,000 |
| BRITANNIA U | Ajapa | 145,284 | 1,969,000 |
| Chevron Nigeria Ltd | FB | 444,346 | 1,969,000 |
| Chorus Energy Ltd | FB | 321,254 | 1,969,000 |
| Continental Oil and Gas | Pen | 2,846,025 | 1,969,000 |
| Dubri Oil Limited | EL | 60,395 | 1,969,000 |

| Measurement Error |  | Refund/ Production Adjustment |  | Theft/Sabotage |  |
| --- | --- | --- | --- | --- | --- |
| Bbls | % | Bbls | % | Bbls | % |
| 7,719 | 0.16% | - | 0.00% | 105,133 | 2.95% |
| - | 0.00% | (2,297) | -0.10% | - | 0.00% |
| 119,119 | 0.03% | - | 0.00% | - | 0.00% |
| 37 | 0.06% | - | 0.00% | - | 0.00% |
| - | 0.00% | 1,320 | 0.91% | - | 0.00% |
| - | 0.00% | (103,197) | -23.22% | 53,896 | 12.13% |
| - | 0.00% | 2,310 | 0.72% | 14,451 | 4.50% |
| - | 0.00% | 22,085 | 0.78% | - | 0.00% |
| - | 0.00% | 4,174 | 6.91% | - | 0.00% |

* * *

| Producers | Crude Type | Metered Production at Flow Station Bbls | Means 10% |
| --- | --- | --- | --- |
| Enageed Resource Limited | FB | 1,033,043 |  |
| Energia Limited | FB | 1,331,659 |  |
| EXCEL E&P | FB | 929,765 |  |
| Esso E&P Nigeria Limited ERHA | Erha | 23,446,692 |  |
| GREEN ENERGY | Otaki | 3,320,000 |  |
| HEIRS ENERGY | BL | 8,686,917 | 7.8 |
| Midwestern Oil and Gas Limited | FB | 3,334,855 |  |
| Mobil Producing Nigeria Unlimited | Yoho | 10,739,482 |  |
| Nigerian Agip Exploration | Abo | 2,605,558 |  |
| Nigerian Agip Oil Company | BB | 7,910,313 | (2.1) |
| Newcross Petroleum Limited | FB | 82,972 |  |
| Newcross E&P Ltd | BL | 7,573,972 |  |
| NNPC E&P Ltd | BL | 6,677,340 | 7.1 |
| NEPL/NECONDE | Pen | 659,119 |  |
| NNPC E&P Ltd | Okono | 3,206,827 |  |
| NNPC E&P Ltd | BB | 375,530 |  |
| NEPL /ELCREST | FB | 8,464,755 |  |
| NEPL/NECONDE | FB | 901,240 |  |
| NEPL/SHORELINE | FB | 10,877,069 | 1.1 |
| NEPL/ND WESTERN | FB | 4,087,482 |  |
| NNPC E&P Ltd | FB | 226,885 |  |
| NEPL/FHN | FB | 2,260,970 |  |
| NNPC E&P Limited | FB | 4,313,908 |  |
| EL | 749,403 |  |  |
| Pan Ocean Oil Corporation | FB | 796,433 |  |
| EL | 69,713 |  |  |
| Pillar Oil Limited | FB | 1,238,781 |  |
| BB | 31,566 |  |  |
| Platform Petroleum Limited | FB | 1,028,616 |  |
| Seplat Energy | FB | 5,578,620 |  |
| EL | 6,442,837 |  |  |
| Shell Production Development Co. | FB | 34,248,210 | 5.2 |
| BL | 11,200,232 | 6.1 |  |
| BB | 1,495,671 |  |  |
| TotalEnergies E&P Limited | BL | 5,139,919 |  |
| Amenam | 36,146,088 |  |  |

| Measurement Error |  | Refund/Production Adjustment |  | Theft/Sabotage |  |
| --- | --- | --- | --- | --- | --- |
| Bbls | % | Bbls | % | Bbls | % |
| - | 0.00% | - | 0.00% | 46,713 | 4.52% |
| - | 0.00% | 8,907 | 0.67% | 57,016 | 4.28% |
| 113,203 | 1.42% | (16,141) | -1.74% | (4,949) | -0.53% |
| - | 0.00% | 11 | 0.00% | - | 0.00% |
| - | 0.00% | 243 | 0.01% | - | 0.00% |
| 72,819 | 8.90% | - | 0.00% | 621,267 | 7.15% |
| - | 0.00% | 31,728 | 0.95% | 157,633 | 4.73% |
| - | 0.00% | 109 | 0.00% | - | 0.00% |
| - | 0.00% | 3,265 | 0.13% | - | 0.00% |
| (6,673) | -2.74% | - | 0.00% | 875,370 | 11.07% |
| - | 0.00% | - | 0.00% | 2,712 | 3.27% |
| - | 0.00% | 66 | 0.00% | - | 0.00% |
| 63,917 | 11.44% | 4,638 | 0.07% | 383,653 | 5.75% |
| - | 0.00% | 4,579 | 0.69% | - | 0.00% |
| - | 0.00% | (37,302) | -1.16% | - | 0.00% |
| - | 0.00% | 561 | 0.15% | 37,725 | 10.05% |
| 89,807 | 1.06% | - | 0.00% | (62,848) | -0.74% |
| 117,934 | 1.99% | 4,597 | 0.51% | 40,105 | 4.45% |
| 57,535 | 1.45% | (809,408) | -7.44% | 297,903 | 2.74% |
| 113,182 | 0.32% | 33,663 | 0.82% | 196,071 | 4.80% |
| - | 0.00% | (10,057) | -4.43% | 25,233 | 11.12% |
| 14,981 | 0.66% | 14,068 | 0.62% | 95,596 | 4.23% |
| 3,984 | 0.09% | (16,582) | -0.38% | 224,730 | 5.21% |
| - | 0.00% | - | 0.00% | 41,742 | 5.57% |
| - | 0.00% | 8,136 | 1.02% | 37,839 | 4.75% |
| - | 0.00% | - | 0.00% | 2,809 | 4.03% |
| 31 | 0.00% | 9,941 | 0.80% | 58,955 | 4.76% |
| - | 0.00% | - | 0.00% | 2,891 | 9.16% |
| - | 0.00% | 8,593 | 0.84% | 48,516 | 4.72% |
| - | 0.00% | (267,906) | -4.80% | 586,271 | 10.51% |
| - | 0.00% | - | 0.00% | 422,185 | 6.55% |
| 66,043 | 1.65% | 603,956 | 1.76% | 68,611 | 0.20% |
| 44,783 | 5.76% | 6,351 | 0.06% | 335,424 | 2.99% |
| 1,497 | 0.10% | - | 0.00% | 139,437 | 9.32% |

* * *

| Producers | Crude Type | Metered Production at Flow Station | Measurement Error |  | Refund/ Production Adjustment |  | Theft/Sabotage |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Bbls | Bbls | % | Bbls | % | Bbls | % |  |  |
| Waltersmith Petroman Limited | BL | 10,642 | 386 | 3.63% | 261 | 2.45% | 308 | 2.89% |
| Total |  | 230,786,439 | 2,909,677 | 1.26% | (486,746) | -0.21% | 5,252,392 | 2.28% |

Source: NEITI 2022- 2023 OGA, 2024 (Companies' Hydrocarbon Flows Templates)

Crude losses were 7.68 million barrels in 2023, compared to 36.69 million barrels in 2022. This
dropped by 79% (29.02 million barrels). This underscores the positive impact of government
initiatives aimed at reducing crude oil losses, enhancing operational efficiency, and improving
accountability within the sector. However, considering the proven crude oil reserves in the
country, there is need to ramp up production capacity to 2013 annual average of 800 million
barrels through forensic audit of the Wellheads and production platforms.

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

Source: 2013 – 2021 NEITI OGA Reports; 2022-2023 NEITI OGA, 2024

| Description | Schedule | Unscheduled | Total |
| --- | --- | --- | --- |
| mmbbls | mmbbls | mmbbls |  |
| NUPRC NEITI Submission | 84.31 | - | 84.31 |
| Companies NEITI Submission | 43.56 | 67.10 | 110.66 |
| Source:NEITI2022-2023OGA,2024DefermentProductionTemplates) |  |  |  |

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.

* * *

Based on companies’ submission, the total crude oil production deferment was 110.66 million
barrels, comprising 43.56 million barrels (39.36%) scheduled, and 67.10 million barrels
(60.64%) 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 Deferred | Unscheduled Deferred | Total |
| --- | --- | --- | --- |
|  | Barrels | Barrels | Barrels |
| ALL GRACE | 4 | 12,516 | 12,520 |
| AITEO | 8,002,060 | - | 8,002,060 |
| ADDAX\_ANTAN | 2,262,826 | - | 2,262,826 |
| CHEVRON | 5,577,850 | - | 5,577,850 |
| FIRST E&P | 950,899 | - | 950,899 |
| HEIRS | 46,028 | - | 46,028 |
| MONIPULO | 258,906 | - | 258,906 |
| NEWCROSS E & P | 5,602,320 | - | 5,602,320 |
| NEPL 119 | - | 2,361,987 | 2,361,987 |
| NEPL 11 | 761,338 | 3,453,923 | 4,215,261 |
| NEPL 49/51 | - | 183,536 | 183,536 |
| NEPL 40 | 371,400 | 2,811,971 | 3,183,371 |
| NEPL 28/30 | - | 224,046 | 224,046 |
| NEPL SEPLAT JV | 461,408 | 3,395,449 | 3,856,857 |
| NEPL 42 | - | 6,092,571 | 6,092,571 |
| NEPL NAOC JV | - | 6,870,779 | 6,870,779 |
| NEPL- (OML 38/49) | - | 499,491 | 499,491 |
| NEPL 30 | 1,556,120 | 4,991,160 | 6,547,280 |
| NEPL 65 | - | 2,581,418 | 2,581,418 |
| NEPL 98 | - | 11,000 | 11,000 |
| NEPL 86/88 | - | 54,764 | 54,764 |
| NEPL 34 | - | 1,414,102 | 1,414,102 |
| NEPL 26 | - | 1,626,028 | 1,626,028 |
| NEPL 111 | - | 1,445,404 | 1,445,404 |
| ORIENTAL ENERGY | 317,744 | 204,623 | 522,367 |
| PILLAR | 48,605 | 519,032 | 567,637 |
| PLATFORM | - | 630,287 | 630,287 |
| SNEPCO | 2,045,327 | - | 2,045,327 |
| SPDC | 8,038,635 | 27,717,689 | 35,756,324 |
| TEPNG | 4,481,880 | - | 4,481,880 |
| TUPNI | 2,777,949 | - | 2,777,949 |
| TOTAL | 43,561,300 | 67,101,776 | 110,663,076 |

Source: NEITI 2022- 2023 OGA, 2024 (Companies' Hydrocarbon Flows Templates)

* * *

Deferred Crude oil production was 110.663 million barrels in 2023, compared to 153.4 million
barrels in 2022. This dropped by 28% (42.78 million barrels). This implies lesser delay in
production compared to 2022, due to 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)

Source: 2013 – 2021 NEITI OGA Reports; 2022-2023 NEITI OGA, 2024

* * *

3.2.2. Gas Production

Total gas production was 2.491 trillion SCF in 2023, comparing 2.521 trillion SCF in 2022.
Gas production dropped by 29.801 billion SCF (1%) from 2022 to 2023.

A five (5) year trend (2019 - 2023) of gas production in Nigeria shows that the highest
production volumes of 3.048 trillion SCF was in 2019 and the lowest of 2.491 trillion SCF was
in 2023. This implied that the country’s production capacity in 2023 was at 81.75% (82.73%

in 2023. This implied that the country’s production capacity in 2023 was at 81.75% (82.73%
in 2022) efficiency based on the 2019 gas production volume. The 18.25% 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.

in 2023. This implied that the country’s production capacity in 2023 was at 81.75% (82.73%
in 2022) efficiency based on the 2019 gas production volume. The 18.25% 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

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

Figure 6: Gas Production - Million SCF (MMSCF)

Source: 2013 – 2021 NEITI OGA Reports; 2022-2023 NEITI OGA, 2024

Total metered production at flow station of 2.491 trillion SCF in 2023 comprises 141.147
billion SCF (6%) as fuel, 545.591 billion SCF (229%) was re-injected and 123.651 billion SCF
(5%) as shrinkage/ lift gas. Others are 183.408 billion SCF (7%) as gas flare and 1.498 trillion
SCF (60%) as gas sales as shown in the table below.

* * *

Table 32: Gas Production by Companies on Asset Basis

| Producers | Assets | Metered Production(Mmscf) | F(%) |
| --- | --- | --- | --- |
| Aiteo Eastern E&P Limited | 29 | 4,641 |  |
| All Grace Energy | 17 | 208 |  |
| Amalgamated Oil and Gas Company | 156 | 3,996 |  |
| Amni International Petroleum Dev. | 112 | 2,351 |  |
| Antan Producing Limited | 123 | 15,862 |  |
| 124 | 1,548 |  |  |
| 126 | 4,121 |  |  |
| Belema Oil Company Limited | 55 | 116 |  |
| Britania-U | 90 | 94 |  |
| Chevron Nigeria Limited | 49 | 46,437 |  |
| 90 | 114,396 |  |  |
| 91 | 61,019 |  |  |
| 95 | 36,277 |  |  |
| EGP | - |  |  |
| EGTL | - |  |  |
| Stardeep Water Petroleum Limited | 127 | 153,044 |  |
| Chorus Energy | 56 | 3,968 |  |
| Consolidated Oil and Gas | 103 | 124 |  |
| Continental Oil and Gas | 59 | 2,519 |  |
| Dubri Oil Limited | 96 | 669 |  |
| Enageed Resource Ltd | 111 | 947 |  |
| Energia Limited | 56 | 6,886 |  |

| Fuel Gas (Mmscf) | Gas Lift(Mmscf) | Gas Re-Injection(Mmscf) | Sales Gas(Mmscf) | Shrinkage(Mmscf) | Gas Flared(Mmscf) |
| --- | --- | --- | --- | --- | --- |
| 44 | - | - | 1,780 | - | 2,817 |
| - | - | - | - | - | 208 |
| 15 | - | - | 3,981 | - | 0 |
| 104 | - | 1,667 | - | - | 579 |
| 590 | 3,849 | - | - | - | 11,423 |
| 70 | 1,017 | - | - | - | 462 |
| 341 | 707 | 45 | - | - | 3,029 |
| 65 | - | - | - | - | 51 |
| 64 | - | - | - | - | 30 |
| 4,357 | 14,656 | - | - | - | 5,723 |
| 2,913 | 1,652 | - | - | - | 5,886 |
| 52 | - | - | - | - | - |
| 3,133 | 21,722 | - | - | - | 1,390 |
| 12,770 | - | - | 122,105 | - | 1,317 |
| - | - | - | 59,869 | - | 583 |
| 7,928 | - | 141,835 | - | - | 3,281 |
| 38 | - | - | 628 | - | 3,302 |
| 73 | - | - | - | - | 51 |
| 237 | - | - | - | - | 2,282 |
| 8 | - | - | - | - | 661 |
| 88 | - | - | - | - | 859 |
| 85 | - | - | 4,239 | - | 2,562 |
| Esso Exploration and Prod. Nig Ltd Erha | 133 | 93,204 |  |  |  |
| Esso Exploration and Prod. Nig Ltd Usan | 138 | 57,660 |  |  |  |
| EXCEL E&P Limited | 46 | 182 |  |  |  |
| First Exploration & Petroleum Dev Co.Ltd | 83&85 | 9,182 |  |  |  |
| Frontier Oil Limited | 13 | 47,107 |  |  |  |
| General Hydrocarbon | 120 | 2,034 |  |  |  |
| Green Energy International | 11 | 1,991 |  |  |  |
| Heirs Energies | 17 | 13,667 |  |  |  |
| Midwestern Oil and Gas | 56 | 800 |  |  |  |
| Millenium Oil and Gas | 11 | 478 |  |  |  |
| Mobil Producing Nigeria Unlimited | 67 | 146,026 |  |  |  |
| 68 | 17,533 |  |  |  |  |
| 70 | 71,199 |  |  |  |  |
| 104 | 66,318 |  |  |  |  |
| QIT | 5,782 |  |  |  |  |
| BRT | - |  |  |  |  |
| EAP | - |  |  |  |  |
| Monipulo Limited | 114 | 193 |  |  |  |
| Network E&P | 13 | 924 |  |  |  |
| Newcross E&P Limited | 24 | 6,486 |  |  |  |
| Newcross Petroleum Limited | 152 | 7,478 |  |  |  |
| Nigerian Agip Energy | 125 | 10,456 |  |  |  |
| Nigerian Agip Oil Company | 60 | 11,477 |  |  |  |
| 61 | 164,910 |  |  |  |  |

| Fuel Gas (Mmscf) | Gas Lift(Mmscf) | Gas Re-Injection(Mmscf) | Sales Gas(Mmscf) | Shrinkage(Mmscf) | Gas Flared(Mmscf) |
| --- | --- | --- | --- | --- | --- |
| 6,951 | 3,919 | 77,342 | - | - | 4,992 |
| 4,667 | 14,946 | 33,161 | 709 | - | 4,176 |
| 98 | 2 | - | - | - | 82 |
| 618 | - | - | - | - | 8,565 |
| 105 | - | - | 46,731 | - | 270 |
| 1 | - | - | - | - | 2,033 |
| - | - | - | - | - | 1,991 |
| 813 | - | - | 10,001 | - | 2,853 |
| 61 | - | - | - | - | 739 |
| - | - | - | - | - | 478 |
| 642 | 14,829 | 109,857 | - | - | 4,082 |
| 34 | 3,748 | 7,802 | - | - | 53 |
| 13,601 | 15,865 | 15,375 | 6,828 | - | 6,287 |
| 2,921 | - | 59,520 | - | - | 3,877 |
| 1,060 | - | - | - | - | 4,722 |
| 1,360 | - | - | 13,656 | - | 311 |
| 10,168 | - | - | 7,166 | - | 3,094 |
| 16 | - | - | - | - | 177 |
| 36 | - | - | - | - | 888 |
| 124 | - | - | 3,165 | - | 3,197 |
| - | - | - | 7,478 | - | - |
| 925 | - | 5,571 | - | - | 3,961 |
| 2,079 | - | 240 | 21,195 | 2,500 | 2,719 |
| 11,532 | - | 595 | 138,429 | 2,036 | 5,929 |
|  | 63 | 15,202 |  |  |  |
| NNPC E&P Limited | 11 | 55,546 |  |  |  |
| NNPC E&P Limited(Oghareki) | 49 | 1,042 |  |  |  |
| NNPC E&P Limited | 65 | 729 |  |  |  |
| 98 | 6,934 |  |  |  |  |
| 111 | 32,695 |  |  |  |  |
| 116 | 2,313 |  |  |  |  |
| 119 | 5,144 |  |  |  |  |
| NNPC EIGTEEN LIMITED | 18 | 7,428 |  |  |  |
| Oriental Energy Resource Limited | 67 | 5,253 |  |  |  |
| Pan Ocean Oil Cooperation | 147 | 10,085 |  |  |  |
| Pillar Oil Limited | 56 | 648 |  |  |  |
| Platform Petroleum Limited | 38 | 10,445 |  |  |  |
| Seplat Energy Plc | 4 | 80,500 |  |  |  |
| 38 | 16,546 |  |  |  |  |
| 41 | 2,602 |  |  |  |  |
| Seplat Energy(Oghareki) | 49 | 1,536 |  |  |  |
| Seplat Energy Plc | 53 | 892 |  |  |  |
| Shell Petroleum Development Company | 11 | 2,286 |  |  |  |
| 23 | 33,619 |  |  |  |  |
| 27 | 4 |  |  |  |  |
| 28 | 253,907 |  |  |  |  |
| 32 | 82 |  |  |  |  |
| 35 | 2,515 |  |  |  |  |
| 43 | 5,444 |  |  |  |  |
| 45 | 13,066 |  |  |  |  |

| Fuel Gas (Mmscf) | Gas Lift(Mmscf) | Gas Re-Injection(Mmscf) | Sales Gas(Mmscf) | Shrinkage(Mmscf) | Gas Flared(Mmscf) |
| --- | --- | --- | --- | --- | --- |
| 2,743 | - | 47 | - | - | 1,546 |
| 1,160 | - | - | 51,194 | - | 3,193 |
| 12 | - | - | - | - | 1,030 |
| - | - | - | - | - | 729 |
| - | - | - | 6,743 | - | 191 |
| 1,773 | - | - | 26,145 | - | 4,778 |
| 110 | - | - | - | - | 2,204 |
| 698 | - | - | - | - | 4,446 |
| 102 | - | - | 7,209 | - | 116 |
| 1,310 | 2,841 | - | - | - | 1,101 |
| 650 | - | - | 8,375 | - | 1,060 |
| 101 | - | - | 280 | - | 266 |
| 24 | - | - | 9,942 | - | 478 |
| 473 | - | - | 77,575 | - | 2,452 |
| 357 | - | - | 14,969 | - | 1,220 |
| 71 | - | - | - | - | 2,532 |
| 39 | - | - | - | - | 1,497 |
| - | - | - | - | - | 892 |
| 45 | - | - | 1,602 | - | 640 |
| 467 | - | - | 32,587 | - | 564 |
| 0 | - | - | - | - | 4 |
| 3,316 | - | - | 247,858 | - | 2,733 |
| 2 | - | - | 50 | - | 30 |
| 39 | - | - | 1,551 | - | 925 |
| 284 | 2,639 | - | 1,270 | - | 1,251 |
| 1,497 | 656 | - | 5,190 | - | 5,723 |

* * *

| Producers | Assets | Metered Production(Mmscf) | Hours(hrs) |
| --- | --- | --- | --- |
|  | 46 | 26,704 |  |
| 79 | 10,862 |  |  |
| Shell Nigeria Exploration&Production Co.Ltd | 118 | 32,566 |  |
| Total Energies E&P | 58 | 110,231 |  |
| 99 | 153,745 |  |  |
| 100 | 2,275 |  |  |
| 102 | 18,771 |  |  |
| Total Energies Upstream | 130 | 187,178 |  |
| Universal Energy | 14 | 558 |  |
| Waltersmith Petroman | 157 | 449 |  |
| Aradel Energy Plc | 54 | 9,691 |  |
| NEPL-ND WESTERN | 34 | 98,864 |  |
| NEPL-SHORELINE | 30 | 14,531 |  |
| NEPL-FHN | 26 | 3,928 |  |
| NEPL-ELCREST | 40 | 3,957 |  |
| NEPL-NECONDE | 42 | 4,617 |  |
| Sterling Oil Exploration and Energy Production Company Limited | 143 | 51,632 |  |
| Sterling Global Oil Resource Limited | 146 | 150 |  |
| Grand Total |  | 2,491,481 |  |

| Fuel Gas (Mmscf) | Gas Lift(Mmscf) | Gas Re-Injection(Mmscf) | Sales Gas(Mmscf) | Shrinkage(Mmscf) | Gas Flared(Mmscf) |
| --- | --- | --- | --- | --- | --- |
| 1,268 | - | - | 23,952 | - | 1,483 |
| 2,619 | 4,843 | - | 850 | - | 2,551 |
| 3,503 | - | - | 28,410 | - | 653 |
| 2,739 | - | - | 106,713 | - | 780 |
| 5,280 | - | 38,598 | 107,902 | - | 1,965 |
| 809 | - | - | 154 | - | 1,312 |
| 2,748 | - | - | 13,732 | 1,862 | 429 |
| 10,540 | 515 | 53,937 | 119,230 | - | 2,957 |
| 4 | - | - | 37 | - | 517 |
| 0 | 298 | - | - | - | 151 |
| 431 | - | - | 9,193 | - | 67 |
| 202 | - | - | 96,622 | - | 2,040 |
| 3,197 | 7,699 | - | - | - | 3,636 |
| 139 | 452 | - | - | - | 3,337 |
| 28 | - | - | - | - | 3,929 |
| 364 | - | - | 231 | - | 4,022 |
| 1,089 | 376 | - | 50,160 | - | 7 |
| 123 | 25 | - | - | - | 2 |
| 141,147 | 117,254 | 545,591 | 1,497,684 | 6,397 | 183,408 |

Source: NEITI 2022- 2023 OGA, 2024 (Companies' Gas Production and Utilisation Templates and NURPC Gas Production Templat

* * *

3.2.2.1. Federation Entitlement to Gas Production

The total JV gas production in 2023 was 1.534 trillion SCF, comparing 1.609 trillion SCF in
2022\. There was a decrease of 75.730 billion SCF (5%) despite increase in JV crude oil
production. The decrease could have been due to gas production deferment but no information
on any increase in gas production deferment. Table below shows the share of JV gas production.

Table 33: NNPC Limited Entitlement from JV Production

| Company | Total JV MMSCF |
| --- | --- |
| SPDC | 348,489.80 |
| AITEO | 4,640.58 |
| EROTON(NNPC18Ltd) | 7,427.64 |
| NEWCROSSE&P | 6,486.26 |
| CHEVRON(CNL) | 258,128.85 |
| NAOC | 191,589.40 |
| MPNU | 306,857.58 |
| TEPNG | 285,022.63 |
| BELEMAOIL | 115.98 |
| SEPLAT | 102,075.70 |
| FIRSTE&P | 9,182.29 |
| HEIRS | 13,666.72 |
| Total | 1,533,683.44 |

| Interest |  | Interest |  |
| --- | --- | --- | --- |
| NNPC% | JVPartners% | NNPCMMSCF | JVPartnersMMSCF |
| 55% | 45% | 191,669.39 | 156,820.41 |
| 55% | 45% | 2,552.32 | 2,088.26 |
| 55% | 45% | 4,085.20 | 3,342.44 |
| 55% | 45% | 3,567.44 | 2,918.82 |
| 60% | 40% | 154,877.31 | 103,251.54 |
| 60% | 40% | 114,953.64 | 76,635.76 |
| 60% | 40% | 184,114.55 | 122,743.03 |
| 60% | 40% | 171,013.58 | 114,009.05 |
| 60% | 40% | 69.59 | 46.39 |
| 60% | 40% | 61,245.42 | 40,830.28 |
| 60% | 40% | 5,509.37 | 3,672.92 |
| 55% | 45% | 7,516.69 | 6,150.02 |
|  |  | 901,174.51 | 632,508.92 |

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

Gas Flare

Total gas flaring in 2023 amounted to 183.408 billion SCF, marking a decrease from the
188.483 billion SCF recorded in 2022. This decline of 5.075 billion SCF (2.7%) can be
attributed to several factors, including government interventions targeting gas flaring
reduction, economic strategies promoting gas utilization in power generation, and international
commitments related to climate change.

* * *

A ten-year trend indicates that the highest level of gas flaring occurred in 2017, at 355 billion
SCF, while 2023 recorded the lowest level at 183.408 billion SCF, as illustrated in the figure
below.

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

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

Un-accounted, Shrinkage and Lift Gas

Total shrinkage and lift gas in 2023 reached 123.651 billion SCF, a decrease from the 139.124
billion SCF reported in 2022. This 15.473 billion SCF (11.1%) decrease lends credence to the
government efforts towards flare and loss elimination for gas in the sector. However, there is
need for intensify efforts towards zero gas emission.

A ten-year trend indicates that 2017 recorded the highest level of shrinkages and lift gas at 567
billion SCF, as illustrated in the figure below.

Figure 8: Ten (10) Year Trend of Un-Accounted Gas (Billion SCF)

* * *

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 534.159 million barrels in 2023, comparing 482.074 million barrels in
2022\. The 52.085 million barrels (11%) increase in total crude lifting is attributed to the rise in
fiscalised crude production, contrasting with the lower lifting volumes of 2022. This increase
is primarily due to a reduction in crude production deferment during the year. The table below
presents a detailed breakdown of the total crude lifting, highlighting the positive impact of
reduced deferment on overall production levels.

Total crude lifting was 534.159 million barrels in 2023, comparing 482.074 million barrels in
2022\. The 52.085 million barrels (11%) increase in total crude lifting is attributed to the rise in
fiscalised crude production, contrasting with the lower lifting volumes of 2022. This increase
is primarily due to a reduction in crude production deferment during the year. The table below
presents a detailed breakdown of the total crude lifting, highlighting the positive impact of
reduced deferment on overall production levels.

Table 34: Total Crude Lifting

| Description |  |
| --- | --- |
|  |  |
| Opening Stock |  |
| Total Fiscalised Production for the year |  |
|  |  |
| Total Stock available for Lifting |  |
|  |  |
| NNPC Lifting |  |
| Export Lifting: |  |
| Joint Venture |  |
| Production Sharing Contract |  |
| Marginal Fields |  |
| Service Contract |  |
|  |  |
| Subtotal-Export |  |
|  |  |
| Domestic Lifting(Refinery&DSDP) |  |
| Joint Venture |  |
| Production Sharing Contract |  |
| Marginal Field |  |
| Service Contract |  |
|  |  |
| Subtotal-Domestic |  |
|  |  |
| Total NNPC Lifting | D= |

| # | 2023mbbls | 2022mbbls | Changes% |  |
| --- | --- | --- | --- | --- |
|  |  | mbbls | % |  |
|  | 36,583 | 27,712 | 8,871 | 32% |
|  | 537,571 | 490,945 | 46,626 | 9% |
|  |  |  |  |  |
| A | 574,154 | 518,657 | 55,497 | 11% |
|  |  |  |  |  |
|  |  |  |  |  |
|  | 63,235 | 8,140 | 55,095 | 677% |
|  | 3,387 | - | 3,387 |  |
|  |  | - | - |  |
|  |  | - | - |  |
|  |  |  |  |  |
| B | 66,622 | 8,140 | 58,483 | 718% |
|  |  |  |  |  |
|  | 74,138 | 106,096 | (31,959) | -30% |
|  | 54,791 | 61,505 | (6,714) | -11% |
|  | 424 | 270 | 154 | 57% |
|  | 369 | - |  |  |
|  |  |  |  |  |
| C | 129,722 | 167,872 | (38,519) | -23% |
|  |  |  |  |  |
| B+C | 196,344 | 176,012 | 19,963 | 11% |
|  |  |  |  |  |
| Company Lifting |  |  |  |  |
| Joint Venture |  |  |  |  |
| Production Sharing Contract |  |  |  |  |
| Sole Risk |  |  |  |  |
| Marginal Fields |  |  |  |  |
|  |  |  |  |  |
| Total Company Lifting |  |  |  |  |
|  |  |  |  |  |
| Total Crude Oil Lifting | F= |  |  |  |
|  |  |  |  |  |
| Closing Stock | G= |  |  |  |

| # | 2023mbbls | 2022mbbls | Changesmbbls% |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | 119,004 | 97,260 | 21,744 | 22% |
|  | 136,229 | 147,027 | (10,798) | -7% |
|  | 58,786 | 47,147 | 11,639 | 25% |
|  | 23,796 | 14,628 | 9,167 | 63% |
|  |  |  |  |  |
| E | 337,815 | 306,063 | 31,752 | 10% |
|  |  |  |  |  |
| D+E | 534,159 | 482,074 | 51,716 | 11% |
|  |  |  |  |  |
| A-F | 39,994 | 36,583 | 3,781 | 10% |

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

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

Figure 9: Five-Year Trend of Crude Oil Lifting - mbbls- 2019-2023

Source: 2019- 2022 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 35: DSDP Tendering in 2023

| Summary of Bidding data |
| --- |
| Date of Advertisement |
| Number of Applicants |
| Number of Successful bidders |
| Date of Bid Opening |
| Date of Bid Evaluation |
| Start Date of Signing Contract |
| End Date of Signing Contract |

| DSDP |
| --- |
| 7-Dec-2020 |
| 213 |
| 17 |
| 21-Jan-2021 |
| 22-Jan-2021 |
| 1-Jul-2021 |
| 31-Jul-2021 |

Source: NEITI 2022-2023 OGA, 2024

Table below shows the key contract terms of successfully bidders for the DSDP arrangement
resulting from the tendering outcomes.

Table 36: Successful bidders for Direct Sales Direct Purchases (DSDP) in 2023

| # | Names Successful Bidders |
| --- | --- |
| 1 | DUKE OIL INCORPORATED |
| 2 | BP/AYM SHAFA |
| 3 | TOTSA/TOTAL |
| 4 | VITOL/ASHGROVE/JAK ENERGY SOLUTIONS |
| 5 | BONO ENERGY/CENTURY ENERGY AMAZON/CORDERO |
| 6 | MATRIX ENERGY/PETRA ATLANTIC/UTM OFFSHORE LTD./PRUDENT |
| 7 | SAHARA ENERGY RESOURCES |
| 8 | ASIAN OIL & GAS/MASTERS ENERGY/CASIVA LTD./CIMARON |
| 9 | EYRIE ENERGY/LEVENE/BOVAS/DK GLOBAL |
| 10 | MOCOH SA/MOCOH NIG. LTD./PENERO ENERGY LTD./MAINLAND OIL&GAS |
| 11 | MRS OIL&GAS |
| 12 | OANDO PLC. |

|  | Volumes Allocated(Bpd) | Term Contract Duration |  |  |
| --- | --- | --- | --- | --- |
| Effective Date | Expiry Date | Years |  |  |
|  | 12,087,627 | 1-Aug-21 | 30-Apr-23 | 3 |
|  | 14,611,604 | 1-Aug-21 | 30-Apr-23 | 3 |
|  | 4,411,385 | 1-Aug-21 | 30-Apr-23 | 3 |
|  | 9,968,968 | 1-Aug-21 | 30-Apr-23 | 3 |
|  | 13,739,535 | 1-Aug-21 | 30-Apr-23 | 3 |
|  | 10,483,180 | 1-Aug-21 | 30-Apr-23 | 3 |
|  | 6,344,294 | 1-Aug-21 | 30-Apr-23 | 3 |
|  | 10,189,676 | 1-Aug-21 | 30-Apr-23 | 3 |
|  | 12,095,265 | 1-Aug-21 | 30-Apr-23 | 3 |
|  | 11,319,707 | 1-Aug-21 | 30-Apr-23 | 3 |
|  | 10,437,592 | 1-Aug-21 | 30-Apr-23 | 3 |
|  | 6,144,147 | 1-Aug-21 | 30-Apr-23 | 3 |

* * *

| # | Names Successful Bidders | Volumes Allocated(Bpd) | Term Contract Duration |  |  |
| --- | --- | --- | --- | --- | --- |
| Effective Date | Expiry Date | Years |  |  |  |
| 13 | TRAFIGURA/AA RANO/EAST CROSS | 949,349 | 1-Aug-21 | 30-Apr-23 | 3 |
| 14 | MERCURIA/BARBEDOS/RAINOIL LTD./PETROGAS ENERGY | 4,094,884 | 1-Aug-21 | 30-Apr-23 | 3 |
| 15 | EMADEB/AY MAIKIFI/HYDE/BRITANNIA-U | 5,742,574 | 1-Aug-21 | 30-Apr-23 | 3 |
| 16 | LITASCO/PV OIL/OVERBROOKE RESOURCES/NORTHWEST PETROLEUM | 4,569,289 | 1-Aug-21 | 30-Apr-23 | 3 |
| 17 | COOLSPRING/AIDA ENERGY LTD/HEYDEN | 9,188,737 | 1-Aug-21 | 30-Apr-23 | 3 |

Source: NEITI 2022-2023 OGA, 2024

3.3.2.2. NNPC Limited Pricing of Crude Oil

NNPC Limited sold crudes to buyers through a competitive bidding process. The selling price
of crude oil are determined based on the selected pricing options of the buyer. This option could
be, prompt, deferred or advance which is based on the Official Selling Price (OSP) and average
of five (5) days dated Brent quotation from the Bill of Lading (B/L) date.

The annual average selling price of crude oil by NNPC Limited in 2023 was US$83.61 per
barrel, a decrease from US$103.63 per barrel in 2022. This decline can largely be attributed to
a general downturn in global oil prices throughout the review period, highlighting the need for
the government to implement strategies aimed at optimizing revenue generated from the oil
sector. Such measures are crucial for maintaining financial stability and ensuring sustainable
development in the face of volatile market conditions.

The 2023 monthly average selling price was highest of US$ 94.65/ barrel in September and
lowest of US$74.61/ barrel in June as shown in the Figure below.

Figure 10: 2022-2023 NNPC Limited Monthly Trend of Crude Oil Selling Prices

* * *

A global comparison of NNPC Limited monthly average crude oil selling prices in 2023 shows
that the crude prices are higher than other international institutional pricing frameworks for
seven (7) months – January, February, March, August, September, October and December. For
the other months (April, May June, July and November), NNPC Limited pricing was still
higher than the West Texas Intermediate (WTI) - Cushing, Oklahoma Spot Prices as shown in
the Figure below. This implies that NNPC Limited pricing framework was considerably not
below the global average, this gives further revenue assurances.

Figure 11: 2023 Monthly Global Comparison of NNPCL Crude Oil Selling Prices (US$/ Bbl)

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

NB:
-NNPCL:

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

2
WTI \_ Europe Brent: US Energy Information Administration:
[https://www.eia.gov/dnav/pet/pet\_pri\_spt\_s1\_m.htm](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](https://www.opec.org/basket/basketDayArchives.xml)

* * *

3.3.2.3. Crude Oil Sales and Proceeds

A total crude oil sold by NNPC Limited was US$6.467 billion in 2023, comparing US$18.106
billion in 2022. The US$1.639 billion is the impact of the increase in lifting because of
increased production despite the decrease in the annual average crude price. The table below
shows the value of the total crude sales.

Table 37: Crude Oil- Total Sales Value

| Beneficiary | 2023US$'000 |
| --- | --- |
|  |  |
| Federation | 2,328,688 |
| NNPC Limited | 11,348,447 |
| NUPRC | 1,449,088 |
| FIRS | 1,341,060 |
|  |  |
| Total | 16,467,282 |

| 2022US$'000 | ChangesUS$'000 |  |
| --- | --- | --- |
|  |  |  |
| 11,198,692 | (8,870,004) | -79% |
| 1,401,760 | 9,946,686 | 710% |
| 2,480,271 | (1,031,183) | -42% |
| 3,025,287 | (1,684,228) | -56% |
|  |  |  |
| 18,106,011 | (1,638,729) | -9% |

Source: NEITI 2022-2023 OGA, 2024

NNPC Limited sold a total of 196.344 million barrels of crude oil in 2023, comparing 176.012
million barrels in 2022. These sales were for NNPC Ltd in its capacity as the assignor of the
Federation JV assets, PSC profit oil for the Federation, and in-kind liftings for NUPRC and
FIRS. The Federation entitlement significantly dropped by 81.222 million barrels (74%) due
to the impact of the transfer of JV assets to NNPC Limited. Table below shows the quantity of
crude oil sold.

Table 38: Crude Oil- Total Sales Quantity

Source: NEITI 2022-2023 OGA, 2024

| Beneficiary | 2023 |  |
| --- | --- | --- |
| Quantity |  |  |
| mbbls |  |  |
|  |  |  |
| Federation | 28,091 |  |
| NNPC Limited | 135,727 |  |
| NUPRC | 16,751 |  |
| FIRS | 15,775 |  |
|  |  |  |
| Total | 196,344 |  |

| 2022 | Changes |  |
| --- | --- | --- |
| Quantitymbbls | Quantitymbbls | % |
|  |  |  |
| 109,313 | (81,222) | -74% |
| 13,432 | 122,296 | 911% |
| 23,472 | (6,722) | -29% |
| 29,795 | (14,020) | -47% |
|  |  |  |
| 176,012 | 20,333 | 12% |

* * *

3.3.2.4. Federation Export and Domestic Sales of Crude Oil

Federation crude sales proceeds in 2023 was US$2.329 billion, comparing to US$11.199
billion in 2022. This shows a significant decline of US$8.870 billion (79%) due to the impact
of the subrogation of JV assets to the NNPC Limited coupled with the decline in the annual
average crude selling price. Table below shows the total Federation Export and Domestic crude
sales value.

Table 39: Federation Export and Domestics Crude Sales Value

| Description | 2023 | 2022 | Changes |  |
| --- | --- | --- | --- | --- |
| US$'000 | US$'000 | US$'000 | % |  |
| Proceeds from the Sales of Federation JV Crude Oil-Export | 399 | 168,379 | (167,980) | -100% |
| Proceeds from the Sales of Federation JV Crude Oil-Domestic | - | 10,133,003 | (10,133,003) | -100% |
| Proceeds from the Sales of Profit Oil(PSC,SC&MF)-Export | 291,644 | 97,027 | 194,617 | 201% |
| Proceeds from the Sales of Profit Oil(PSC,SC&MF)-Domestic | 2,036,646 | 800,284 | 1,236,362 | 154% |
| Total | 2,328,688 | 11,198,692 | (8,870,004) | -79% |

Source: NEITI 2022-2023 OGA, 2024

Table 40: Federation Export and Domestics Crude Sales Quantity

| Description |
| --- |
| Proceeds from the Sales of Federation JV Crude Oil-Export |
| Proceeds from the Sales of Federation JV Crude Oil-Domestic |
| Proceeds from the Sales of Profit Oil(PSC,SC&MF)-Export |
| Proceeds from the Sales of Profit Oil(PSC,SC&MF)-Domestic |
| Total |

|  | 2023 | 2022 | Changes |  |
| --- | --- | --- | --- | --- |
|  | mbbls | mbbls | mbbls | % |
|  | 5 | 1,900 | (1,895) | -100% |
|  | - | 98,390 | (98,390) | -100% |
|  | 3,382 | 1,018 | 2,365 | 232% |
|  | 24,703 | 8,005 | 16,699 | 209% |
|  | 28,091 | 109,313 | (81,222) | -74% |

* * *

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$2.790 billion was the sales proceeds from In-kind payment for NUPRC and FIRS
in 2023, comparing US$5.506 billion in 2023. The decrease of US$2.715 billion (49%) means
that there was a decrease in the use of crude oil and gas to offset royalty, concession rent and
tax in 2023, as shown in the table below.

Table 41: In-Kind Payment on Crude Oil, Gas and Feedstock

| Beneficiary | 2023 |
| --- | --- |
| US$'000 |  |
| NUPRC |  |
| Concession Rent | - |
| Royalty Oil | 1,449,088 |
| Royalty Gas |  |
| Subtotal | 1,449,088 |
|  |  |
| FIRS |  |
| Tax Oil | 1,341,060 |
| Tax Gas |  |
| Subtotal | 1,341,060 |
|  |  |
| Total | 2,790,147 |

| 2022US$'000 | ChangesUS$'000 |  | % |
| --- | --- | --- | --- |
|  |  |  |  |
| 3,463 | (3,463) | -100% |  |
| 2,476,808 | (1,027,720) | -41% |  |
| - |  |  |  |
| 2,480,271 | (1,031,183) | -42% |  |
|  |  |  |  |
| 3,025,287 | (1,684,228) | -56% |  |
| - | - |  |  |
| 3,025,287 | (1,684,228) | -56% |  |
|  |  |  |  |
| 5,505,558 | (2,715,411) | -49% |  |

Source: NEITI 2022-2023 OGA, 2024

3.3.2.5.2. Cash Call Liability and Related Statutory Payments

A total of US$815.611 million was the cash liabilities in 2023, comparing US$1.301 billion in
2022 as shown in table below. The decline of US$485.57 million (37%) was due to repayment
through the Repayment Agreements. However, there is need for further review considering that
NNPC Limited.

| Description | 2023 | 2022 | Change |  |
| --- | --- | --- | --- | --- |
| US$ Million | US$ Million | US$ Million | % |  |
| Cash Call Liabilities | 815.61 | 1,301.18 | -485.57 | -37% |
| Source: NEITI 2022-2023 OGA, 2024 |  |  |  |  |

* * *

Furthermore, NNPC Limited claimed that reconciliation is ongoing with the NUPRC to
ascertain any 2023 outstanding liabilities. However, NUPRC is yet to confirm this position.

A total of US$243.74 million was taxes due to FIRS arsing from company income tax,
education tax as shown in the table below. NNPC limited indicated that application to use the
Tax Waivers Scheme credit to net-off the CIT while payments were in process for other tax
types. However, FIRS is yet to confirm this position.

Table 43: NNPC Limited Outstanding Liabilities

| Description | 2023 |  |
| --- | --- | --- |
| US$' Million | U.S. Dollars |  |
| Companies Income Tax | 69.88 |  |
| Education Tax | 159.92 |  |
| NASENI | 13.66 |  |
| Police Trust Levy | 0.27 |  |
| Total | 243.74 |  |

| 2022 | Change |  |
| --- | --- | --- |
| US$' Million | US$' Million | % |
| 587.12 | (517.24) | -88.10% |
| - | 159.92 | 100% |
| - | 13.66 | 100% |
| - | 0.27 | 100% |
| 587.12 | (343.38) | -58.49% |

* * *

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.

3.4.1. Gas Utilisation

A total of 141.147 billion SCF of gas was used as fuel in 2023, comparing 137.361 billion SCF
in 2022. Also, Gas sold was 1.498 trillion SCF in 2023, comparing 1.569 trillion SCF in 2022.
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

Source: 2019- 2022 NEITI OGA Reports, and NEITI 2022- 2023 OGA, 2024 (NURPC Gas
Production Templates)

* * *

3.4.2. Federation Entitlement from Gas Sales

A total of 1.027 trillion SCF was the gas sales in 2023 from JV production arrangement,
comparing 1,152 trillion SCF in 2022. The 124.721 billion SCF (10.83%) decline was due to
decrease in gas production and increase in fuel gas, lift and shrinkages. This does not justify
government initiative on “decade of gas.”

The 1.027 trillion SCF gas sales in 2023 from JV production arrangement comprises of 599.561
billion SCF (58.36%) to Federation and 427.796 billion SCF (41.64%) to JV partners as shown
in the table below.

Table 44: Federation Entitlement from Gas Sales

| Company | Total JV mmsef |
| --- | --- |
| SPDC | 314910 |
| AITEO | 1780 |
| EROTON(NNPC18Ltd) | 7209 |
| NEWCROSSE&P | 3165 |
| CHEVRON(CNL) | 181973 |
| NAOC | 159624 |
| MPNU | 27651 |
| TEPNG | 228501 |
| BELEMAOIL |  |
| SEPLAT | 92543 |
| FIRSTE&P |  |
| HEIRS | 10001 |
| Total | 1027357 |

| Interest |  | Interest |  |
| --- | --- | --- | --- |
| NNPC% | JVPartners% | NNPCmmscf | JVPartnersmmscf |
| 55% | 45% | 173,200 | 141,709 |
| 55% | 45% | 979 | 801 |
| 55% | 45% | 3,965 | 3,244 |
| 55% | 45% | 1,741 | 1,424 |
| 60% | 40% | 109,184 | 72,789 |
| 60% | 40% | 95,774 | 63,850 |
| 60% | 40% | 16,590 | 11,060 |
| 60% | 40% | 137,101 | 91,401 |
| 60% | 40% | - | - |
| 60% | 40% | 55,526 | 37,017 |
| 60% | 40% | - | - |
| 55% | 45% | 5,501 | 4,500 |
|  |  | 599,561 | 427,796 |

Source: NEITI 2022- 2023 OGA, 2024 (NURPC Gas Production Templates)

| Description | NUPRC | NNPC Ltd | Variance |  |
| --- | --- | --- | --- | --- |
| Million MT | Million MT | Million MT | % |  |
| Gas Sales | 9.50 | 1.29 | 8.20 | 86.4% |
| Source:NEITI 2022-2023 OGA,2024(NURPC Gas Production Templates and NNPC LtdSales Records) |  |  |  |  |

3.4.3. Federation Gas and Feedstock Sales

Federation gas entitlement from JV production arrangement is 599.561 billion SCF (≈ 10.93
million metric tons) per NUPRC record. However, NNPC Limited only accounted for 1.293
million metric tons of natural gas liquids (≈ 8.155 billion SCF) as shown in the table below.

* * *

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

Table 46: Gas Sales Quantity and Value

| Description |
| --- |
| Export Gas |
| Domestic Gas |
| Total |

| Quantity | Sales Value |
| --- | --- |
| MT'000 | US$'000 |
| 1,258 | 688,392 |
| 35 | 12,896 |
| 1,293 | 701,287 |

Source: NEITI 2022-2023 OGA, 2024

Table below shows that gas sales proceeds was US$701.287 million in 2023, comparing
US$1.124 billion in 2022. The 38% decline was due to decrease in gas production.

Table 47: Gas Sales Proceeds

| Description |
| --- |
| Proceeds from the Sales of Federation JV Equity Gas |
| Total |

| 2023 | 2022 | Changes |  |
| --- | --- | --- | --- |
| US$'000 | US$'000 | US$'000 | % |
| 701,287 | 1,123,530 | (422,243) | -38% |
| 701,287 | 1,123,530 | (422,243) | -38% |

Source: NEITI 2022-2023 OGA, 2024

* * *

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.

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.

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

Table below shows ongoing companies’ efforts on climate change and policy implementation
status in the oil and gas sector in Nigeria. Twenty companies have policies on climate change
while 42 companies said not avaliable. This imply that, there is the need for more engagement
with companies on the need to align their companies’ policies to the National policy on climate
change.

| 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

* * *

4.2. Companies’ Greenhouse Gas Emissions

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

Table 49: 2023 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

* * *

CHAPTER 5

Revenue Collection and Reconciliation

This section reports on thirty-four (34) revenue streams collected from companies operating in
the upstream oil and gas sector in Nigeria. These revenue streams are further disaggregated to
sector-specific revenue streams, non-financial transactions, dividends and revenue received
from the sale of Federations profit oil, gas and feedstock.

5.1. Total Revenue from the Sector

The total revenue received was US$30.852 billion representing a decrease of 13.7% from US
$35.772 billion in 2022 due to the full impact of implementation of the PIA and decline in the
annual average selling price of crude oil.
.

| Description | 2023 |
| --- | --- |
| US$ 000 |  |
|  |  |
| Dividend Payments and Sales of Federation Crude oil and Gas | 5,010,235 |
| PSCs/MCAs In-Kind Payments | 2,790,147 |
| Other Specific Financial Flows to the Government(NUPRC) | 6,477,786 |
| Revenue Flows to Government Agency(FIRS) | 6,436,329 |
| Sub-National Flows | 10,137,607 |
|  |  |
| Total | 30,852,103 |

| 2022 | Change |  |
| --- | --- | --- |
| US$ 000 | US$ 000 | % |
|  |  |  |
| 13,435,228 | (8,424,993) | -62.7% |
| 5,505,558 | (2,715,411) | -49.3% |
| 5,893,903 | 583,883 | 9.9% |
| 7,171,009 | (734,680) | -10.2% |
| 3,766,514 | 6,371,093 | 169.2% |
|  |  |  |
| 35,772,211 | (4,920,108) | -13.8% |

5.2. Distribution of Revenue from the Sector

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

* * *

Figure 13: Revenue Distribution Chart (Billion Dollars)

Source: NEITI 2022-2023 OGA, 2024

5.3. Ten-Year Trend of Total Financial Flows

A ten-year aggregate revenue trend accrued to the Government from the sector was US$294.33
billion as presented in Figure below

* * *

5.4. Disaggregation of Revenue Flows

The total financial receipt of US$30.852 billion, received from companies operating in the
upstream sector of Nigeria's oil and gas industry, is disaggregated in the table below.

Table 51: Disaggregation of Revenue Flows

| Description | 2023 | 2022 | Change |  |
| --- | --- | --- | --- | --- |
| US$ 000 | US$ 000 | US$ 000 | % |  |
| Dividend Payments and Sales of Federation Crude oil and Gas |  |  |  |  |
| Proceeds from the sales of Federation equity crude oil | 399 | 168,379 | (167,980) | -99.8% |
| Proceeds from the sales of domestic crude oil | - | 10,133,003 | (10,133,003) | -100.0% |
| Proceeds from the sales of profit oil | 2,328,290 | 897,311 | 1,430,979 | 159.5% |
| Proceeds from the sales of Federation equity gas | 701,287 | 1,123,530 | (422,243) | -37.6% |
| NNPC Ltd Dividend | 1,130,945 | - | 1,130,945 | -100.0% |
| NLNG Dividend | 849,314 | 1,113,006 | (263,691) | -24% |
| Total Sales of Federation Crude Oil and Gas(i) | 5,010,235 | 13,435,228 | (8,424,993) | -63% |
| PSCs/MCAs In-Kind Payments |  |  |  |  |
| Petroleum Profit Tax-MCAs |  |  |  |  |
| Petroleum Profit Tax-PSCs | 1,341,060 | 3,025,287 | (1,684,228) | -56% |
| Royalty(Oil)-PSCs | 1,449,088 | 2,476,808 | (1,027,720) | -41% |
| Concession rentals-PSCs | - | 3,463 | (3,463) | -100% |
| Total PSCs/MCAs/Other financial flows in-Kind Payments(ii) | 2,790,147 | 5,505,558 | (2,715,411) | -49% |
| Subtotal(A)=(i)-(ii) | 7,800,382 | 18,940,786 | (11,140,404) | -59% |
| 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% |

* * *

|  | 2023US$ 000 | 2022US$ 000 | Change |  |
| --- | --- | --- | --- | --- |
| Description |  |  | US$ 000 | % |
| 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&LicenseRenewal | 701,478 | 490,616 | 210,862 | 42.98% |
|  |  |  |  |  |
| Total Other SpecificFinancial Flows toGovernment(iii) | 5,893,903 | 7,691,033 | (1,797,130) | -23.37% |
|  |  |  |  |  |
| Revenue Flows toGovernmentAgency(FIRS) |  |  |  |  |
|  |  |  |  |  |
| Petroleum Profit Tax | 2,777,973 | 4,900,253 | (2,122,280) | -43% |
| Company Income Tax | 1,120,103 | 565,385 | 554,718 | 98% |
| Value Added Tax | 842,880 | 570,611 | 272,270 | 48% |
| HydrocarbonTax | 57,094 | 12,600 | 44,494 | 353% |
| Pay as You Earn(FIRS) | 86,118 | 88,339 | (2,221) | -3% |
| Capital GainTax | 23,654 | 24,597 | (943) | -4% |
| WithholdingTax | 953,472 | 684,407 | 269,066 | 39% |
| EducationTax | 571,012 | 322,989 | 248,023 | 77% |
| StampDuties | 4,022 | 1,829 | 2,193 | 120% |
|  | 6,436,329 | 7,171,009 | (734,680) | -10.25% |
| TotalOtherFlowstoGovernment(iv) |  |  |  |  |
|  | 12,914,115 | 13,064,911 | (150,797) | -1.15% |
| Subtotal(B)=(iii)+(iv) | 2,777,973 | 4,900,253 | (2,122,280) | -43% |
|  |  |  |  |  |
| Sub-NationalFlows |  |  |  |  |
| Niger DeltaDevelopmentCommission(NDDC)3%Levy | 1,304,487 | 685,262 | 619,225 | 90% |
| Nigerian ContentDevelopmentandMonitoringBoard(NCDMB)Levy | 146,007 | 613,115 | (467,109) | -76% |
| WithholdingTax toState | 138,697 | 28,083 | 110,614 | 394% |
| NESSFee | 6,349,952 | 1,153,594 | 5,196,357 | 450% |
| Pay asYou Earn toState | 2,198,380 | 1,286,418 | 911,962 | 71% |
| EnvironmentalMonitoring&EvaluationPayment | 16 | 19.3 | (3) | -18% |

* * *

|  |  | 2023US$000 |
| --- | --- | --- |
| Description |  |  |
| Environmental Impact Assessment Payment |  | 69 |
|  |  |  |
| Subtotal(C) |  | 10,137,607 |
|  |  |  |
| Grand Total(A)+(B)+(C) |  | 30,852,103 |

| 2022US$ 000 | ChangeUS$ 000% |  |
| --- | --- | --- |
| 23 | 46 | 206% |
|  |  |  |
| 3,766,514 | 6,371,093 | 169% |
|  |  |  |
| 35,772,211 | (4,920,108) | -14% |

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

5.4.1. Reconciliation of Revenue Flows

All initial populated templates returned by the companies were validated against source
documents and were reconciled with the respective government records and where necessary
adjustments were made.

The table below shows the breakdown of revenues reconciled. A total of thirty-four (34)
revenue streams were identified, out of which twenty-two (22) were fully reconciled while ten
(10) streams are unilaterally disclosed and two (2) recorded no payment. 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.

* * *

Table 52: Reconciliation of Revenue Flows

| Initial Reconciliation |  |  |  |
| --- | --- | --- | --- |
| Description | Company | Government | Difference |
|  | US$ | US$ | US$ |
| Royalty(Oil) | 3,364,419,830 | 2,544,525,719 | 819,894,111 |
| Royalty(Gas) | 450,782,575 | 296,117,693 | 154,664,882 |
| Signature Bonus | - | - | - |
| Gas Flare Penalty | 187,225,855 | 143,954,208 | 43,271,647 |
| Concession Rental | 16,526,949 | 12,064,630 | 4,462,319 |
| License Fees | 28,836,127 | 28,764,307 | 71,820 |
| Transportation Fees | 153,966,117 | 150,908,798 | 3,057,319 |
| Petroleum Profit Tax | 3,106,919,538 | 2,699,690,012 | 407,229,525 |
| Company Income Tax | 1,033,544,568 | 1,118,678,707 | 85,134,139 |
| Education Tax | 605,110,755 | 569,006,779 | 36,103,976 |
| Capital Gain Tax | 23,654,357 | 406,152 | 23,248,205 |
| NDDC | 1,209,859,226 | 1,125,262,373 | 84,596,854 |
| NCD | 145,809,336 | 93,619,916 | 52,189,421 |
| Value Added Tax | 2,146,784,003 | 855,088,061 | 1,291,695,942 |
| NESS | 6,256,518,773 | 4,727,623,401 | 1,528,895,372 |
| WHT-FIRS | 1,333,018,073 | 921,649,014 | 411,369,059 |
| WHT-State | 213,458,021 | 3,320,276 | 210,137,745 |
| PAYE\_FIRS | 86,084,535 | 29,834,619 | 56,249,916 |
| PAYE:-State | 1,932,883,281 | 1,314,451,527 | 618,431,754 |
| EIA Payment | 21,512,320 | 27,867 | 21,484,452 |
| Environmental Monitoring & Evaluation Payment | 15,818 | 3,244 | 12,574 |
| Hydrocarbon Tax | 645,233,765 | 53,944,467 | 591,289,298 |
| Stamp Duty | 4,021,691 | 3,923,502 | 98,189 |
| TOTAL | 22,966,185,514 | 16,692,865,274 | 6,273,320,240 |

| Adjustment |  | Final Reconciliation |  |  |
| --- | --- | --- | --- | --- |
| Company | Government | Company | Government | Difference |
| US$ | US$ | US$ | US$ | US$ |
| -259,623,538 | 1,079,517,649 | 3,624,043,368 | 3,624,043,368 | - |
| -1,604,322,628 | 1,758,987,510 | 2,055,105,203 | 2,055,105,204 | -1 |
| - | - | - | - | - |
| -14,892,155 | 58,163,802 | 202,118,010 | 202,228,892 | -110,882 |
| 433,523 | 4,028,796 | 16,093,426 | 16,337,001 | -243,575 |
| 816,600 | -744,780 | 28,019,527 | 28,836,127 | -816,600 |
| -8,902 | 3,066,221 | 153,975,020 | 153,975,020 | - |
| 328,946,362 | 78,283,164 | 2,777,973,176 | 2,777,973,176 | - |
| -86,558,054 | 1,423,914 | 1,120,102,621 | 1,120,102,535 | 87 |
| 34,886,128 | 1,217,848 | 570,224,627 | 571,011,987 | -787,360 |
| - | 23,248,205 | 23,654,357 | 23,654,357 | - |
| -94,627,682 | 179,224,536 | 1,304,486,909 | 1,304,486,901 | 8 |
| -197,322 | 52,386,742 | 146,006,658 | 146,006,633 | 25 |
| 1,304,427,818 | -12,731,877 | 842,356,185 | 842,880,382 | -524,197 |
| -93,432,805 | 1,622,328,176 | 6,349,951,577 | 6,349,951,577 | - |
| 379,848,742 | 31,520,317 | 953,169,331 | 953,472,397 | -303,066 |
| 74,721,913 | 135,415,833 | 138,736,109 | 138,697,054 | 39,055 |
| -66,190 | 56,316,106 | 86,150,725 | 86,117,630 | 33,095 |
| -265,496,298 | 883,928,052 | 2,198,379,579 | 2,198,379,579 | - |
| 21,443,307 | 41,145 | 69,013 | 69,013 | - |
| - | 12,574 | 15,818 | 15,818 | - |
| 588,139,412 | 3,149,886 | 57,094,353 | 57,094,353 | - |
| - | 98,189 | 4,021,691 | 4,021,691 | - |
| 314,438,231 | 5,958,882,009 | 22,651,747,284 | 22,654,460,695 | -2,713,412 |

Source: NEITI 2022-2023 OGA, 2024

* * *

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) owed to the NUPRC and the FIRS. The liabilities
for the 2021 NEITI extractive reporting was US$ 8.264 billion.

| Description |
| --- |
|  |
|  |
| NURPC |
| Royalty Oil |
| Royalty Gas |
| Royalty Gas (Naira) |
| Gas Flare |
| Rent |
| Subtotal |
|  |
|  |
| FIRS |
| PPT |
| CIT |
| EDT |
| VAT |
| WHT |
| LRP |
| Subtotal |
|  |
| Total |

|  |  |
| --- | --- |
| As at 31st August 2024 |  |
| US$ | N |
|  |  |
| 5,017,779,729 | - |
| 153,211,170 | - |
| - | 65,885,079,249 |
| 861,947,470 | - |
| 17,015,605 | - |
| 6,049,953,974 | 65,885,079,249 |
|  |  |
| As at 30th June 2024 |  |
|  |  |
| 13,211,754 | - |
| 1,553,648 | 65,992,860 |
| 482,190 | - |
| 2,511,107 | 194,395,225 |
| 4,168,183 | 229,039,364 |
| - | 3,345,000 |
| 21,926,882 | 492,772,449 |
|  |  |
| 6,071,880,856 | 66,377,851,698 |

* * *

# 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 2023

* * *

Table 53: JV Partners And Equity Holding

| Equity Participatory Interest |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| # | J V Partner | NNPC | SHELL | MOBIL | CHEVRON | TEPNG | NAOC | PANOCEAN | NEWCROSS | FIRST E&P |  |
|  |  | % | % | % | % | % | % | % | % | % |  |
| 1 | SHELL | 55 | 30 |  |  | 10 | 5 |  |  |  |  |
| 2 | MOBIL | 60 |  | 40 |  |  |  |  |  |  |  |
| 3 | CHEVRON | 60 |  |  | 40 |  |  |  |  |  |  |
| 4 | TEPNG | 60 |  |  |  | 40 |  |  |  |  |  |
| 5 | NEWCROSS | 55 |  |  |  |  |  |  | 45 |  |  |
| 6 | FEPDCL | 60 |  |  |  |  |  |  |  | 40 |  |
| 7 | EROTON/OML 18 | 55 |  |  |  |  |  |  |  |  |  |
| 8 | AITEO | 55 |  |  |  |  |  |  |  |  |  |
| 9 | BELEMA | 60 |  |  |  |  |  |  |  |  |  |
| 10 | SEPLAT | 60 |  |  |  |  |  |  |  |  |  |
| 11 | WAEP | 55 |  |  |  |  |  |  |  |  |  |
| 12 | AMNI | 60 |  |  |  |  |  |  |  |  |  |
| 13 | HHOG | 55 |  |  |  |  |  |  |  |  |  |

| EROTON% | AITEO% | BELEMA% | SEPLAT% | WAEP% | AMNI% | SAHARA% | HHOG% | JV ASSETS |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  | OML |
|  |  |  |  |  |  |  |  | 20,21,22,23,25,27,28,31,32,33,35,36,43,45,46,74,77,79 |
|  |  |  |  |  |  |  |  | 104,67,68,70 |
|  |  |  |  |  |  |  |  | 49,51,89,91,86,88,90,95 |
|  |  |  |  |  |  |  |  | 99,100,102,58 |
|  |  |  |  |  |  |  |  | 24(Transferred to NPDC) |
|  |  |  |  |  |  |  |  | 83,85 |
| 28.8 |  |  |  |  |  | 16.2 |  | 18 |
|  | 45 |  |  |  |  |  |  | 29 |
|  |  | 40 |  |  |  |  |  | 55 |
|  |  |  | 40 |  |  |  |  | 53 |
|  |  |  |  | 45 |  |  |  | 71,72 |
|  |  |  |  |  | 40 |  |  | 52 |
|  |  |  |  |  |  |  | 45 | 17 |

Source: NEITI 2022-2023 OGA, 2024

* * *

6.1.2. Cash Call Budget

The OPCOM meets annually to draw-up and approves 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 2023 was US$ 11.113 billion, comprising US$6.668
billion (60%) for NNPC’s and US$ 4.445 billion (40%) for JV partners as shown in table below.

Table 54: 2023 OPCOM Approved Cash-Call Budget

| COMPANY | Total Approved Budget |  |  |
| --- | --- | --- | --- |
| Source Naira | Source Dollar | Euro per $ |  |
|  | N' Million | US‘Million |  |
| NNPC/CNL | 495,859 | 1,157 |  |
| NNPC/TEPNG | 495,859 | 1,157 |  |
| HEIRS HOLDINGS | 61,986 | 144 |  |
| NNPC/FEPL | 95,900 | 224 |  |
| NNPC/NEOL | 40,581 | 88 |  |
| NNPC/SPDC/TEPNG/NAOCJV | 635,562 | 1,393 |  |
| NNPC/NEWCROSS | 45,755 | 123 |  |
| NNPC/SEPLAT | 31,383 | 45 |  |
| NNPC/AMNI | 1,530 | 1 |  |
| OML 8688 | 9,393 | 30 |  |
| NNPC/AITEO | 181,723 | 434 |  |
| MPN | 303,261 | 730 |  |
| WAEP | 15,420 | 45 |  |
| TOTAL | 2,414,212 | 5,570 |  |

| Net | Approved Budget |  |  |
| --- | --- | --- | --- |
| NNPC SHARE |  |  |  |
| Equivalent Dollar @ $1/N435.57 | Source Naira | Source Dollar | Equivalent Dollar @ $1/N435.57 |
| EQUS$ Million | N' Million | US$' Million | EQUS$ Million |
| 2,295 | 297,515 | 694 | 1,377 |
| 2,295 | 297,515 | 694 | 1,377 |
| 286 | 37,192 | 86 | 172 |
| 444 | 57,540 | 135 | 267 |
| 182 | 24,348 | 53 | 109 |
| 2,852 | 381,337 | 836 | 1,712 |
| 228 | 27,453 | 74 | 137 |
| 117 | 18,830 | 27 | 70 |
| 4 | 918 | 1 | 3 |
| 52 | 5,636 | 18 | 31 |
| 851 | 109,034 | 260 | 511 |
| 1,426 | 181,956 | 438 | 856 |
| 80 | 9,252 | 27 | 48 |
| 11,113 | 1,448,527 | 3,342 | 6,668 |

Source: NNPC-NUIMS OPCOM Budget and NEITI 2022 template

* * *

6.1.3. Cash Call Funding Account

The total inflow into the JVCC accounts in 2023 was US$7.30 billion and total outflow was
US$ 6.78 as shown in the table below.

Table 55: Summary of Inflow and Outflow into Joint Venture Cash Call Bank Accounts

| Description | N' Billion | US 'Billion | EQUS$' Billion |
| --- | --- | --- | --- |
| Opening Balance | - | 0.17 | 0.17 |
| Inflow | 1,864.02 | 2.90 | 7.30 |
| Outflow | 1,797.46 | 2.53 | 6.78 |
| Closing Balance | 66.56 | 0.54 | 0.70 |

Source: NUIMS 2023 budget performance report, 2023 Standard Chartered Bank JVCC Dollar
Account, NUIMS records

Table 56: Analysis of Total Inflow to JVCC Accounts

| Description | No. |
| --- | --- |
|  |  |
| Cash Call Funding 2022 |  |
| Cash Call Funding 2023 |  |
| Car Loan Liquidation |  |
| Crude Oil |  |
| Gas Supply |  |
| Eastacode |  |
| Refund |  |
| Loan Liquidation |  |
| NNPC NUIMS Operations |  |
| NNPC Upstream Investment |  |
| NNPC |  |
| NUIMS Benefits |  |
| NUIMS Claim |  |
| Interest |  |
| JV Partners |  |
| Oil Profit |  |
| Oil Liquidation |  |
| Overcall Refund |  |
| Repayments |  |
| Reversals |  |
| Returns |  |
| Unclassified |  |

| N Million | US$ Million | EQUS$' [Million@423.3](mailto:Million@423.3) |
| --- | --- | --- |
| - | 119.31 | 119.31 |
| - | 71.30 | 71.30 |
| 43.59 | - | 0.07 |
| - | 144.05 | 144.05 |
| - | 10.90 | 10.90 |
| - | 0.00 | 0.00 |
| 43.66 | - | 0.07 |
| 2.71 | - | 0.00 |
| 1,485.71 | - | 2.30 |
| 20,443.83 | - | 31.65 |
| 24,390.16 | - | 37.76 |
| 2.80 | - | 0.00 |
| 0.10 | - | 0.00 |
| 4,107.27 | 12.87 | 19.23 |
| 37,602.84 | - | 58.22 |
| - | 20.81 | 20.81 |
| 1.30 | - | 0.00 |
| - | 0.26 | 0.26 |
| 0.44 | - | 0.00 |
| 36,252.73 | - | 56.13 |
| 19.20 | - | 0.03 |
| 123,796.42 | 2,213.70 | 2,405.36 |

* * *

| Description | N Million | US$ Million | EQUS$' [Million@423.3](mailto:Million@423.3) |
| --- | --- | --- | --- |
| Others | 1,615,831.32 | 304.87 | 2,806.47 |
| Total | 1,864,024.08 | 2,898.06 | 5,783.90 |

Source: NUIMS 2023 budget performance report, 2023 Standard Chartered Bank JVCC Dollar
Account, NUIMS records

Table 57: Analysis of Total payments from JVCC Accounts

| Description | No. |
| --- | --- |
| Cash Call 2021 |  |
| Cash Call 2022 |  |
| Cash Call 2023 |  |
| Undercall 2019 |  |
| Undercall 2020 |  |
| Undercall 2022 |  |
| Legal |  |
| Monetisation |  |
| VAT |  |
| WHT |  |
| WDL |  |
| Bank Charges |  |
| PSC Profit Refund |  |
| Pension |  |
| Refund |  |
| Reg & Renewals |  |
| Royalty |  |
| Petroleum Profit Tax |  |
| Audit Of NNPC Ltd Gas Sales |  |
| Travel Expenses |  |
| NAE OML 125 DSA |  |
| Nigeria Morocco Gas Pipeline Project |  |
| NMDPRA |  |
| NUIMS MIRS Product |  |
| NUIMS Security Architecture Cost |  |
| Oil Profit |  |
| Oil Refund |  |
| Unclassified |  |
| Individual |  |
| Engineering Consultancy |  |
| Estacode |  |
| Export Permit |  |

| N' Million | US$' Million | EQ US$' [Million@645.92](mailto:Million@645.92) |
| --- | --- | --- |
| - | 56.97 | 56.97 |
| - | 371.82 | 371.82 |
| 791,067.84 | 1,213.74 | 2,438.45 |
| - | 2.94 | 2.94 |
| - | 7.78 | 7.78 |
| 6,315.87 | 29.39 | 39.16 |
| - | 1.15 | 1.15 |
| - | 222.23 | 222.23 |
| 0.01 | 1.44 | 1.44 |
| 13.16 | 0.70 | 0.72 |
| 1,946.30 | - | 3.01 |
| 0.10 | - | 0.00 |
| - | 100.72 | 100.72 |
| 3,348.15 | - | 5.18 |
| 17,115.87 | 7.26 | 33.76 |
| - | 0.15 | 0.15 |
| - | 47.85 | 47.85 |
| - | 17.94 | 17.94 |
| - | 0.04 | 0.04 |
| 927.07 | 0.06 | 1.49 |
| - | 30.00 | 30.00 |
| - | 5.00 | 5.00 |
| - | 0.03 | 0.03 |
| - | 0.23 | 0.23 |
| - | 175.51 | 175.51 |
| - | 6.28 | 6.28 |
| - | 11.71 | 11.71 |
| - | 208.50 | 208.50 |
| - | 0.07 | 0.07 |
| - | 0.07 | 0.07 |
| - | 0.54 | 0.54 |
| - | 0.08 | 0.08 |

* * *

| Description |
| --- |
| Fund Return |
| Overheads |
| Others |
|  |
| Total |

| N' Million | US$' Million | EQ US$' [Million@645.92](mailto:Million@645.92) |
| --- | --- | --- |
| - | 10.19 | 10.19 |
| - | 3.83 | 3.83 |
| 976,728.21 | - | 1,512.15 |
|  |  |  |
| 1,797,462.58 | 2,534.21 | 5,317.01 |

Source: NUIMS 2023 budget performance report, 2023 Standard Chartered Bank JVCC Dollar
Account, NUIMS records

A total of US$317 million was approved in 2023 while US$236.69 million (75%) was actual
expenditure from the budget.

Table 58: Summary of NUIMS Overheads Performance and 2023 Funding

| Description | 2023 Revised Budget(N' Million) | 2023 Revised Budget(EQUS$' Million)@645.92/$ | 2023 Jan-Dec Performance(N' Million) | 2023 Jan-Dec Performance(EQUS$' Million)@645.92/$ | 2023% of Performance |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| CAPEX | 8,911.28 | 13.80 | 6,040.75 | 9.35 | 68% |
| Movables | 6,485.83 | 10.04 | 1,281.29 | 1.98 | 20% |
| OPEX | 189,415.70 | 293.25 | 145,567.12 | 225.36 | 77% |
|  |  |  |  |  |  |
| Total | 204,812.81 | 317.09 | 152,889.16 | 236.70 | 75% |

Source: NUIMS 2023 budget performance report, 2023 Standard Chartered Bank JVCC Dollar
Account, NUIMS records

The table below shows the details of the cash call payments to operators in 2023.

| # | Partners |
| --- | --- |
|  |  |
| 1 | SHELL |
| 2 | EXXON MOBIL |
| 3 | NNPC/NPDC/CHEVRON |
| 4 | NNPC/TEPNG |
| 5 | NNPC FIRST E&P |
| 6 | NNPC/CNL |
| 7 | NNPC/NEPL |

| N' Million | US$' Million | EQ$ US$' Million |
| --- | --- | --- |
|  |  |  |
| 503.49 | - | 0.78 |
| 44,367.76 | 194.45 | 263.13 |
| - | 0.98 | 0.98 |
| 40,800.04 | 250.31 | 313.48 |
| 9,698.00 | 77.49 | 92.51 |
| 79,349.20 | 252.07 | 374.92 |
| 18,138.64 | - | 28.08 |

Table 59: Details of Outflow from Joint Venture Cash Call Bank Account

* * *

| # | Partners |
| --- | --- |
| 8 | NNPC/SPDC/EPNL/NAOC JV |
| 9 | NNPC/NPDC/SPDC JV |
| 10 | NNPC/HHOG |
| 11 | NNPC/NEWCROSS/EROTON |
| 12 | NNPC/NEWCROSS JV |
| 13 | NNPC/AITEO JV |
| 14 | NNPC/BELEMA |
| 15 | NNPC/SEPLAT |
| 16 | NNPC/WAEP |
| 17 | NNPC/AMNI |
| 18 | NNPC EIGHTEEN |
| 19 | NNPC(UNCLASSIFIED) |
| 20 | OML 28/30 CASH CALL |
| 21 | OML 49 38 JV CASH CALL |
|  |  |
|  | Total |

| N' Million | US$' Million | EQ$ US$' Million |
| --- | --- | --- |
| 57,027.56 | 109.20 | 197.49 |
| 209.46 | 2.49 | 2.82 |
| 1,943.35 | 38.99 | 42.00 |
| - | 0.19 | 0.19 |
| 10,707.30 | 71.02 | 87.60 |
| 36,669.53 | 142.68 | 199.45 |
| 13,539.38 | 1.77 | 22.74 |
| 1,888.96 | 13.96 | 16.88 |
| 172.81 | 23.59 | 23.85 |
| 186.11 | 0.54 | 0.83 |
| 1,459.90 | 30.57 | 32.83 |
| 73,855.85 | - | 733.61 |
| 230.63 | 1.51 | 1.86 |
| 318.92 | 1.93 | 2.42 |
|  |  |  |
| 791,066.87 | 1,213.74 | 2,438.45 |

Source: NUIMS 2023 budget performance report, 2023 Standard Chartered Bank JVCC Dollar
Account, NUIMS records

* * *

CHAPTER 7

Midstream and Downstream Operations

The Midstream and downstream operations are coordinated by the Nigerian Midstream and
Downstream Petroleum Regulatory Authority (NMDPRA). However, the Domestic Crude
Supply Obligation is coordinated by the NUPRC. See the Contextual Report for detailed
description of laws, regulations, policies on Midstream and Downstream Operations.

7.1. Midstream Operations

This section provides an overview of refinery operations, focusing on Domestic Crude Supply
Obligations (DCSO), midstream infrastructure, and the current balances of NNPC refineries.

7.1.1. Refinery Operations

In 2023, a total of nine refinery licenses/approvals were granted, an increase from seven in
2022.

Table 60: Status of Licensed Refineries

The 2023 approvals include five LTEs, three LTCs, and one LTO, with a combined refining
capacity of 290,064 barrels per day, as detailed in the table below.

| # | Company | Location | Types of facility/plant |
| --- | --- | --- | --- |
| 1 | MoreBarrels Petrochemical Ltd | Delta state | Topping plant(Modular) |
| 2 | Nakase Oil Services Ltd | Rivers State | Hydroskimming plant(modular) |
| 3 | Onose Modular Refinery Ltd | Delta State | Hydroskimming plant(modular) |
| 4 | Oely Nigeria Ltd | Kaduna State | Bio refinery(modular) |
| 5 | Belema oil Producing Ltd | Rivers State | Topping plant(Modular) |
| 6 | Waltersmith Refining & Petrochemical Company Ltd | Imo state | Topping plant(Modular) |
| 7 | SINOK Refining&Petrochemical Company Ltd | Delta State | Topping plant(Modular) |

| Capacity(BPD) | Licenses/Approvals granted | Date of issue | Validity period |
| --- | --- | --- | --- |
| 25,000 | LTC | 12/07/2023 | Two(2)years |
| 30,000 | LTE | 12/07/2023 |  |
| 60,000 | LTE | 20/11/2023 |  |
| 64 | LTE | 13/11/2023 |  |
| 10,000 | LTE | 30/8/2023 |  |
| 5,000 | LTO | 07/01/2023 |  |
| 30,000 | LTC | 07/01/2023 |  |

* * *

| # | Company | Location | Types of facility/plant | Capacity(BPD) | Licenses/Approvals granted | Date of issue | Validity period |
| --- | --- | --- | --- | --- | --- | --- | --- |
| 8 | AIPCC Energy Ltd | Delta State | Topping plant(Modular) | 30,000 | LTC | 20/5/2023 |  |
| 9 | Eghudu Refinery Ltd | Edo State | Hydroskimming plant(modular) | 100,000 | LTE | 20/1/2023 |  |
|  | Total |  |  | 290,064 |  |  |  |

Source: NEITI 2022-2023 OGA, 2024 (NMDPRA Responses)

7.1.2. Domestic Crude Supply Obligations

Similar to 2022, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC)reported
that in 2023, no endorsed and processed Export Permits were issued by the Federal Government
for Domestic Crude Supply Obligation (DCSO) operations. Furthermore, there were no DCSO
applications received, no approvals granted, and no actual DCSO deliveries to the refineries
during this period.

7.1.3. Associated and Non-Associated Gas and Crude Pipeline
Infrastructure

Pipeline Infrastructure in the Midstream is coordinated by the NMDPRA. The table below
shows the significant pipeline infrastructure investment and projects in the midstream value
chain.

Table 61: 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

* * *

7.1.4. NNPC Refineries’ Balance

NNPC refineries are Port Harcourt Refinery Company (PHRC), Warri Refining and
Petrochemical Company Limited (WRPC) and the Kaduna Refining and Petrochemical
Company Limited (KRPC). There were no balances in KRPC. Tables below show the balances
in PHRC and WRPC.

Table 62: PHRC Refinery Balance (Crude Material Balance)

| Crude Blend | Opening Stock | Receipt | Processed | Closing Stock | Audit Closing Stock | Variance |
| --- | --- | --- | --- | --- | --- | --- |
| Bbls | bbls | bbls | bbls | bbls | bbls |  |
| Bonny Light | 156,288 | - | - | 157,050 | 156,288 | (762) |

Source: NEITI 2022 – 2023 OGA, 2024

Table 63: PHRC Refinery Balance (Products Material Balance)

Table 64: WRPC Refinery Balance (Crude Material Balance)

| Crude Blend | Opening Stock | Receipt | Transfer | Processed | Closing Stock | Audit Closing Stock | Variance |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  | Bbls | bbls | bbls | bbls | bbls | bbls | bbls |
| Bonny | - | - |  | - | - | - | - |
| Escravos | 86,158 | - |  | - | 77,759 | 86,158 | 8,399 |
| Urals |  | - |  | - |  | - | - |

Source: NEITI 2022 – 2023 OGA, 2024

* * *

| Ugelli Blend/Seplat | 258,164 | - | 86,395 | - | 171,066 | 171769 | 703 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Seplat | 70,004 | - |  | - | 70,004 | 70,004 | - |
| Slop | 23,414 | - |  | - | 23,414 | 23,414 | - |
| ND Western | 298,494 | 306,249 | 66,023 | - | 451,814 | 538,720 | 86,906 |
| Total | 736,233 | 306,249 | 152,418 | - | 794,057 | 890,065 | 96,008 |

Source: NEITI 2022 – 2023 OGA, 2024

Table 65: WRPC Refinery Balance (Products Material Balance)

| Products | Opening Stock MT | Production MT | Evacuation MT | Losses MT | Closing Stock MT | Calculated Closing Stock MT | Variance MT |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Off Gas | - | - | - | - | - | - | - |
| Propane | - | - | - | - | - | - | - |
| LPG | - | - | - | - | - | - | - |
| PMS | 10,711 | 209,080 | 200,247 | - | - | 19,544 | (19,544) |
| DPK | 4,088 | - | - | - | 4,078 | 4,088 | (10) |
| AGO | 1,752 | - | - | - | 781 | 1,752 | (971) |
| LPFO | 10,840 | - | - | - | 8,238 | 10,840 | (2,602) |
| Asphalt | - | - | - | - | - | - | - |
| Consumption | - | - | - | - | - | - | - |
| Losses | - | - | - | - | - | - | - |
| Total | 27,391 | 209,080 | 200,247 | - | 13,097 | 36,224 | (23,127) |

Source: NEITI 2022 – 2023 OGA, 2024

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

* * *

7.2.2.Product Import Valuation

A total 14.53 billion litres of PMS was imported by NNPC Limited in 2023, comparing 22.93
billion litres of PMS in 2022. See appendix 15 for 2023 NNPC Limited Imported PMS
Valuation: Quantity, Cost of Supply, Revenue and Under Recovery.

The cost of supply was N6.74 trillion, revenue of N3.73 trillion and under recovery of N3.01
trillion as shown in the table below.

Table 66: NNPC Limited Imported PMS Cost, Revenue and Under Recovery

| 2023Monthly | QTY | QTY |
| --- | --- | --- |
| MillionMT | Litres'Billion |  |
| January | 1.20 | 1.61 |
| February | 1.85 | 2.48 |
| March | 1.56 | 2.09 |
| April | 1.35 | 1.82 |
| May | 1.20 | 1.61 |
| June | 1.42 | 1.91 |
| July | 0.71 | 0.95 |
| August | 0.81 | 1.08 |
| September | 0.36 | 0.48 |
| October | 0.18 | 0.25 |
| November | 0.09 | 0.12 |
| December | 0.09 | 0.13 |
| Total | 10.83 | 14.53 |

| Cost of Supply |  | Revenue | Under Recovery N' Trillion |
| --- | --- | --- | --- |
| US$' Billion | N' Trillion | N' Trillion |  |
| 1.01 | 0.47 | 0.18 | 0.29 |
| 1.82 | 1.10 | 0.28 | 0.82 |
| 1.43 | 0.97 | 0.23 | 0.74 |
| 1.29 | 0.87 | 0.20 | 0.67 |
| 1.10 | 0.68 | 0.18 | 0.50 |
| 1.29 | 0.98 | 0.98 | - |
| 0.64 | 0.49 | 0.49 | - |
| 0.82 | 0.63 | 0.63 | - |
| 0.34 | 0.27 | 0.27 | - |
| 0.17 | 0.16 | 0.16 | - |
| 0.08 | 0.07 | 0.07 |  |
| 0.08 | 0.07 | 0.07 |  |
| 10.06 | 6.74 | 3.73 | 3.01 |

Source: NEITI 2022- 2023 OGA, 2024

7.2.3.PMS Price Differentials

A total of N15.87 trillion has been claimed as under recovery/ price differentials between 2006
and 2023, with 2022 recording the highest of N4.714 trillion as shown in the Figure below.

* * *

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.

| Products | Marketers |  |
| --- | --- | --- |
| NNPC Ltd | Other Marking Companies |  |
| QTY | QTY |  |
| Billion Litres | Billion Litres |  |
| PMS | 6.02 | 14.26 |

| 2023 | 2022 | Changes |  |
| --- | --- | --- | --- |
| Total QTY | Total QTY | Total QTY | % |
| Billion Litres | Billion Litres | Billion Litres |  |
| 20.28 | 23.54 | (3.25) | -14% |

Source: NEITI 2022- 2023 OGA, 2024

Figure below shows the ten-year (2014 – 2023) trend of PMS computation with highest annual
importation in 2022 (23.54 billion litres) and lowest in 2017 (16.88 billion litres). Furthermore,
importation declined by 3.25 billion litres (14%) from 23.54 billion litres in 2022 to 20.28
billion litres in 2023 due to the announcement of removal of subsidy.

Figure 16: PMS Importation Ten-Year Trend (2014-2023) (Billion Litres)

* * *

The 2023 monthly trend from January to December shows that December (0.68 billion litres)
was the highest import by NNPC Ltd. The total highest import by NNPCL and Other marketers
was in March (2.29 billion litres) and lowest in August (1.09 billion litres). Figure below shows
the monthly product importation for NNPC Limited and other marketers.

Figure 17: 2023 Monthly Product Importation (Billion Litres)

Source: NEITI 2022- 2023 OGA, 2024

* * *

# CHAPTER 8 Social and Economic Spending

This section discusses infrastructure provisions, barter arrangement, social expenditures, and quasi-fiscal expenditure, furthermore, it discusses the contribution of the industry to the economy and the environmental impact of the industry 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

During the review period, there were no infrastructure provisions made for lifting crude in exchange for payment. However, NNPC Limited implemented a Direct Sales Direct Purchase (DSDP) arrangement, enabling crude oil off-takers to lift crude oil in return for refined petroleum products. This mechanism aims to facilitate the supply chain while addressing the immediate needs of the domestic market. 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.

* * *

The table below shows Status of NNPC Limited commitments and contingencies

Table 68: 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: |  |  |  |  |  |  | Principal repayment to commence after moratorium. |
| Project Panther | NNPC/CNL JV | Commercial Bank Consortium(NCB&ICBFacility),CNL(Co-Lender) | Year Obtained:2022 | Facility Amount | 1400 |  |  |
| Tenor:7 years |  |  |  |  |  |  |  |
| Maturity Year:2029 | Amount Drawn | 359 |  |  |  |  |  |
| NNPC Participating Interest:60% | Repayment Amount-to Date | 0 |  |  |  |  |  |
| Pledged barrels:23,500bopd | Balance Outstanding | 359 |  |  |  |  |  |
| Key Financing Terms:3 MonthSOFR+5.5%Margin+1%Liquidity Premium. |  |  |  |  |  |  |  |
| Security/Loan Covenants:SPV,Cash,Balance Sheet andAccounts of SPV |  |  |  |  |  |  |  |
| Pre-Export Financing Loans(PxF Loans) |  |  |  |  |  |  | Full and Final Repayment achieved on28June2024. |
| Project Bison(20%equity acquisitionof DangoteRefinery) | NNPC | AfreximBank-MLA | Year Obtained:2021 | Facility Amount | 1040 |  |  |
| Tenor:5 years |  |  |  |  |  |  |  |
| Maturity Year:2026 |  |  |  |  |  |  |  |
| NNPC Participating Interest:100% | Amount Drawn | 1037 |  |  |  |  |  |
|  |  |  | Pledged barrels:35,000bopd | Repayment Amount-to Date | 1037 |  |  |

* * *

| Project Name | Beneficiary | Lender | Financing Details | NNPC Portion of the Facility Description |  | Remark |
| --- | --- | --- | --- | --- | --- | --- |
| US$ Million |  |  |  |  |  |  |
| Project Eagle Export Funding Original Debt | NEPL | Crude oil traders(NCB and ICB) | Key Financing Terms:International Commercial BanksTranche-3 Month Libor+6.525%+0.5% LiquidityPremium. | Balance Outstanding | 0 | Full and Final Repayment achieved on15September 2023. |
| Security/Loan Covenants:SPV,Cash and Accounts of SPV,DSU |  |  |  |  |  |  |
| Year Obtained:2020 | Facility Amount | 935 |  |  |  |  |
| Tenor:5 years |  |  |  |  |  |  |
| Maturity Year:2025 |  |  |  |  |  |  |
| NNPC Participating Interest:100% | Amount Drawn | 841 |  |  |  |  |
| Pledged barrels:30,000bopd | Repayment Amount-to Date | 841 |  |  |  |  |
| Key Financing Terms:International Commercial BanksTranche-3 Month Libor+4.5%;Nigerian Commercial BanksTranche-3 Month Libor+4.5%+0.75% Liquidity Premium.All-In Cost-5.05%p.a. | Balance Outstanding | 0 |  |  |  |  |
|  |  | Year Obtained:2021 |  |  |  |  |

* * *

| Project Name | Beneficiary | Lender | Financing Details | NNPC Portion of the Facility |  | Remark |
| --- | --- | --- | --- | --- | --- | --- |
| Description | US$ Million |  |  |  |  |  |
| Project Eagle Export Funding Subsequent Debt | NEPL | Crude oil traders(NCB and ICB) | Tenor:5 years |  |  | Full and Final Repayment achieved on 15 September 2023. |
| Maturity Year:2026 | Facility Amount | 635 |  |  |  |  |
| NNPC Participating Interest:100% | Amount Drawn | 635 |  |  |  |  |
| Pledged barrels:6,000bopd | Repayment Amount-to Date | 635 |  |  |  |  |
| Key Financing Terms:International Commercial BanksTranche-3 Month Libor+4.5%;Nigerian Commercial BanksTranche-3 Month Libor+4.5%+1.25% Liquidity Premium.All-In Cost-5.40% p.a. | Balance Outstanding | 0 |  |  |  |  |
| Security/Loan Covenants:SPV,Cash and Accounts of SPV,DSU |  |  |  |  |  |  |
| Project Eagle Export Funding Subsequent 2 Debt | NEPL | Crude oil traders(NCB and ICB) | Facility Amount:US$540 million |  |  | Principal repayment commenced after12-month moratorium in June 2024. |
| Year Obtained:2023 | Facility Amount | 900 |  |  |  |  |
| Tenor:5 years | Amount Drawn | 900 |  |  |  |  |
| Maturity Year:2028 | Repayment Amount-to Date | 62 |  |  |  |  |
| NNPC Participating Interest:100% | Balance Outstanding | 838 |  |  |  |  |
| Pledged barrels:21,000bopd |  |  |  |  |  |  |
| Key Financing Terms:International Commercial BanksTranche-3 Month SOFR+4.5+ |  |  |  |  |  |  |
| Description | US$ Million |  |  |  |  |  |
| Project Yield | PHRC | Afrexim/Metrix/Gulf/Zenith | 0.5% Liquidity Premium;Nigerian Commercial BanksTranche-3 Month SOFR+5.5%%+1% Liquidity Premium. |  |  | Principal repayment to commence in Dec 2024. |
| Security/Loan Covenants:SPV,CASH AND ACCOUNTS OFSPV,DSU |  |  |  |  |  |  |
| Year Obtained:2022 |  |  |  |  |  |  |
| Tenor:7 years |  |  |  |  |  |  |
| Maturity Year:2029 | Facility Amount | 950 |  |  |  |  |
| NNPC Participating Interest:100% | Amount Drawn | 950 |  |  |  |  |
| Pledged barrels:67,000bopd | Repayment Amount-to Date | 0 |  |  |  |  |
|  |  | Key Financing Terms:International Commercial BanksTranche-3 Month Libor+5.4;Nigerian Commercial BanksTranche-3 Month Libor+5.4%%+0.5% LiquidityPremium. | Balance Outstanding | 950 |  |  |
|  |  | Security/Loan Covenants:SPV,CASH AND ACCOUNTS OFSPV,DSU |  |  |  |  |

Source: NEITI 2022- 2023 OGA, 2024

* * *

8.1.2. Tax Credit and Waiver for Investment Promotion in the Sector

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. See appendix 15 for the Schedule of NNPC Limited approved road project
costs.

Table 69: Status Update of NNPC Limited Tax Credit Under the Scheme: 30 April 2024

| Company | Credit Notes as Per NNPCL | Committee Certified Credit Note | Variance | Credit Notes Utilized Pre-2022 | Tax Credits Yet to Be 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

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 host community development administration and project
management.

Source: NEITI 2022 – 2023 OGA, 2024

Table 70: Host Community Development Administration and Project Management

| Parameters | # |
| --- | --- |
| Application Received by NUPRC on HCDT Incorporation | 136 |
| NUPRC Approvals for HCDT Incorporation | 115 |
| CAC Incorporated HCDT | 87 |
| Approved Fund Managers | 25 |
| Legacy Projects | 25 |

* * *

Table 71: Host Community Development Remittance

| Parameters | 2022 | 2023 |
| --- | --- | --- |
| Remittance in Billion Naira | 4.630 | 3.815 |
| Remittance in Million US$ | 14.835 | 6.918 |

Source: NEITI 2022 – 2023 OGA, 2024

Furthermore, a total of N 3.590 billion was reported by twenty-two (22) companies (2022:
N5.301 billion by nineteen (19) companies) as voluntary social expenditure as shown in the
table below.

Table 72: Voluntary Social Expenditure by Company

| Company |
| --- |
|  |
| Amni International Petroleum Ltd |
| Antan Producing Limited |
| Aradel Holdings |
| Brittania U-Nigeria |
| Chorus Energy Limited |
| Elcrest Exploration and Production Nigeria L |
| Equinor Nigeria Energy Company Limited |
| Esso E&P Nigeria Ltd |
| Excel Exploration & Production Limited |
| Frontier Oil Limited |
| Midwestern Oil and Gas |
| Mobil Producing Nigeria Unlimited |
| NNPC E&P Limited |
| Network Exploration & Production Ltd |
| Oriental Energy Resources Ltd |
| Pillar Oil Limited |
| Shell Nig. Exploration & Production Co Ltd |
| SPDC |
| South Atlantic Pet. Ltd |
| Sterling Global Oil Resources Limited |
| Sterling Oil E&P Production Co Ltd |
| Universal Energy Limited |
| Total |

|  | Contribution |  |
| --- | --- | --- |
|  | N | % |
|  | 47,742,130 | 1.33% |
|  | 29,885,000 | 0.83% |
|  | 86,886,278 | 2.42% |
|  | 3,500,000 | 0.10% |
|  | 243,329,525 | 6.78% |
| td | 780,688,000 | 21.75% |
| 680,134,072 | 18.95% |  |
| 32,500,000 | 0.91% |  |
| 79,900,000 | 2.23% |  |
| 28,000,000 | 0.78% |  |
| 52,671,150 | 1.47% |  |
| 205,717,325 | 5.73% |  |
| 103,103,098 | 2.87% |  |
| 56,908,591 | 1.59% |  |
| 318,798,042 | 8.88% |  |
| 2,820,209 | 0.08% |  |
| 138,067,311 | 3.85% |  |
| 247,905,085 | 6.91% |  |
| 50,000,000 | 1.39% |  |
|  | 87,971,000 | 2.45% |
|  | 135,029,000 | 3.76% |
|  | 178,044,000 | 4.96% |
|  | 3,589,599,815 | 100% |

Source: NEITI 2022 – 2023 OGA, 2024

* * *

A further review of the voluntary expenditures shows that companies spent N1.163 billion
(32.4%) (2022: N1.206 billion- 22.75%) on infrastructure and civil works, while N557.966
million (20.3%) (2022: N421.614 million- 7.95%) was spent on medical and health services.
Furthermore, N65.355 million (2022: N17.2945 million) was contributed to a community trust
fund as shown in the table below.

Table 73: Voluntary Social Expenditure by Utilisation

| Description |
| --- |
| Host Community Trust Fund |
| Training/Capacity/Soft Skill |
| Education/Scholarship |
| Community Social & Cultural Engagements |
| Others |
| Medical/Health Services |
| Infrastructure/Civil Works |
| Total |

|  | Contribution |  |
| --- | --- | --- |
| N | % |  |
| 65,354,738 | 1.82% |  |
| 76,393,630 | 2.13% |  |
| 282,848,175 | 7.88% |  |
| 557,965,877 | 15.54% |  |
| 714,008,185 | 19.89% |  |
| 730,333,291 | 20.35% |  |
| 1,162,695,919 | 32.39% |  |
| 3,589,599,815 | 100.00% |  |

Source: NEITI 2022 – 2023 OGA, 2024 ( NUPRC Annual Report)

8.3. Quasi-Fiscal Expenditures

Quasi-fiscal expenditures are expenditures that are not provided for in the national budget. See
the Contextual Report on the detailed description of quasi-fiscal expenditures. Table below
shows the quasi-fiscal expenditures.

| Description |  |
| --- | --- |
|  |  |
| Pipeline Maintenance and Management Costs |  |
| PMS under recovery/Price Differentials/Subsidy |  |
| Total |  |

| 2023 | 2022 |
| --- | --- |
| NGN' Billion Equivalent | NGN' Billion Equivalent |
| - | 12 |
| 3,012 | 4,714 |
| 3,012 | 4,726 |

Source: NEITI 2022 – 2023 OGA, 2024

* * *

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

There was steady decline in contribution growth rate of the oil sector to the economy from
2019 to date. 2023 quarterly analysis shows the oil sector recorded a decline growth rate of -
3.81% in the last quarter. While on an annual basis, the oil sector experienced decline growth
rate of -2.22% in 2023 compared to -19.22% in 2022. The oil and gas sector contributed 4.70%
to the total real GDP in Q4 2023, up from the 4.34% in the corresponding period of 2022, this
was down from 5.48% in same quarter in 2021.

Overall, the oil sector contributed 5.48% to the total real GDP compared to 5.74% in 2022. A
five (5) trend of the economic contribution of the industry is shown in the table below.

Table 75: Contribution of the Sector to Nigeria’s Total GDP

| Quarter | 2023 | 2022 |
| --- | --- | --- |
| 1 | 6.21% | 6.63% |
| 2 | 5.34% | 6.33% |
| 3 | 5.48% | 5.66% |
| 4 | 4.70% | 4.34% |
| Annual Average | 5.48% | 5.74% |

| 2021 | 2020 | 2019 |
| --- | --- | --- |
| 9.25% | 9.50% | 9.22% |
| 7.42% | 8.93% | 8.98% |
| 7.49% | 8.73% | 7,32% |
| 5.19% | 5.87% | 9.77% |
| 7.24% | 8.16% | 8.62% |

8.4.2. Contribution to Exports

Source: NEITI 2022 – 2023 OGA, 2024

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

| Year | Total Export |  |
| --- | --- | --- |
| NGN' Trillion | US$' Billion |  |
| 2019 | 19.192 | 48.019 |
| 2020 | 12.523 | 31.333 |
| 2021 | 18.908 | 47.307 |
| 2022 | 26.796 | 63.304 |
| 2023 | 35.962 | 55.676 |

| Crude Oil and Gas Exports |  | Crude Oil and Gas Exports to Total Exports |
| --- | --- | --- |
| NGN' Trillion | US$ 'Billion |  |
| 14.690 | 36.754 | 76.54% |
| 9.4445 | 23.631 | 75.42% |
| 14.411 | 36.056 | 76.22% |
| 21.099 | 49.844 | 78.74% |
| 29.000 | 44.898 | 80.64% |

* * *

8.4.3. Contribution to Government Revenue

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

Table 77: Contribution of the Sector to Government Revenue

| Year | Total Government Revenue |
| --- | --- |
| NGN' Trillion |  |
| 2021 | 10.75 |
| 2022 | 12.586 |
| 2023 |  |

| Total Oil and Gas Revenue | Crude Oil and Gas Revenue to Total Government Revenue |
| --- | --- |
| NGN' Trillion |  |
| 4.358 | 40.55% |
| 4.641 | 36.87% |
|  |  |

Source: NEITI 2022 – 2023 OGA, 2024

8.4.4. Employment and Gender

Gender mainstreaming in the sector were supported through policies and activities. See the
Contextual Report for description, regulations, policies and activities on Gender and Equality
in the Sector.

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

Table 78: 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% |

A total of thirty-two (32) companies returned populated NEITI Audit template on 2023
employment. Total employment in the sector was 8,693 persons (2022: 6,728 persons),
comprising 7,274 (84%) males (2022: 5,565- 83%), and 1,419 (16%) females (2022: 1,163-
17%) as shown in the table below.

* * *

Table 79: Total Employment in the Sector

| Gender | Senior Management | % | Middle Cadre | % | Junior Cadre | % | Total | % |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Men | 653 | 81% | 2,824 | 83% | 3,797 | 85% | 7,274 | 84% |
| Women | 157 | 19% | 577 | 17% | 685 | 15% | 1,419 | 16% |
| Total | 810 | 100% | 3,401 | 100% | 4,482 | 100% | 8,693 | 100% |

Source: NEITI 2022-2023 OGA, 2024

Furthermore, table below shows 8,482 (97%) (2022: 6,554 - 97%) are Nigerians and 211
(2.47%) (2022: 174 - 3%) are expatriate as shown in the table below.

Table 80: Employment Distribution Based on Nationality and Gender

| Management Level | Nigerian nationals |  |  |  |  | Expatriates |  |  | TOTAL |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Local |  | National |  |  |  |  |  |  |  |  |  |
| Male | Female | Male | Female | Total | Male | Female | Total | Male | Female | Total |  |
| Top | 481 | 134 | 115 | 22 | 752 | 57 | 1 | 58 | 653 | 157 | 810 |
| % | 59.38% | 16.54% | 14.20% | 2.72% | 93% | 7.04% | 0.12% | 7.2% | 81% | 19% | 100% |
| Middle | 1,823 | 398 | 891 | 167 | 3,279 | 110 | 12 | 122 | 2,824 | 577 | 3,401 |
| % | 53.60% | 12% | 26% | 4.91% | 96.4% | 3% | 0.35% | 3.6% | 83.03% | 16.97% | 100% |
| Lower | 2,932 | 539 | 843 | 137 | 4,451 | 22 | 9 | 31 | 3,797 | 685 | 4,482 |
| % | 65.42% | 12.03% | 18.81% | 3.06% | 99.3% | 0.49% | 0.20% | 0.69% | 84.72% | 15.28% | 100% |
| Total | 5,236 | 1,071 | 1,849 | 326 | 8,482 | 189 | 22 | 211 | 7,274 | 1,419 | 8,693 |
| % | 60.23% | 12.32% | 21.27% | 3.75% | 98% | 2.17% | 0.25% | 2.43% | 84% | 16% | 100% |

Source: NEITI 2022-2023 OGA, 2024

| Casual |
| --- |
| Blow Out |
| Corrosion |
| Equipment Failure |
| Mystery |
| Operational/ Maintenance Error |

|  | Occurrence |  |
| --- | --- | --- |
|  | # | % |
|  | 1 | 0.18% |
|  | 7 | 1.23% |
|  | 16 | 2.80% |
|  | 5 | 0.88% |
|  | 11 | 1.93% |

NUPRC coordinates the activities around the environmental incidence management. Table
below shows the occurrences of oil spillages and causes.

Table 81: Environmental Incidence Management

* * *

| Casual | Occurrence # % |
| --- | --- |
| Sabotage | 337 59.02% |
| Not Yet Determined | 194 33.98% |
| Total | 571 100.00% |
| Source: NEITI 2022-2023 OGA, 2024 change in the sector. | The table below shows the activities of the NUPRC on waste management, environmental assessment, laboratory services, compliance and enforcement, including activities on climate Table 82: Other NUPRC Environmental Activities |
| Parameters | Description of Activities |
| Waste Management | • Accreditation of 103 Waste Management companies. • Issuance of 139 Effluent/ Waste Discharge Permits (EWDP) for new wells and workover. • Registration of 32 Point sources (solid, liquid, and gaseous). |
| Environmental Assessment | • Approved 38 Environmental Screening Report (ESR) and Preliminary Impact assessment Report (PIAR). • Approved 92 Terms of Reference (TOR) and Scope of Work (SOW). • Approved 82 Environmental Impact Assessment (EIA). • Approved 11 Environmental Management Plans (EMP). • Approved 83 Environmental Evaluation Studies (EES). • Approved 27 Environment Baseline Study (EBS) and Environmental Seabed Survey. • Issued 24 EIA waivers. • Issued 20 Extension of EIA/EES validity. |
| Laboratory Services | • Accredited forty-one (41) laboratories • Approved three Hundred and eight six (386) oilfield chemicals. • Received submission of fifty-one (51) chemicals inventory reports. |
| Compliance and Enforcement | • Approved twenty-nine (29) Biological Monitoring Studies (BMS). • Received submission of thirty-six (36) Environmental Compliance Monitoring Report (ECM). |
| Climate Change Source: NEITI 2022-2023 OGA, 2024 | • Received and reviewed fourteen (14) Greenhouse Gas Emission Management reports (GHGEMP). • Received and reviewed thirty-five (35) Greenhouse Gas (GHG) Emission Inventory reports. • Granted sixteen (16) Leak Detection and Repair (LDAR) and GHG Management Consultancy Services. |

* * *

The table below shows the environmental safety control activities carried out by the NUPRC.

Table 83: Environmental Safety Control Activities

| Parameters | Description of Activities |
| --- | --- |
| Accident/Incident Management | Recorded thirty-one(31) incidents. |
| Offshore Safety Permit | Received registration of23,057 for Offshore Safety PermitIssue6,228 Offshore Safety Permit.This includes26 VIP flyersRenewed16,829 Offshore Safety Permit. |
| Radiation Safety Permit(RSP) | Issued186 Radiation Safety Permits |
| Safety and Emergency Training Centres(SETC) | Inspected and re-accredited six(6)Safety Training Centres. |

Source: NEITI 2022-2023 OGA, 2024

* * *

CHAPTER 9

Outcomes and Impact

Outcomes and impacts discussed in the report are update on the remediation action on the 2023
EITI validation exercise. It also examined the status of implementation on past
recommendations from the NEITI 2022 Oil and gas industry reports, this includes the
aggregated reoccurring issues identified with further recommendations in the current audit
cycle.

The newly identified and non-reoccurring issues are aggregated under the subsection of
observation, findings and recommendations of the 2023 oil and gas report.

9.1. Update on Remediation Actions on the 2023 EITI
Validation Report

| # | Corrective Issues | Activities, Tasks & Implementation Instruments |
| --- | --- | --- |
| A | Stakeholder Engagement Component |  |
| 1 | The government should ensure NSWG is consistently constituted on time and that there is sufficient opportunity for the broader industry and civil society constituencies to nominate their representatives. | FG has reconstituted NWSG and ensured the self-nomination of companies and civil society stakeholders. |
| Sustained implementation of NEITI Policy Guideline on the Nomination of Civil Society and Company representation into the NSWG. |  |  |
| 2 | The government should ensure consistent oversight of the NEITI secretariat, including in its financial management and recruitment practices. | Regular capacity building for NSWG members/supervisory authorities on oversight of the NEITI operations. |
| Regular sensitization/training on the EITI code of conduct for NSWG & NEITI staff members |  |  |
| 3 | Nigeria should ensure that civil society is fully, actively and effectively engaged in all aspects of the EITI process. | Sustained implementation of NEITI Policy Guideline on Nomination of Civil Society representative into the NSWG. |
| Consultation with civil society constituency in the development, implementation, monitoring & evaluation of NEITI country work plan. |  |  |

* * *

| # | Corrective Issues | Activities, Tasks & Implementation Instruments |
| --- | --- | --- |
|  |  | Design & administer information and data gathering template for annual work plan and APR. MSG Consultation/ Approvals of the APR. |
| 4 | Civil society groups must be substantially engaged in the design, implementation, monitoring and evaluation of the EITI process, and ensure that it contributes to public debate. | Sustained and strengthen NEITI-Civil Society Steering Committee, and its quarterly meetings. Sustained implementation of NEITI-Civil Society MoU. |
| 5 | Government is required to ensure that there are no obstacles to civil society participation in the EITI process and to ensure that there is adequate civil society representation in the oversight of Nigeria EITI to represent the constituency’s diversity, | Develop and operationalize NEITI-Civil Society engagement Framework Sustain implementation of NEITI-Civil Society MoU. Guarantee independence of civil society actors in their engagement with NEITI process. |
| 6 | Government should undertake measures to prevent civil society actors from being harassed, intimidated, or persecuted for expressing views related to oil, gas or mining governance. | Conduct targeted engagements with security/law enforcement agencies and secure their commitment on protection of civil society actors that are engaging in natural resources governance. (NEITI is working on MoU with National Human Rights Commission) |
| 7 | Government in collaboration with the NSWG, should document the measures it undertakes to remove any obstacles to civil society participation in the process. | Conduct targeted engagements with security/law enforcement agencies and secure their commitment on protection of civil society actors that are engaging in natural resources governance. Develop and implement NEITI-Civil Society Engagement Framework. |
| 8 | Invitation to civil society and companies’ constituencies to participate in the NSWG should be open and transparent. | Sustain implementation of Civil Society Nomination Policy Guideline. Regular sensitization programs for Secretary to the Government of Federation (SGF) on the global EITI standard & requirements. |

* * *

| # | Corrective Issues |
| --- | --- |
| 9 | Each stakeholder group must have the right to appoint its own representatives, bearing in mind the desirability of pluralistic and diverse representation. The nomination process must be independent and free from any suggestion of coercion. |
| 10 | Each constituency should consider gender balance in their representation to progress towards gender parity. |
| B | Transparency Component |
| 11 | In accordance with requirement 2.3, Nigeria is required to ensure that dates of application and licence coordinates of each extractive licence and contract are publicly accessible for each active licence and contract in the mining, oil and gas sector. |
| 12 | Nigeria is encouraged to pursue its efforts to establish a modern cadastral management system for its oil and gas sector. |
| 13 | In line with requirement 2.4, Nigeria is expected to disclose any contracts and licenses that are granted, entered into or amended from January 1, 2021 |
| 14 | Nigeria is encouraged to publicly disclose any contracts and licenses that provide the terms attached to the exploitation of oil, gas and minerals. |
| 15 | Nigeria should ensure all published contracts and licenses have a reference or link to the location where the contract or licensee is published. |

| Activities, Tasks & Implementation Instruments |
| --- |
| Regular sensitization programs for civil society/companies' constituencies on the global EITI standard& requirements |
| Sustain implementation of NEITI-Civil Society MoU;NEITI-Companies Forum MoU,and Civil Society Nomination Policy Guideline. |
| Developed Framework/Guideline for Guaranteeing independence of Civil Society actors in their engagement with NEITI process |
| Develop and publish NEITI Gender policy |
| Conduct engagement with companies to develop and publish gender policy setting out measures to promote equity in their operations. |
|  |
| Conduct specific engagements with NUPRC,NMDPRA,MCO,NNPC Limited on contracts and licenses disclosure on their website |
| Conduct specific engagements with NUPRC/NMDPRA on the development of a modern cadastral/license register for the oil sector |
| Conduct specific engagements with NUPRC/NNPCL on contract disclosure on their individual websites |
| Conduct specific engagements with NUPRC/NNPCL on contract disclosure on their individual websites |
| Conduct specific engagements with NUPRC/NNPCL on contract disclosure on their individual websites. |
| 16 |
| 17 |
| 18 |
| 19 |
| 20 |
| 21 |
| C |
| 22 |

| Activities, Tasks & Implementation Instruments |
| --- |
| Conduct specific engagements with NUPRC/CAC/NNPCL on BO disclosure on their individual websites |
| Conduct specific engagements with NUPRC/CAC/NNPCL on BO disclosure on their individual websites |
| Conduct specific engagements with NNPCL on BO disclosure on their websites |
| Ensure in subsequent EITI reports the classification of extractive revenue streams that are included in the national budget alongside those that are not providing comprehensive explanations for each category. |
| Ensure in subsequent EITI reports the classification of extractive revenue streams that are included in the national budget alongside those that are not providing comprehensive explanations for each category. |
| Conduct special studies on allocation and utilization of 13% derivation |
| Sustain conduct and publication of NEITI Quarterly Review-Analysis of revenue distribution by Federation Account Allocation Committee(FAAC) |
| The NSWG will convene to discuss and reach a consensus on the definitions and necessity of including Resource Backed Loans,Term Contracts,and DSDP in the materiality document for the next EITI report.Following this discussion,the Board will endorse the EITI report on these items as presented by the Independent Administrator in subsequent board meetings. |

* * *

| # | Corrective Issues | Activities, Tasks & Implementation Instruments |
| --- | --- | --- |
| 23 | Nigeria should identity licenses transferred and the process for transferring licenses, and the technical and financial criteria assessed. | Conduct specific engagements with NUPRC on the disclosure on their website the complete process of license allocation and transfer, including the weightings of the technical and financial criteria assessed |
| 24 | Nigeria should use the EITI to strengthen the oil sector regulator’s systematic disclosures of licensing information, including retention of historical data. | Conduct targeted engagements with relevant agencies and companies on systematic disclosures |
| 25 | Nigeria should demonstrate commitment to resolving bottlenecks such as legal barriers to disclosures, outreach to stakeholders that are not members of the NSWG, use of EITI data and other information to promote public debate. Source: NEITI 2022-2023 OGA, 2024 | Participation of Companies representative in NSWG meetings and programs Participation of companies’ constituency in all NEITI outreaches Regular conduct of NEITI Audit Template Workshop for companies/Covered Entities. Regular Hosting of NEITI-Companies Forum. Feedback from NEITI-Companies Forum is incorporated into NEITI work plan and process. Sustain implementation of NEITI Communication Strategy. |

* * *

9.2. Updates on Past Recommendations from NEITI
2021 and 2022 Oil and Gas Report

| # | Key Point | IA Follow-up and Comments | Further Recommendation |
| --- | --- | --- | --- |
| 1 | Compliance to the NEITI Reporting requirement | The 2021 Oil and Gas Report identified non-compliant entities representing amongst companies covered. To address non-compliance, covered entities were contacted at the commencement of the 2022-2023 NEITI OGA. A sensitization workshop was organized which provided clarifications. Further engagements continued throughout the report production process.The current exercise covered sixty-two (62) companies, including Lekoil non-compliant companies in 2021. There were two(2) non-compliant companies in 2022.Also, there are several instances of delayed and incomplete submissions noted during the review period. | In collaboration with the Federal Ministry of Justice, NEITI should actively enforce the applicable provisions of the NEITI Act, 2007 by implementing relevant sanctions against non-compliant companies. This collaborative effort will ensure that companies failing to meet their reporting obligations face legal consequences.Additionally, NEITI should leverage the NUPRC to enforce compliance through administrative or regulatory tools provided in the relevant sections of the Petroleum Industry Act(PIA).This collaborative strategy will ensure that non-compliant entities are held accountable, ultimately strengthening regulatory adherence while reinforcing transparency and accountability in the extractive sector. |
| 2 | Beneficial Ownership | The 2022-2023 exercise required companies to submit information on their ultimate Beneficial Owners(BO), aiming to unravel the complex structures that obscure the identity of the owners. These efforts by the Independent Administrator(IA) complemented NEITI's existing BO disclosure portals, further promoting transparency and accountability. | The NUPRC to expedite the update of Beneficial Ownership(BO) data disclosed through the NOGABORin line with the relevant sections of the Petroleum Industry Act(PIA). |
|  |  | In addition, as of the time of reporting, BO data for only 96 individuals has been disclosed through the NUPRC BO portal-NOGABOR, with some entries still listing company names instead of individuals—an anomaly that needs urgent correction. | Furthermore, the Commission should ensure the integration of the NOGABOR with, eventually the web-enabled Comprehensive Register of Licenses (the equivalent of an updated Dynamic Acreage Management System-DAMS used by the defunct DPR) for the oil and gas sector. |
| 3 | Production from PSC Blocks | During the current audit, the IA reviewed the status of non-operational Production Sharing Contract(PSC) blocks and other idle blocks that were highlighted in the 2021 oil and gas report.In addition,the NUPRC has initiated bidding rounds for some blocks under the marginal field production arrangement. | NUPRC and NNPC Limited are to encourage Financial and Technical Service Agreement(FTSA)as part of the investment instrumentations to jumpstart full and timely implementation of approved FDP in line with the Climate Change Act,2021 and Energy Transition Plans.Furthermore,NNPC Limited,through the proper consultation with Bureau of Public Enterprises(BPE)和the Infrastructure Concessioning Regulatory Commission(ICRC),should mobilize investment for the development of oil and gas assets. |
| 4 | Nigeria-Sao Tome and Principe Joint Development Authority(JDA) | IA observed absence of exploration and production activities at the Joint Development Zone(JDZ).The identified key challenge is the non-responsiveness and willingness of license holders to invest in the allocated licenses. | The Federal Government should review the operational framework of the JDA to enhance operational efficiency and consider reallocating licenses or blocks to investors who are ready, willing,and able.Additionally,the NUPRC 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 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%)and4.302 million barrels production/terminal adjustment(2.6%) | Federal Government through the NUPRC should consider viable Public-Private Partnership(PPP) arrangement on the deployment of advanced digital solution on the monetization of savings from crude losses. |
| Also set up a special funds and a standby committee on crude loss prevention and security of oil and gas assets for a more coordinated 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. |  |  |  |
|  |  | 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 Expenditure(QFE) | NNPCL have been subrogated by Section 54 of the PIA that created the NNPC Limited.There is no express provision in the PIA as to whether NNPC Limited should submit its budget to the NASS scrutiny.By implication,no clarity on the interpretation of quasi-fiscal expenditures. | The NEITI should request and obtain detailed explanations from the Federal Ministry of Finance and the Budget Office of the Federation regarding the budgeting process for the Nigerian National Petroleum Corporation(NNPC)Limited,considering its status as a company governed by the Companies and Allied Matters Act(CAMA). |
|  |  | Quasi-Fiscal Expenditure and deductions from FAAC by NNPCL was N12.425 billion on pipeline security and maintenance from January to June 2022(2021:US$6.931billion/N2.651 trillion). Furthermore, PMS under recovery/price differentials of N4.71 trillion in 2022 and 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. |  |  |  |
| For the first 6 months of the year 2022(i.e.,Jan-June),QFE and deductions stood at N12.425 billion on pipeline security and maintenance from January to June 2022.No QFE was recorded for the year 2023 due to the PIA implementation. | Additionally,NEITI should advocate for similar clarifications to be incorporated into updates of the Petroleum Industry Act(PIA).This will ensure transparency and consistency in how SOEs like NNPC Limited are integrated into national fiscal frameworks and regulatory updates. |  |  |
| 7 | Outstanding Liabilities payable to FIRS and NUPRC | Total liabilities from the sector are US$6.175 billion comprising US$6.072 billion and N66.378 billion(equivalent of US$102.765)owed to the NUPRC and the FIRS.The liabilities for the 2021 NEITI extractive reporting was US$8.264 billion. |  |
| At the time of reporting,there was no evidence of a comprehensive investigation into the timeliness of liability payments. | The Report advocates for NEITI to encourage Revenue Generating Agencies(RGA)to consider involving the Federal Ministry of Justice to address perpetual debt situations and payments made into RGA collection accounts.This collaboration will provide a comprehensive understanding of the legal implications surrounding perpetual debts,ensuring adherence to relevant legal frameworks. |  |  |

* * *

| # | Key Point | IA Follow-up and Comments | Further Recommendation |
| --- | --- | --- | --- |
|  |  | This lack of scrutiny raises concerns about whether payments are being made promptly and in accordance with regulatory and contractual obligations. A detailed investigation could provide insights into potential delays or inefficiencies and help ensure that financial responsibilities are met in a timely manner. | Integrating insights from the Ministry of Justice will help develop policies to effectively address challenges associated with these debts and establish clear guidelines for managing payments. |
| Additionally, this partnership can strengthen the enforcement of legal measures related to debt recovery, safeguarding the Federations interests. |  |  |  |
| 8 | NDDC levies | As part of the reporting process, the IA reviewed the Economic and Financial Crimes Commission's (EFCC) recovery of unpaid levies owed to the Niger Delta Development Commission(NDDC)from previous periods.The audit highlighted the need for a reconciliation of the recoveries made by the EFCC. This reconciliation would serve to accurately determine any outstanding levies and ensure that the recoveries are properly aligned with the NDDC's financial records. | The NEITI should formally update the Presidency on the urgency of expediting the reconciliation of recoveries made by the Economic and Financial Crimes Commission(EFCC)on behalf of the Niger Delta Development Commission(NDDC).This process should be coordinated through the Office of the Attorney-General of the Federation and Minister of Justice. |
| 9 | Pre-export financing and Project Eagle | The IA reviewed the disclosure of NNPC Limited's fiscal commitments, loans, guarantees,and contingent liabilities from the 2021 reporting period.During this review,the IA also took note of an audit commissioned by the Federal Ministry of Finance to examine PMS subsidy-related financial transactions between NNPCLand the Federation,which hadthe goal of determining all associated liabilities. | NNPC Limited should ensure comprehensive disclosure of all fiscal obligations,including the monthly,quarterly,and annual accumulation and repayment of these obligations,on its official website.This is in line with its commitment as a supporting company of the Extractive Industries Transparency Initiative(EITI)and as a State-Owned Enterprise(SOE)operatinginanEITI-implementingcountry. |
|  |  | 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. |  |
| 10 | NLNG Payments | The IA examined the payments from the NLNG company received by NNPLC, which were subsequently transferred 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. | The NNPC Limited should ensure continuous accountability of NLNG payments received on behalf the government. |
| 11 | Transportation revenue | Transportation revenue was US$153.975 million in 2023 and US$51.822 million in 2022(2021:US$194.85 million and N9.73 billion).Prior to PIA implementation,NNPC still did not disclose tariff rate and volumes with respect to what was paid to NNPC by the JV operators received on behalf of the Federation. | Although Joint Venture(JV) assets were subrogated to NNPC Limited starting in July 2022,there remains,for part of the review period,a critical need for full disclosure of the tariff rates that operators charge for the use of JV pipelines.These tariff rates are crucial as they determine the amounts remitted to NNPC,which holds partial ownership of these assets. |
|  |  | However, since the implantation of the PIA, JV assets have been subrogated to NNPC Limited. | Transparent reporting of these rates is essential for accountability and to ensure that the revenues generated align with NNPC's share of the JV assets, thereby supporting accurate financial reporting.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 revenue | The report reviewed miscellaneous revenue figures,which were US$17.487 million in 2023 and US$4.279 million in 2022.This contrasts with the figures for 2021,which were US$702.19 million and N343.56 million.The report finds that the basis for the miscellaneous revenue disclosed by NNPC Limited remains unclear.This lack of 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. | NNPC Limited should provide a detailed breakdown of miscellaneous revenue sources and align reporting practices with international standards,such as IFRS,to ensure transparency and comparability.Comprehensive disclosure in financial statements,including explanatory notes,will enhance clarity and stakeholder trust. |
| 13 | Revenue from trial marketing period | There were no indications of Trial marketing period in 2022 and 2023.The IA examined revenue from TMP for 2021:US$278.813 million earned from First E&P JV by the Federation but not swept to the Federation.NNPC could not confirm that the funds went into the Federations account. | NEITI should advocate for the Revenue Mobilization Allocation and Fiscal Commission (RMAFC),Ministry of Justice, Ministry of Finance,and Ministry of Petroleum Resources to conduct a comprehensive forensic audit 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. |
| 14 | Revenue from OML 116 | IA examined the crude lifted from OML 116 operated by NEPL(formerly operated by AENR under service contract).The IA determines that NNPCL could not demonstrate that US$7.61 million from OML 116 was transferred to the Federation account before NNPC Limited subrogation. | Revenue Mobilization Allocation and Fiscal Commission(RMAFC),Ministry of Justice, Ministry of Finance and Ministry of Petroleum Resources should carry out a detailed post-mortem valuation of Federation assets subrogated to NNPC Limited at PIA implementation to determine the good and valuable consideration due to the Federation. |
| 15 | Cash call | The IA post examination of cash call payments determines that NNPCL could not demonstrate thatNUIMS has offset the 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 2023:US$162.912 million and 2022:US$63.150 million(2021:N11.470 billion and US$29.218 million)on assets transferred to NPDC since 2019. | = same as above= |
| 16 | Update on Refineries Activities | As of the time of publishing this report, none of the four (4) government owned refineries were in operation.The Report states that no information was provided by NNPCL regarding refinery rehabilitation cost by NNPCL for the year 2023. Note that for the years 2020 and 2021:N200 billion naira was expended on the refineries. | The NEITI to encourage the NNPC Limited,in consultation with Bureau of Public Enterprises(BPE)和the Infrastructure Concessioning Regulatory Commission(ICRC),should concession the refineries to other private investors. |
| 17 | Deductions from the Federation crude sales proceeds | IA examined domestic crude sales deductions which are as reported in FAAC reports.Under recovery/price differentials accounted forN3.01 trillion in 2023 andN4.71 trillion in 2022,Crude and product losses were$637.44 million for2023(2022: $3.705 billion) | Revenue Mobilization Allocation and Fiscal Commission(RMAFC),Ministry of Justice,Ministry of Finance and Ministry of Petroleum Resources should carry out further review of past deduction and provide budgetary guidance and compliance accordingly.Pipeline repairs accounted forJanuary to June 2022 charged toFAAC wasN12.425 billion. |
| 18 | Conversion of FIRS tax oil and NUPRC royalty oil to DSDP. | The IA examined the conversion of FIRS tax oil and NUPRC royalty oil for the Direct Sale of Crude Oil and Purchase(DSDP) arrangement.The audit confirms that this arrangement persisted into the current period and domestic sales are still done at90 days. | Revenue Mobilization Allocation and Fiscal Commission(RMAFC),Ministry of Justice,Ministry of Finance and Ministry of Petroleum Resources should carry out a review of the entire process of convertingFIRS tax oil and NUPRC royalty oil toDSDP and provide documentary guidance. |
|  |  | 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 within90 days in Naira to the Federation account at the CBN.This practice allowed NNPCLto benefit from fluctuations in foreign exchange rates. |  |
| 19 | Outstanding liabilities onPSC Taxes and Royalty Oil | The report established that there was no indication that NNPCLmade substantial commitments toward settling its outstanding obligations to the(FIRSand theNUPRCin2022. | NEITI should advocate forRGA to intensify efforts to recover debt. |
| 20 | Revenue fromEGTLtransactions | Escravos gas to liquid(EGTL)were aggregated into gas natural gas liquids ofUS$1.124 billion in2023andUS$701.287 million in2022(2021:US$242.05 millionincludedinexportgas sales ofUS$414.23million,US$20.22 millionwasreceivedinto theCNLproceedaccountwithabalanceofUS$221.82million).IA further examined theNNPCLimited responses that8% of gross revenueis payable as price balance per contract agreementandthe revenues arefromanSPVprojectin partnership withChevron.The IA could not analyze theBank statementfor theSPVasitwasnotpresentedbyNNPCLimited. | RevenueMobilizationAllocationandFiscalCommission(RMAFC),Ministry of Justice,Ministry ofFinanceandMinistry ofPetroleumResourcesshouldconductforensicauditonallincomegeneratingassetsoftheNNPCLimitedtoensureoptimalrevenue generation,asthisformsthebasisofdeterminingdividend declaration. |

* * *

| # | Key Point | IA Follow-up and Comments | Further Recommendation |
| --- | --- | --- | --- |
| 21 | Non-cash call payment | IA examined the practices of 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. | == same as above== |

* * *

| # | Key Point | IA Follow-up and Comments | Further Recommendation |
| --- | --- | --- | --- |
| 22 | NNPC recordsVs NAPIMSAFS. | IA examines data management process and establishment of controls to prevent discrepancy. |  |
| It was observed that NNPC limited is yet to address data synchronisation issues. |  |  |  |
| For instance, aggregated total crude sales revenue determined by the 2022-2023 NEITI extractive reporting was N10.284 trillion as against crude oil sales revenue of N12.026 trillion stated in the 2023 audited financial statements of NNPC Limited.A variance of N1.742 trillion(17%) | The report recommends that NNPC should improve data management processes and establish controls to prevent future discrepancies.NNPC should ensure regular monitoring,and data reconciliation to mitigate recurrence of discrepancies among NNPC Limited business units. |  |  |
| 23 | 13% Derivation | The IA examined the previous recommendation advising the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) and the Office of the Accountant General of the Federation(OAGF)to discontinue computing the 13% 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. | Revenue Mobilization Allocation and Fiscal Commission(RMAFC)和Ministry of Justice to provide documentary guidance on the intent of Section 162(2)of the constitution of the Federal Republic of Nigeria on the 13% derivation. |

* * *

| # | Key Point | IA Follow-up and Comments | Further Recommendation |
| --- | --- | --- | --- |
| 24 | Environment Regulations | IA examined the recommendation on the need to have clear delineation of roles in the administration of environment regulations to avoid potential conflicts between the regulatory agencies. • Gas flaring (Gas facilities set-up or gas flaring for testing or operational reasons) – There should be a specified limit in the contract that is allowable for facility set-up for gas flaring. This is expected to 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. | The Federal Ministry of Justice should provide comprehensive documentary guidance to support the harmonization and application of environmental regulations. This guidance should outline standardized procedures and legal frameworks to ensure consistent enforcement and compliance across different jurisdictions and sectors. Such documentation will facilitate better coordination among regulatory bodies and stakeholders, enhancing the effectiveness of environmental protection efforts. |

* * *

| # | Key Point | IA Follow-up and Comments | Further Recommendation |
| --- | --- | --- | --- |
| 25 | NEITI Audit Remediation: | IA examined the coordination of remediation matters from previous NEITI audit Report and observed the following: |  |
| ·NEITI has created a Remediation Unit as an internal organ responsible for coordinating all the remediation actions. |  |  |  |
| ·The Remediation Unit recreated the Inter-Ministerial Task Team (IMTT) to drive implementation across relevant Ministries, Departments and Agencies (MDA). | It is recommended that NEITI should intensify remediation actions amongst stakeholders through its newly created Remediation Unit and the IMTT. |  |  |
| 26 | Issues related to PIA. | The IA examined thorny issues regarding the PIA as outlined below: |  |
| ·Section 64(m) of the Petroleum Industry Act (PIA) contains ambiguity regarding the allocation of 30% for both the management fee and the Frontier Exploration Fund (FEF). The PIA lacks precise definitions for key terms such as "profit oil" and "management fee," which may lead to uncertainty in interpreting how these allocations should be applied. |  |  |  |
| ·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. | The report recommends that the Federal Ministry of Justice provide documentary guidance to harmonize and clarify aggregated issues within the Petroleum Industry Act (PIA). Specifically, there is a need for clarification on the following: |  |  |
| ·Contribution to Environmental Funds: The procedures for contributing to the Midstream and Downstream Environmental Funds. |  |  |  |
| ·Utilization of Penalties and Payments: The handling of flare gas penalties and flare gas payments. |  |  |  |

* * *

| # | Key Point | IA Follow-up and Comments | Further Recommendation |
| --- | --- | --- | --- |
|  |  | If the intention is to establish a single 30% retention that covers both the management fee and the Frontier Exploration Fund (FEF), the wording should be rephrased to explicitly reflect this. Alternatively, if separate 30% retentions are intended for each allocation, the language should be revised to clearly delineate these distinct provisions. Ensuring precise wording will prevent misunderstandings and facilitate accurate implementation of the provisions. | Additionally, in accordance with the PIA,2021, which mandates the Minister of Petroleum and the Minister of Finance to identify and transfer assets, interests, and liabilities from NNPC to NNPCL within 18 months of the PIA's effective date,a detailed post-mortem valuation of Federation assets transferred to NNPC Limited should be conducted.This valuation will determine the appropriate goods and valuable considerations owed to the Federation. |
| 27 | Award of Marginal Field | The IA examined the Regulations on the bidding process which requires payment of signature bonus prior to the award of contract by all successful applicants named in the Notice of Preferred Bidder Status.The IA confirms that bidding guidelines were published in adherence to the provisions of the regulation. | NUPRC should adhere strictly to all regulations and,if any waivers or exemptions are granted,they should publicly disclose these exceptions to ensure transparency and accountability in its practices. |
| 28 | Discrepancy in PMS importation between NNPC and NMDPRA | The report established that discrepancies persist between the records of NNPC Limited and the NMDPRA.This issue is currently under review in an audit commissioned by the government through the Federal Ministry of Finance,which is focused on examining price differentials for Premium Motor Spirit(PMS)to verify NNPC Limited's claims. | Independent Audits:The NMDPRA should conduct continuous ante-mortem independent and third-party audits of imported petroleum quantities and landing costs at the point of discharge.These audits should also advise the Debt Management Office(DMO)on price differentials and under-recovery claims of NNPC Limited,similar to practices followed during the operation of the defunct PPPRA. |
|  |  | In the first instance, NMDPRA records shows 3.29 billion litres of PMS importation for NNPC Limited while NNPC Limited record showed 6.30 billion litres for product importation in 2022. A variance of 3.01 billion litres (92%). Furthermore, this was observed in 2023, NMDPRA record shows 6.02 billion litres and NNPC Limited records shows 3.9 billion litres. A variance of 2.12 billion litres (35%) In another instance, NNPC Ltd valuation record shows PMS importation of 22.93 billion litres valued at N7.39 trillion in 2022 and 14.53 billion litres valued at N6.74 trillion in 2023. | Real-Time Data Aggregation: NMDPRA should implement mechanisms for near real-time tracking of petroleum product consumption nationwide. This initiative should align with the relevant sections of the PIA. |
| Discontinue misclassification: The practice of classifying petroleum products at the point of discharge as consumption should be discontinued. And further intentional efforts should be instituted to track and report actual consumption. |  |  |  |
| 29 | Potential loss of revenue to the Federation upon the Implementation of PIA | The IA observed no significant implementation of several recommendations from the 2021 oil and gas sector report, including: |  |
| • Enhanced Revenue Forecasting: There has been no substantial progress in improving revenue forecasting through comprehensive asset-based budgeting. |  |  |  |
| • Policy Trade-offs Review: The review of policy trade-offs remains inadequately addressed. |  |  |  |
| • Regular Review and Adjustment: There has been a lack of effective implementation of regular review and adjustment processes. | Implement Outstanding Recommendations: The relevant authorities should promptly address the unimplemented recommendations from the 2021 oil and gas sector report, including enhancing revenue forecasting through asset-based budgeting, reviewing policy trade-offs, and instituting regular review and adjustment processes.This will provide a solid foundation for future assessments and improve overall sector management. |  |  |

* * *

| # | Key Point | IA Follow-up and Comments | Further Recommendation |
| --- | --- | --- | --- |
|  |  | The strategy was expected to include robust oversight and transparent fund management mechanisms through the NMDPRA in collaboration with relevant stakeholders. |  |
| There has also been no significant progress in revisiting the functions of the Niger Delta Development Commission (NDDC) to align them with the host community development funds established by the PIA. Clearly defined 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. | ·Develop and Enforce Optimization Strategies: The government should prioritize the development of an optimization strategy for Environmental Fund Allocation, incorporating robust oversight and transparent fund management mechanisms through the NMDPRA. |  |  |
| Additionally, there should be a clear alignment of the functions of the Niger Delta Development Commission (NDDC) with the host community development funds established by the PIA to ensure efficient use of resources and reduce operational costs. |  |  |  |

In 2023, in addition to updating the 2021-2022 findings and recommendations to reflect the
current state, newly identified non-reoccurring issues were aggregated and presented as
observations, findings, and recommendations in the 2023 oil and gas report, as outlined in the
table below.

9.3. Observations, Finding and Recommendations

* * *

Table 84: Observations and Recommendations for 2022-2023 Extractive Reporting

| # | Observations/ Findings | Implications |
| --- | --- | --- |
| 1 | National Grid System for Acreage Management: |  |
| The National Grid Systems is expected to have addressed the following: |  |  |
| ·Define license and lease areas |  |  |
| ·Identified relinquished assets. |  |  |
| ·Identification of well locations |  |  |
| ·Petroleum conservation measures. | Non-compliance with sections (1-7) Part 11-Administration Upstream Petroleum Operation and Environment of the PI 2021 |  |
| Impact: |  |  |
| Rating: Non-Compliance |  |  |
| Interpretation: Not Favourable |  |  |
| Priority: |  |  |
| High and immediately |  |  |
| 2 | Upstream Register of License: |  |
| It was observed that NUPRC have not publicly disclosed Register of Licenses. The examined publicly document titled “Concession Situation” do not meet the requirement of a Register as it does not contain the owners of those licenses, the location coordinates and the production arrangement (contract type) are not updated. | Non-compliance with section 219, 222, 223, 224 of the PI 2021. |  |
| Impact: |  |  |
| Rating: Non-Compliance |  |  |
| Interpretation: Not Favourable |  |  |
| Priority: |  |  |
|  | High and immediately |  |

|  | Responsibility | Entity's Response | Recommendations |
| --- | --- | --- | --- |
| 69 of issues A, | NUPRC/ National Security Adviser (NSA)/ Surveyor-General/ Ministry of Petroleum Resources(Oil and Gas) | The Commission is yet to be publicly disclosed on website considering that the project is work-in-progress. However,the Surveyor-General approval to convert to UTM has been secured. | NUPRC and other stakeholders to accelerate the deployment of a National Grid System for the administration and safeguards of the upstream petroleum operations and assets. |
| ns A, | NUPRC and Ministry of Petroleum Resources(Oil and Gas) | Concession situation report is operational and om the Commission's website.See [https://www.nuprc.gov.ng/.However,the](https://www.nuprc.gov.ng/.However,the) portal is being upgraded to a Dynamic Acreage Management System(DAMS) | NUPRC to establish and make publicly available comprehensive register incorporating the following:Leases,licenses, permits and authorization issued,revoked,suspended,surrendered or withdrawn with any modification or exemptions granted. |

* * *

| # | Observations/ Findings | Implications | Responsibility | Entity's Response | Recommendations |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  | Extension, transfer, surrender and revocation. |
| Exemption and 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 |  |  |  |  |  |
| NUPRC and stakeholders are to accelerate the implementation of the relevant sections in the PIA to set up Decommissioning and Abandonment Fund. |  |  |  |  |  |
| 3 | Decommissioning and Abandonment Fund |  |  |  |  |
| Non-activation of the Fund over three (3) years after the PIA, 2021. | Non-compliance with sections 232 and 233 of the PIA, 2021. |  |  |  |  |
| Impact: |  |  |  |  |  |
| Rating: Non-Compliance |  |  |  |  |  |
| Interpretation: Not Favourable |  |  |  |  |  |
| Priority: |  |  |  |  |  |
| High and immediately | NUPRC, CBN, Ministry of Finance, and Ministry of Petroleum Resources(Oil and Gas) | Inactive account with CBN. Engagement is ongoing with License and Lease Operators |  |  |  |

* * *

| # | Observations/Findings | Implications |
| --- | --- | --- |
|  | The Fund and accompanying Decommissioning and Abandonment Plan (DAP) is instrumental to the addressing Climate Change through cash provisioning for future impact of the sectors activities on the environment. |  |
| 4 | Upstream Environmental Remediation Fund: |  |
| Non-activation of financial contribution to the Fund and related activities in line with the PIA. This is to finance rehabilitation and manage negative environmental impacts from petroleum operations (i.e. upstream petroleum operations and petroleum operations under section 8(g) of the Petroleum Industry Act, 2021). | Non-compliance with 103 of the Petroleum Act, 2021. |  |
| Impact: |  |  |
| Rating: Non-Competition Interpretation: Not Favorable |  |  |
| Priority: |  |  |
| High and immediately |  |  |

|  | Responsibility | Entity's Response | Recommendations |
| --- | --- | --- | --- |
|  |  |  | It should be set up not later than three(3)months from the date of commencement of production in the case of new licences or leases,or one year from the effective date of the Regulations for existing licenses or leases of a producing field.Furthermore,operators are to notify the Commission not later than 14days from the date of establishment of the fund. |
| section Industry | NUPRC,CBN,Ministry of Finance,and Ministry of Petroleum Resources(Oil and Gas) | The regulation on Upstream Environmental Remediation Fundin still in the draft stage and yet to be gazetted | NUPRC is to ensure that the Upstream Environmental Remediation FundRegulations as prescribed under section103of the PIA,2021is gazetted to demonstrate institutional readiness to mitigating the effect of climate change. |
| lianceurable |  |  |  |
|  |  |  |  |

* * *

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

* * *

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

* * *

| # | Observations/ Findings | Implications | Facts |
| --- | --- | --- | --- |
| 6 | NUPRC Revenue Reporting: |  |  |
| The following were observed: |  |  |  |
| • Payment by companies into NUPRC revenue collection account not designated for the revenue type, making a bulk payment for royalty, concession rent and gas flare into the royalty account. |  |  |  |
| • Non-availability of comprehensive signed-off reports for liabilities. | • Payment into non-designated revenue collection account result distorts end-to-end tracking and reporting of the revenue type. Also, it results in reconciliation challenge. |  |  |
| • Non-availability of signed-off reports for liabilities may result to financial risk considering lack of basis acknowledging the liabilities in the event of litigation. |  |  |  |
| Impact: |  |  |  |
| Rating: Partial Compliance |  |  |  |
| Interpretation: Tolerance |  |  |  |
| Priority: |  |  |  |
| Medium but immediately |  |  |  |
| 7 | Midstream and Downstream Register of License: |  |  |
| It was observed that NMDPRA have not publicly disclosed Register of Licenses and awardees in line with section 219, 222 and 224 of the PIA, 2021. | Non-compliance with sections 219, 222, and 224 of the PIA, 2021. |  |  |
| Impact: |  |  |  |
| Rating: Non-Compliance |  |  |  |
| Interpretation: Not Favourable |  |  |  |
| Priority: |  |  |  |
| High and immediately |  |  |  |

| Responsibility | Entity's Response | Recommendations |
| --- | --- | --- |
| NUPRC |  | NUPRC to ensure: |
| · Ensure that each bank statement is reconciled to show the name of payee, name of the ultimate beneficiary, purpose of payment to ease future reconciliation. |  |  |
| · Set up a practice of issuing a service notice/demand note to all companies with outstanding liabilities, quarterly and annually. |  |  |
| NMDPRA and Ministry of Petroleum Resources (Oil and Gas) |  | NMDPRA and stakeholders should make publicly available, a comprehensive register incorporating the following: |
| · Leases, licenses, permits and authorization issued, revoked, suspended, surrendered or withdrawn. |  |  |

* * *

| # | Observations/Findings | Implications |
| --- | --- | --- |
|  | Also, section 32(x) requires NMDPRA to establish public and non-public registries in respect of issued licenses, permits and authorizations. |  |
| 8 | Framework for pricing and tariff: |  |
| It was observed that NMDPRA have not publicly disclosed the pricing and tariff for natural gas in midstream and downstream gas operation and petroleum products in line with relevant sections of the PIA,2021. | Non-compliance with section (L),122 and 123 of the PIA |  |
| Impact: |  |  |
| Rating: Non-Compliance |  |  |
| Interpretation: Not favourable |  |  |
| Priority: |  |  |
|  | High and immediately |  |

|  | Responsibility | Entity's Response | Recommendations |
| --- | --- | --- | --- |
|  |  |  | Extension, transfer or surrender revocation. |
| Exemption relinquishment |  |  |  |
| Change of address name |  |  |  |
| Other matter affecting the status of interest |  |  |  |
| Description of the right vested in the person named as the holder |  |  |  |
| Conditions and other provisions the holder subjected to. |  |  |  |
| Public accessible during designated hours and days |  |  |  |
| Electronically up to date |  |  |  |
| Ins 31. | NMDPRA and Ministry of Petroleum Resources(Oil and Gas) |  | NMDPRA and stakeholder should accelerate action to deploy frameworks for pricing and tariff for petroleum products in midstream and downstream in line with the relevant sections of PIA,2021. |
| enceable |  |  |  |
|  |  |  |  |

* * *

| # | Observations/Findings | Implications | Responsibility | Entity's Response | Recommendations |
| --- | --- | --- | --- | --- | --- |
|  | Section 31(L) requires that NMDPRA is to develop and enforce a framework on tariff and pricing for natural gas and petroleum products. |  |  |  | Pricing frameworks to includes refinery operations, and gas processing, marketing, and 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. |  |  |  |  |

* * *

| # | Observations/ Findings | Implications | Responsibility | Entity's Response | Recommendations |
| --- | --- | --- | --- | --- | --- |
| 9 | Cases of Petroleum Products Losses arising from Pipeline breaks, theft and sabotage: |  |  |  |  |
| It was observed that there is no institutionalized industry-wide control mechanism to aggregate the incidence of petroleum product losses arising from 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. | Non-compliance with sections 32 (gg)(mm)和33(q)of the PIA,2021. |  |  |  |  |
| Impact: |  |  |  |  |  |
| Rating: Non-Compliance |  |  |  |  |  |
| Interpretation: Not Favourable |  |  |  |  |  |
| Priority: |  |  |  |  |  |
| High and immediately | NMDPRA and Ministry of Petroleum Resources(Oil and Gas) |  | NMDPRA and stakeholders should accelerate actions to deploy a database and platform for aggregating cases of petroleum products losses that could disrupt optimal availability of petroleum products. |  |  |

* * *

| # | Observations/ Findings | Implications |
| --- | --- | --- |
| 10 | Product Importation Valuation: | Non-compliance with sections 3 (L), and 122 of the PIA, 2021. |
| It was observed that NNPC Limited: | Impact: |  |
| Petroleum importation valuations were carried out by the NNPC Limited upon which first-line deductions were made including subsidy/price differentials arising from PMS importation. Though in line with section 64(m). | Rating: Non-ComplianceInterpretation: Not Favourable |  |
| Section 64(m) requires NNPC Ltd to be supplier of last resort for security reasons and all associated costs shall be for the account of the Federation. | Priority: |  |
| Petroleum importation volume is in disparity with the record of the NMDPRA.For instance:\\n√2023:NMDPRA(6.02 billion litres);NNPC Ltd(3.88 billion litres). | High and immediately |  |

|  | Responsibility | Entity's Response | Recommendations |
| --- | --- | --- | --- |
| 1 | NNPC Limited,NMDPRA and Ministry of Petroleum Resources(Oil and Gas) |  | NMDPRA and NNPC Limited should collaborate to carry out a postmortem reconciliation of petroleum product importation especially as regards claims for subsidy/price differentials.Furthermore,NNPC Limited should discontinue the practice of unilateral valuation of petroleum products especially if it relates to product valuation with potential claims of price differentials/subsidy from the government in line with Section 64(m).NNPC Ltd should align petroleum products pricing with the pricing framework established by theNMDPRA in line section122of thePIA,2021. |

* * *

| # | Observations/ Findings | Implications | Responsibility | Entity's Response | Recommendations |
| --- | --- | --- | --- | --- | --- |
|  | √2022:NMDPRA(3.29 billion litres);NNPC Ltd(6.27 billion litres).Section 31(L)requires thatNMDPRA 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 Production,Lifting and utilisation:It was observed that there are challenges on internal data within NNPC Limited and Business Units.For example,there was difficulty in reconciling theNUIMS lifting record with theNTL lifting and sales record. | Difficulty in reconciling internal data implies inconsistent data managementImpact:Rating:Partial ComplianceInterpretation:TolerancePriority:High and immediately | NNPC Limited(NUIMS and NTL) |  | NNPC LimitedNNPC Limited is to ensure regular internal reconciliation. |
| 12 | NNPCL Revenue Reporting: |  |  |  |  |
| The following were observed: |  |  |  |  |  |
| • Non-disaggregation of revenue with schedules for each of the owners of the crude oil and gas. Furthermore, not clearly showing where the funds were transferred end-to-end. |  |  |  |  |  |
| • Utilisation of PSC Profit oil for NNPC Limited fiscal loans and commitment. |  |  |  |  |  |
| Section 64(b) requires NNPC Limited to be the 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. | Non-disaggregation of revenue across owners of crude leads of difficulty in reconciliation and risk of comingling and abuse. |  |  |  |  |
| Furthermore, it implies non-compliance with sections 64(b)(c) of the PIA, 2021. | NNPC Limited |  | NNPC Limited should disaggregate crude oil lifting and sales record across owners of crude oil and gas for more transparency and accountability in line with sections 64(b)(c) of the PIA, 2021. |  |  |
| Impact: |  |  |  |  |  |
| Rating: Non-Compliance |  |  |  |  |  |
| Interpretation: Not Favourable |  |  |  |  |  |
| Priority: |  |  |  |  |  |
| High and immediately |  |  |  |  |  |

=10000001

* * *

# 9.4. 2022-2023 NEITI Oil and Gas Industry Audit – Key Reform Issues

The 2022-2023 NEITI Oil and Gas Industry Audit report carefully reviewed and aligned strongly with the policy advisory by the Nigeria Extractive Industries Transparency Initiative (NEITI) in June 2003. The Policy Advisory drew government's urgent attention to important issues in Nigeria's oil, gas, and mining sectors that require deliberate policy interventions to pave the way forward in order to strengthen ongoing sector reforms.

The report findings represent the highlight of the issues in the critical areas of the sector's reforms and the need for the government to re-examine and consider immediate steps to be taken to address these issues. This is important and urgent to reduce tension in the industry, rebuild trust, block leakages, improve efficiency, attract investments, shore up domestic revenue mobilisation through deliberate policies that strengthens the ongoing reforms in the sector. Some of the key reform highlights include:

## 1\. Re-constitution of a Presidential Steering Committee on Implementing the Petroleum

## Industry Act: The findings of the NEITI report indicate a slow pace in the implementation

the Petroleum Industry Act (2021). This has created a delay in the realization of the impact and objectives of the law, particularly in increasing investment in the oil and gas sector. According to reports, Nigeria attracted only 5% of the total investment flows to the oil and sector in Africa in the year 2023. This highlights the need reconstitute the Presidential Steering Committee on Implementation of the PIA, with a key role for NEITI. The committee would need to redesign a comprehensive implementation plan for the PIA (2021). The current approach of implementing such an important law without a national plan is a major challenge and a huge policy gap that needs to be urgently addressed.

**2\. Tackling Oil theft: The report indicates a decline in crude theft across the two years under** review. The losses due to crude oil theft and sabotage reduced to 14% of total metered production in 2022 (a total of 21 million barrels) while in 2023 it was only 3% at a total of
5.5 million barrels. In the policy brief referred to above, NEITI highlighted the need for government to tackle the scourge of oil theft and sabotage. The drastic drop in the menace is a clear indication that the various government efforts and initiatives were effective particularly in 2023.

## 3\. Developing a Gas Utilization Policy with Linkages to Nigeria's Energy Transition

## Plan: Total gas flares continued its downward trend in 2022 and 2023, falling from 250

billion scf in 2021 to 209 billion scf in 2022 and 194 billion scf in 2023. This reflects the impact of government initiatives to reduce gas flaring. However, the report also highlights a decline in overall gas production from by 11.11% in 2022, and further by 8% in 2023. This development calls for an urgent review of the implementation of the various policy frameworks guiding the maximization of Nigeria’s huge gas potential and the need to ensure that the gas development policies are linked with the objective of Nigeria’s Energy Transition plan as it relates to utilizing gas as a transition energy.

* * *

## 4\. Fast-tracking the repairs of government-owned refineries: NEITI has maintained

advocacy on the need for government to improve local refining capacity by ensuring that existing refineries are functional particularly as a means of addressing local demand for products and minimising importation and the associated costs and impact on the economy. The latest NEITI report confirms that government has embarked on an ambitious rehabilitation programme, particularly focusing on the Port Harcourt refinery. In addition, the downstream sector is undergoing significant deregulation, with the removal of fuel subsidies and the introduction of market-based pricing.

Overall, NEITI is poised to continually drive reforms in the extractives through its regular generation and dissemination of data related to the management and governance of the sector. NEITI has repositioned itself to continue to play a thought leadership role in the sector through innovation and the application of lessons learned from over two decades of implementing the EITI in Nigeria. For instance, the state-of-the- art Data Centre recently established by NEITI serves as a one-stop shop for all extractives data and a repository of data and knowledge that can serve a wide range of stakeholders. It will further NEITI objective of advancing public understanding and engagement with extractives data and inform debate and discussions on improving the performance of Nigeria’s extractives sector.