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$56m Royalty Debt: Reps Threaten To Suspend Firm’s Operating Licence



An adhoc committee of the House of Representatives investigating oil revenue leakages and the activities of the Department of Petroleum Resources (DPR), yesterday directed New Cross Energy Limited to provide evidence of royalty payment or risk suspension of its operating license.
Representatives of the oil firm, Adesina Shittu, while offering explanations before the committee, noted that his company was reconciling payment plan with the DPR and would commence payment as soon as the plan was concluded.
The committee was however not persuaded by his argument, and threatened suspension of the company’s operating license pending when it was able to pay its debts.
Chairman of the committee, Hon Jarigbe Agom Jarigbe, noted the company’s debt profile would increase if it was not cautioned.
The committee demanded the oil firm to produce evidence of payment by Wednesday and report back or face sanction.
Meanwhile the committee cleared Continental Oil which hitherto owed the sum of $18million, having paid the sum in two tranches.
The decision to clear the company followed prove of payments presented by its legal adviser, Michael Madoghwe, to the effect that it has cleared all outstanding liabilities owed DPR.
Madoghwe had told the panel that the issue of payment of royalty and the settlement between parties was very important which led to the splitting of the debt into two.
He said while the first tranche of $8million was paid on May 31, the outstanding of $10million was paid on June 5, to which he presented receipts.ww





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